L’Oreal Group SWOT Analysis

SWOT Analysis L’Oreal Group
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Swot Analysis L’Oreal Group
Introduction
L’Oreal is a leading organization in the beauty and cosmetics world. The extensive portfolio of the company includes hair, skin, and makeup products. L’Oreal tends to be the only brand that is giving many inexpensive and luxurious beauty options. The organization is available in the whole world through different agents. The company has over 500 brands and over 2,000 items in the beauty sector. The products include hair colors, styling aids, ski, and body care, fragrances, and cleansers. It is evident that the group has been able to achieve that all the cosmetic companies are aiming at and also has discovered factors that lead to their success. In the 1980s, the company was able to achieve great distribution globally, which was not even in the sight of the managers (Shabanova, Ismagilova, & Salimov, 2015). At this point, the company was known as a France leading beauty organization; its international presence was limited because many had the belief that the Parsian beauty was expensive and high culture. Some of the decisions made within the organization are usually influenced by factors that are from outside the company, which are, at times, hard to resist. L'Oreal group is also subject to these aspects, as summarized in the SWOT analysis below.
External environment
Industry overview and analysis
Industry trend
Recently according to the research done, the consumers in the L'Oreal group have undergone a great transformation in the last three years. To keep up with the trend, the company has to respond to customer needs in not more than six months. The company is now getting to a fast fashion-type approach where more young individuals are paying attention to the images that their predecessors did. Also, the customers are now demanding transparency, where they expect that the brands will be able to tell where the products come from and the process of manufacturing. With the digital transformation, the company has to be agile and provide the required information to the customers.
Competitor’s discussion
The L'Oreal Group is facing great completion from the Procter and Gamble Company, which is a billion-dollar brand that deals with health and home. The company is competing with the L'Oreal group because it is profiled as the largest world maker for the consumer packaged goods, and its business is well divided into five global segments, which comprise of family, oral, baby care, hair and skin products. The company tends to sell the product in over 180 nations.
Five forces
The threat of new entrance
The L'Oreal group has a low threat to the new entrance. This is because there is a huge cost of entrance, and the development of unique cosmetic products needs a lot of resources in terms of growth and also research. The competition that exists in the industry is also another factor that discourages new entry.
Threats of substitutes
This arises whenever there are some items that are made by the competitors that satisfy the needs in the market. In the industry of cosmetics, there are many competitors, thus a high threat of having substitute items. If the c...