L'oreal Thailand Case Study

L’Oreal is top of the beauties and cosmetic company in the world include the Thailand which is the case study. Thailand have been characterized by excessive fixed assets investment, reckless borrowing, over ambitious local corporations and undisciplined financial institutions during the Asia crisis in 1997. L’Oreal Thailand consistently poor performance in the beauty industry such as low market share, sales and profitability. Chris Martin the managing director of L’Oreal Thailand was appointed in the year 2000 in order to increase profitability, sales and market share in the Thailand cosmetic and beauty industry. L’Oreal Thailand decided to make an innovation and change to survive via turnaround, marketing strategy, general management, global management, brand management, cross cultural management. In addition, understanding the environment issues and appropriate organisation design and development, right approaches to manage potential challenges are playing an important role in order to help the organisation to make a nice turnaround.

First of all, the external environment has the potential to affect all or part of the organisation. The environment of an organization can be understood by analyzing its domain within external sector.An organisation’s environment is including task environment and general environment. The elements of task environment are interacting with the organisation directly and also have a direct impact on the organisation. Task environment is contained by industry sector, raw materials, human resources, market and so on (Organisation theory,p.141). Besides that, the sectors of general environment might not have a direct impact on the daily operations but will affect the organisation indirectly such as the government sector, economic conditions, financial resources etc. Based on the L’Oreal Thailand case, there are many existing external environments issues which are strongly impacting the whole organisation’s performance in Thailand, so it is very important to pay attention to analysis environment in order to understanding the direction of the organisation and make a beautiful turnaround for L’Oreal Thailand. In the beauty industry in Thailand there are intensive competitors existing such as Lever and P&G and many local competitors (Better way, Skyline Unity) sharing the market. Furthermore the changing trend of retailers (from local retailers to hypermarkets) during 1998.Therefore, the type of industry sector is highly require more adaptive strategy for L’Oreal in order to gain competition advantages between the rivalry. Human resources sector is also an important environment issues for L’Oreal which is the shortage of employee within the company from the high turnover rate and the error of recruitment criteria. Moreover, the limited financial resources created a hard time for L’Oreal, limited budget in the advertisement and huge bank loan. L’Oreal Thailand was threatened by these task