Prepare L’Oréal’s SWOT Analysis Assignment Paper (Essay Sample)
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L’Oréal’s SWOT Analysis
L’Oréal’s SWOT Analysis
From the look of things, it takes a lot of effort to keep people looking and smelling good. For the past two decades, the cosmetics industry has undergone tremendous changes that have seen companies changing their strategies to remain competitive in the market. There has been changes in the packaging, marketing and even employment in the industry. Traditionally, these trends were driven by celebrities through the choices or professional endorsements. The days of celebrities endorsing products are long gone, currently most people believe that social media is the major cause of these trends. The social media keeps a constant flow of information not only from celebrities but also opinions from friends, friends’ friends and the entire world.
However, although the trends are set, the cosmetic industry is large, willing and ready to accommodate them. The companies are doing their best to differentiate themselves from their competitors through their market niche, prices, packaging, and even through the manufacturing processes. All companies are competing to produce promising products that are natural to attract and maintain customer loyalty. From financial forecast perspective, there has been mergers and this is affecting the whole industry. Several companies have joined forces due to other market trends and to avoid being forced out of the market. The slower growth rate in the Latin American market is another trend that has an impact in the cosmetic industry due to economic recession. This is likely to affect consumer spending on the products. The desire for the aging population to remain looking younger is another trend that is affecting all companies. The industries are driven into producing products that will make the skin and hair remain young to keep up with this shift (Pitman, 2015).
Being the second largest company in the cosmetic industry, L’Oréal is subject to all of these trends. This will affect its growth rate, profit margins, competitive advantage and other aspects in the industry. It has to operate with care and integrate all the dynamic changes for it to remain competitive in the market.
L’Oréal Group is the second largest beauty and cosmetic company in the world. Its headquarter offices are located in Clichy, Paris, France. The company manufactures and markets perfume and fragrances, haircare, styling, skin care and make up products. It is also involved in the dermatology, tissue engineering and pharmaceutical fields. It has established its operational in more than 130 countries across the world. Additionally, it has between 30-40 brands with a wide distribution across the globe. Having a combination of consumer products, some of them are found everywhere while others are L’Oréal Luxe category that are found in specific stores with a premium theme.
The company is devoted to achieving three major strategic changes: the broadening of the consumer base with the target of winning a billion new consumers and a thorough transformation of the company to make it stronger and more flexible. The final one is a determined increase of investments R&D and advertising & promotion to accelerate growth. From this objectives, the company had its financial objective of increasing its profit margins. More consumers means more purchases increasing its profit margins (Pitman, 2010).
* Largest cosmetic company.
It is no doubt, L’Oréal is the largest cosmetic and beauty company in the world. As other companies concentrate in one line of products, L’Oréal focuses on a wide ra...
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