Loreal Management

LÓreal

1. Introduction

L’Oréal is a world renowned cosmetics brand originated from France and was founded by Eugene Schueller in 1909, a young French chemist of German descent. LÓreal has their own central command in Clichy, Hauts-de-seine. It is the world's biggest nonessential organization, having some expertise in hair, hair coloring, skin health management and cosmetics.. L’Oréal first started out in the hair coloring business but soon branched out into other expenditures such as cleansing and beauty products. Due to its immense popularity growth over the years, it now markets over more than 500 brands and many individual products in the beauty industry. Their products can be found in the shelves of households, beauty salons, supermarkets and drugstores.

L’Oréal currently has six worldwide research and development centers; two in France, one in US, one in japan, one in shanghai and one in India. Their next upcoming building development center will be in the US, Berkeley heights, New Jersey. Besides the fact that its popularity is due to it being in the market for so long, they are also against testing their products on animals and are animal cruelty free.

2. General Environment Analysis (PESTEL Analysis)

2.1.1 Political

 Due to its popularity, its products are in many different companies around the world and L’Oréal has to conform to the standards of the many different countries politically (e.g.: Food and drug administration). Norms must be met likewise to the distinctive government administration styles in the nations that they work in. Some countries may not be as open minded as others and may be sensitive to the ingredients that L’Oréal might use in their products. Certain chemicals that are put into their products might not be permitted and may be banned in certain countries. L’Oréal is obligated to produce safe products that do not contain harmful substances. They also have to be mindful in the way they advertise their products to consumers so as not to mislead them with what their product is capable of doing. (airline, 2014)

2.1.2 Economic

 Even though L’Oréal has an approach to customize each brand (the body shop, nestle, etc.) to certain regional and country demands, they still have a global approach of conquering the cosmetic industry globally that could put their business at risk. Nestle claims the biggest rate offer of L’Oréal. Will this influence L’Oréal in 2014 when Nestle has their alternatives to work out? Nestle states that L’Oréal does not fit into their branding of food and beverage. Still, this could represent a threat to the financial matters of what economic assets L’Oréal has. (clichey, 2014) If a nation’s financial matters changes for the worse, what does this do to LÓreal's consumers? This implies that people have less cash to spend, which implies less business for L’Oréal.