Pest Analysis of Loeral

CURRENT SITUATIONAL ANALYSIS

PEST ANALYSIS OF L'OREAL'S MACRO ENVIRONMENT

PEST analysis for L'Oreal's macro environment within which it operates:

Politically, there is a necessity to adhere to the respective government policies in the global regions of activity. These include among others:

 Environment law (regarding pollution and reduction of carbon foot print of multinational organisations)

 Foreign trade regulations and taxation policies (can imply high cost of market entry to boost indigenous investments.)

 The level of stability.

 Employment laws( issues such as minimum wage regulations, trade union activities, health and safety procedures)

 The relationship with governments.

Socially, important factors include:

 Demographic composition in terms of age, sex , disposable income distribution trends.

 Social mobility.

 Consumption trends( for example Americans have higher levels of consumption as opposed to saving, yet in Japan, the reverse is true.)

 Education levels and equal opportunities.

INTERNATIONAL MARKETING AT L'OREAL

MAP ILLUSTRATING L'OREAL'S PRESENCE IN GLOBAL MARKETS:

North America Western Europe

Latin America

Eastern Europe Asian Pacific

Africa and the Middle East

These are new markets penetrated by L'Oreal.

Source of the map used: http://worldpress.org/map.cfm

Jones (2010) classifies L'Oreal's international strategy is based on the theory of foot hold. This is based on creating and safeguarding a reinforced established presence, the ability to perform business activities proactively, real time systems so as to be well aided to react in situations of threat to investment and being able to measure risk as essential for an organisation of L'Oreal's calibre. It also relates to the strategic direction