Name: Monisha saha

Roll no: 39/19

Registration no:161517
2022 23
Subject: Strategic
management, Corporate
Planning, Business planning.
Vision, Objectives, SWOT Analysis,
Competitive Position, and Future
Goals of L'Oréal
1. Introduction

L'Oréal, an illustrious beauty company with a captivating history of over

a century, has made a name for itself in the global beauty industry by
offering a wide range of top-notch products, including skincare and
cosmetics. In this paper, we delve into L’Oréal's vision and objectives,
explore its strengths, weaknesses, opportunities, and threats through
SWOT analysis, assess its competitive position using Michael Porter's
Five Forces, examine its organizational life cycle, and conduct a BCG
Matrix assessment to understand the company's product portfolio.
Furthermore, we outline L'Oréal's future goals to provide a
comprehensive overview of the company's plans for growth and
development.

2. Vision and Objectives

Vision: L’Oréal, a leading brand in the beauty industry, has a vision that
revolves around providing exceptional beauty products and services to
all individuals across the globe. The brand's mission is to innovate and
create beauty products that cater to the diverse needs and preferences of
consumers worldwide. L'Oréal's focus on innovation is evident in the
development of cutting-edge products and technologies that help people
look and feel their best. The brand's commitment to quality, safety, and
sustainability has earned it a reputation as a trustworthy and responsible
company. L'Oréal's passion for beauty for all is what drives its success
and growth in the industry.
Objectives:

Certainly, here's a more descriptive version of the text:

• Innovation: At our company, we are committed to continuously

innovating and creating groundbreaking beauty products that not
only meet but also exceed consumer preferences. We constantly
push boundaries and explore new horizons to stay ahead of the
curve in the ever-changing beauty industry.

• Customer-Centric Approach: Our ultimate goal is to ensure

customer satisfaction by delivering high-quality, effective, and safe
beauty solutions. We put our customers at the heart of everything
we do, and our team works tirelessly to create products that meet
their unique needs and preferences.

• Global Expansion: As we continue to grow and expand, we are

committed to expanding our presence in key markets across the
globe. We understand the importance of respecting local cultures
and preferences, and we strive to develop products that cater to the
specific needs of each market we operate in.

• Sustainability: We believe that it's our responsibility to integrate

sustainability into all aspects of our operations. We take a holistic
approach to sustainability, from product development to
manufacturing and distribution, to ensure that we are doing our
part to reduce our environmental impact.
 • Talent Development: We believe that our employees are our
greatest asset, and we are committed to fostering a diverse and
inclusive work environment that attracts and retains top talent. Our
team is comprised of individuals from all walks of life, and we
encourage creativity and entrepreneurship to help each employee
reach their full potential.

3. SWOT Analysis

Strengths:

- L'Oréal is a leading beauty and personal care company with a strong

brand portfolio consisting of iconic brands such as L'Oréal Paris,
Maybelline, Lancôme, and others. The company's brands are well-
known globally and have a loyal customer base.

- The company invests heavily in research and development, which

drives continuous innovation and new product development. L'Oréal has
a team of over 4,000 scientists working in 23 research centres worldwide
to develop new products and technologies.

- L'Oréal has a global presence with operations in over 150 countries.

The company has a strong presence in both developed and emerging
markets, which provides it with a diversified revenue stream.

- L'Oréal has a strong distribution network, including both traditional

retail channels and e-commerce platforms. The company has
partnerships with major retailers and online marketplaces to reach
customers worldwide.
- L'Oréal is committed to sustainability and corporate social
responsibility initiatives. The company has set ambitious sustainability
targets and has implemented sustainable practices across its operations.

Weaknesses:

- L'Oréal depends on a few key markets for a significant portion of its

revenue. The company generates a significant portion of its revenue
from developed markets such as Europe and North America, which
makes it vulnerable to economic downturns in these regions.

- L'Oréal is vulnerable to economic downturns that could impact

consumer spending on non-essential goods. The company's products are
considered non-essential, which means that consumers may cut back on
spending during tough economic times.

- L'Oréal has had limited success in penetrating certain emerging

markets compared to its competitors. The company faces strong
competition from local and international players in markets such as
China and India.

- L'Oréal faces challenges in maintaining brand consistency and

differentiation across diverse product lines. The company's brands cater
to a wide range of customers with different needs, which makes it
challenging to maintain a consistent brand image.
Opportunities:

- There is a growing demand for personalized beauty solutions tailored

to individual preferences. L'Oréal can leverage its research and
development capabilities to develop personalized products and services
to meet this demand.

- L'Oréal has expansion opportunities in emerging markets with rising

disposable incomes and beauty consciousness. The company can focus
on expanding its presence in these markets to drive growth.

- The increasing adoption of digital technologies presents opportunities

for marketing, sales, and consumer engagement. L'Oréal can leverage
digital technologies to reach more customers and provide a better
customer experience.

- The company has the potential for acquisitions or strategic partnerships

to diversify product offerings and reach new customer segments. L'Oréal
can acquire or partner with companies that have complementary
products or services to expand its product portfolio.

- There is rising interest in clean and sustainable beauty products,

aligning with L'Oréal's commitment to sustainability. The company can
focus on developing and marketing sustainable products to meet this
demand.
Threats:

- L'Oréal faces intense competition from both established beauty

conglomerates and niche players. The company's competitors include
major players such as Estée Lauder and Unilever, as well as niche
players that cater to specific customer segments.

- Rapid technological advancements disrupt traditional beauty industry

dynamics. New technologies such as artificial intelligence and
augmented reality are changing the way customers interact with beauty
products and services.

- Regulatory challenges related to product safety, testing, and ingredient

restrictions could affect the company's operations. The beauty industry is
heavily regulated, and changes in regulations could impact L'Oréal's
ability to sell its products in certain markets.

- Counterfeit products and brand infringement could affect L'Oréal's

brand reputation and revenue. The company's strong brand portfolio
makes it a target for counterfeiters and infringers.

- Shifting consumer preferences towards natural and organic beauty

products could challenge traditional market leaders. Customers are
increasingly concerned about the environmental impact of beauty
products and are shifting towards natural and organic products, which
could challenge L'Oréal's traditional product offerings.
4. Competitive Position Analysis using Porter's Five Forces

Threat of New Entrants: Low to Moderate. The beauty industry poses

high capital requirements which act as a significant barrier to entry for
new players. However, new players can find niches in the market that
can be relatively accessible, particularly those that cater to specific
segments of the industry. The entry of new players in the market may
pose a moderate threat due to the relative ease of entering niche
segments.

Bargaining Power of Suppliers: Low to Moderate. L'Oréal's scale and

brand reputation provide leverage in negotiations with suppliers.
However, the reliance on certain raw materials and ingredient suppliers
could impact costs and availability. The bargaining power of suppliers is
moderate to low as L'Oréal's scale and brand reputation give them a
considerable advantage in negotiations. However, the company may face
some challenges in ensuring the availability and affordability of certain
raw materials and ingredients.

Bargaining Power of Buyers: High. Consumers have access to

abundant beauty products and information, which drives price sensitivity
and demand for value. Loyalty programs and brand engagement
initiatives are crucial for retaining customers. The bargaining power of
buyers is high due to the availability of abundant beauty products and
information, which drives price sensitivity and demand for value. Brands
need to engage with their customers through loyalty programs and other
initiatives to retain them.

Threat of Substitutes: Moderate to High. Substitutes include alternative

beauty brands, natural remedies, and DIY beauty solutions. Rapidly
evolving consumer preferences and trends contribute to the availability
of substitutes. The threat of substitutes is moderate to high as consumers
have access to a wide range of substitute products, including alternative
beauty brands, natural remedies, and DIY beauty solutions. The beauty
industry is continuously evolving, and consumer preferences and trends
can change rapidly, contributing to the availability of substitutes.

Competitive Rivalry: High. The beauty industry faces intense

competition from global beauty conglomerates such as Estée Lauder,
LVMH, and Procter & Gamble, as well as smaller niche players.
Continuous innovation and differentiation are essential for maintaining
market share and relevance. The competitive rivalry in the beauty
industry is high, with numerous global beauty conglomerates and niche
players vying for market share. Brands need to focus on continuous
innovation and differentiation to maintain their market share and
relevance.
5. Organizational Life Cycle Analysis

L'Oréal, a French cosmetics and beauty company, has reached the

maturity stage in its organizational life cycle. L'Oréal boasts an
impressive range of brands, including Lancôme, Maybelline, and
Garnier, among others. With a global presence in over 150 countries, the
company has established a significant market position, generating annual
revenues in the billions.

As L'Oréal has moved beyond the growth phase, it has focused on

maintaining its competitive advantage. Despite facing challenges such as
market saturation and evolving consumer preferences, L'Oréal has
remained committed to innovation and adaptation. The company has
invested heavily in R&D to create new products and technologies that
meet the ever-changing needs of its customers. For example, L'Oréal has
recently developed a personalized skincare service that uses artificial
intelligence to analyze skin and provide tailored recommendations.

In addition to innovation, L'Oréal has also placed a strong emphasis on

sustainability, ethical practices, and social responsibility. The company
has set ambitious goals to reduce its carbon footprint, eliminate animal
testing, and promote diversity and inclusion.

Through its continuous efforts to innovate and adapt, L'Oréal has

maintained its leadership position in the highly competitive beauty
industry. The company's unwavering commitment to its customers,
employees, and the environment has made it a trusted and respected
brand worldwide.
6. BCG Matrix Assessment

Stars: These are the high-growth brands that have already established
themselves in the market and are considered market leaders. Companies
such as L'Oréal Paris and Lancôme command significant market share
and attract substantial investment to continue expanding and innovating.
These brands are typically characterized by a high market growth rate,
high market share, and high profitability. They have a strong competitive
advantage and are considered to be the cash-generating engines of the
business.

Question Marks: These are the emerging brands or product lines that
have shown high potential for growth, but their market share is still
uncertain. They require strategic investment and marketing to solidify
their position in the market. Companies must decide whether to invest in
these brands, divest them, or harvest them for cash. These brands
generally have a low market share but operate in a high-growth market,
indicating that they have the potential to become Stars.

Cash Cows: These are the established brands with high market share in
mature markets. They have a low market growth rate but generate
consistent revenue and cash flow, which in turn helps to support growth
initiatives for other brands. Cash cows are typically characterized by a
high market share, high profitability, and low market growth rate. These
brands have a strong competitive advantage, and their cash flow is used
to fund other business initiatives.
Dogs: These are the products or brands with low growth potential and
market share, and they require strategic decisions to divest or reposition
in the market. Companies must decide whether to invest in these brands,
divest them, or harvest them for cash. These brands are typically
characterized by a low market share, low growth rate, and low
profitability. They have a weak competitive position in the market, and
their cash flow is often used to fund other business initiatives.

7. Future Goals

• Investing in Research and Development: The company should

invest in research and development to drive innovation and product
differentiation. By allocating resources towards R&D, the
company can optimize its existing products and develop new
products or services that can help it stay ahead of the competition.
This can also help the company in identifying new market trends,
customer needs, and preferences.

• Expanding Presence in Emerging Markets: To expand its reach,

the company should focus on emerging markets, particularly in
Asia and Latin America. The company can leverage localized
marketing and distribution strategies to target these markets. This
can help the company in building brand awareness and establishing
a strong presence in these regions. By offering products that cater
to the local needs and preferences, the company can gain a
competitive edge.
• Enhancing Digital Capabilities: To improve consumer
engagement, personalized marketing, and e-commerce growth, the
company should enhance its digital capabilities. This can involve
leveraging data analytics to gain insights into customer behaviour
and preferences, developing user-friendly mobile apps and
websites, and implementing effective social media marketing
strategies. By investing in digital technologies, the company can
create a seamless customer experience across all touchpoints.

• Strengthening Commitment to Sustainability: To promote

sustainable business practices, the company should focus on
reducing its environmental impact throughout the value chain. This
can involve implementing eco-friendly manufacturing processes,
adopting renewable energy sources, and reducing waste.
Additionally, the company should also focus on promoting ethical
sourcing and manufacturing practices to ensure that its suppliers
are also following sustainable practices.

• Fostering a Culture of Diversity, Inclusivity, and

Empowerment: To nurture talent and encourage creativity and
innovation, the company should foster a culture of diversity,
inclusivity, and empowerment within the organization. This can
involve creating a safe and welcoming workplace environment that
values diversity and promotes equal opportunities. By fostering a
culture of inclusivity, the company can attract and retain top talent
from diverse backgrounds, which can lead to a more innovative
and creative workforce.
8. Conclusion

L'Oréal, a globally recognized brand, has a vision of making beauty

accessible to everyone. To achieve this goal, L'Oréal is dedicated to
innovation, ensuring customer satisfaction, expanding its reach
worldwide, promoting sustainability, and developing a talented
workforce.

L'Oréal's research and development department is the driving force

behind its innovation, continually exploring new concepts and creating
top-quality beauty products that cater to the evolving needs of its
customers. Customer satisfaction is a top priority for L'Oréal, which has
earned the brand a loyal customer base that values its products.

L'Oréal's global expansion has allowed the brand to reach new markets
and provide beauty products to a more extensive and diverse customer
base. In doing so, L'Oréal has been committed to sustainability, ensuring
that its products and practices are environmentally responsible.

L'Oréal's success can also be attributed to its investment in talent

development, which has enabled the brand to retain and attract top
talent, providing them with a competitive edge in the industry.

By leveraging its strengths, addressing weaknesses, capitalizing on

opportunities, and mitigating threats, L'Oréal is poised for continued
success and leadership in the dynamic beauty industry. With a clear
strategic roadmap and unwavering commitment to its vision and
objectives, L'Oréal is well-equipped to navigate through challenges and
shape the future of beauty.
9. References :
•

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