ppt
TRANSCRIPT
Pauline BlaisInes Ben RehoumaAriane EdjetmaiNicholas KuggeHussein JaffalFanny Braut
Presentation & Analysis of L’Oréal
L’Oréal Corporation1. Mission2. Brief History3. Facts & Figures
Strategic Issue
Mission
“L’Oreal’s mission is to make innovative products that enhance the beauty and well-being of men and
women around the world. Their fundamental mission is to provide superior beauty and personal care products for their employees, consumers, salon
professionals and retail partners”
Brief History
Created in 1907 by Eugène Schueller
First synthetic hair dyes: Auréole
Société Francaise des Teintures Inoffensives pour Cheveux
Diversification&Expansion
Facts and Figures
A century of expertise in cosmetics
€20.3billion consolidated sales in 2011
27 global brands*
130 countries
68 900 employees
613 patents filed in 2011
Strategic Issues L’Oréal stagnation of its market shares in developed
countries
Negative growth in Eastern Europe: -2.8%
Outstanding growth in emerging economies Latin American markets: 13.2% Asian markets: 13%
Difficulty to attract new customers in Europe and North America
Strategic Issues
L’Oréal’s products in their mature stage of life cycle in old markets
In contrast, cosmetics is a growing industry in emerging economies
L’Oréal needs to focus on new markets
Brazil and importance of beauty rituals
Solution Part 1 : Focusing on Brazil
Analysis of the BRIC 1. Economic aspects2. Social aspects3. Political aspects4. Why Brazil ?
Expansion Methods1. Mergers and acquisitions2. Joint Venture
Economic Aspects Brazil
• 6th world largest economy (+24%)• Average purchase power 11800$ / year • Average of 240$/ year spend on beauty products
India• 10th world largest economy (+25%) • Average purchase power 3650$/year
Russia• 9th world largest economy (+25%)• Average purchase power 21250$/year
China• 2nd world largest economy (+22%)• Average purchase power 8450$/ year
Economic Aspects (cont.)COUNTRIES COSMECTICS MARKET GROWTH
Brazil 15%
Russia 11%
India 17,5%
China 18,7%
Social Aspects
Beauty standards with globalization
Cosmetics Luxury & social code
Middle class in BRICS : • discovery of a new purchasing power• tend to show off the social class • High demand
French cosmetic products: French Touch
Political Aspects
China positive regulatory environment fueled Cosmetic Industry growth
Brazil Cosmectic Industry self-regulated
India Difficulties to enter, but Government less reluctant to new foreign actors
Why Brazil ?• More developed & Industrialized for cosmetic
products
• Increasing purchasing power
• Rising fashion consciousness
• L’Oréal well appreciated Use of geocosmetics
Mergers & Acquisitions
Pros• Quick to execute ( Brazil 119 days, by The World
Bank)• Ideal to preempt their competitors • Less risky than building a business from scratch • Increases market shares/ builds an important
presence in the market• Synergy of resources• Acquisitions of profitable and known source of
revenue from properties
Mergers & Acquisitions (Cont)
Cons• Overpayment of assets• Clash between cultures/ management conflict• Fail attempts to realize synergies• Inappropriate operations and management due to
geographical differences • Failure to adapt product to the local market
Joint Venture
Pros• Opportunities to gain or learn new expertise or
capacity skills• Enable companies to enter into related business
activities• Sharing costs or risks with local partners• Politically acceptable (Leite. G & Rodriguez. A.T, 2009)
Joint Venture (cont.)
Cons• Lack of control over technology• Inability to engage in global strategic coordination• Internal conflict for control • May give away important know-how to partner• Image easily at risk in case of a partners error
Solution part 2 : Sustainable Development
Sustainable Development in the Luxury industry
L’Oréal, a sustainable company?
The Brazilian Model
Sustainable Development in the Luxury industry
A new trend: linking Money and Sustainability
A rising Social and Environment awareness
A Win/Win game
L’Oréal a sustainable company?
Sustainability a roadmap for the future
Sustainability in action• Innovation => Green chemistry• Products => Eco-design• Process => Sustainable plants
The animal testing controversy
The Brazilian Model
A showcase of L’Oréal’s environmental and ethical progress
Eco-responsible plants and workers
Diversity part of the dynamic management
Commitment to social inequalities