With all the restructuration L'Oreal's CEO Owen Jones successfully achieved to reach from 3% to 15% on the nail market, they have also raise their sales in nearly a 100% and positioned Maybelline in over 70 countries.
Globalization has had a very positive impact over L'Oreal as due to this they had the need to reorganize their company making some sort of decisions like relocating their headquarter for the USA operations in Chicago so that they can have control of all the operations taking place in America in a central place where they can keep track of all their progress, this has also brought another issue related to globalization which is the technology, L'Oreal has invested 3% of their revenue in developing new products where the average of investment in this field in the industry is around 2%, technology has also brought new channels of communication where they can easily be in touch within the company and also they have been able to use cost-efficient distribution channels thanks to their acquisition of Soft sheen-Carson as they had developed cheap delivery systems.
2.5 L'OREAL EFFECTIVENESS
L'Oreal has been going through a massive change since their beginning as they started their business creating a synthetic hair-color product to be sold in France and probably around Europe, the response of the people to the product was so good that the company decided to enter the beauty market, diversifying their product catalogue not only to hair care but to skin care as well, with the result of being the market leader. However the effectiveness of the company is not very clear at this stage as the product by itself cant guarantee the success of the company, instead of that, a good strategic management along with a visionary CEO can bring a major strength to the organization and will build confidence within the company to achieve their goals as they stated at the beginning, well, this is the case we are analyzing, as previously stated, CEO Owen Jones had the vision to expand the boundaries of the company by acquiring strategic partners that can contribute to a massive growth for L'Oreal, his leadership enables him to see and opportunity of expansion taking advantage of the globalization boom and his vision of opportunities where the competitors didn't see anything was a key to succeed in some parts of the world, L'Oreal was bright enough to understand that the needs or likes of the people in America were not the same as the people in Asia or in Africa reason why they decided to create products for every single market and this gave them the opportunity to be the world leaders in the market. After all this facts it is clear that L'Oreal has had a very effective response to the new changing environment as they are prepared to adapt
to new situations and is a company willing to deal with organizational change, this is a enormous benefit for the company as they can easily gain competitive advantage at a low cost of opportunity.
2.6 IMPROVEMENT AREAS.
L'Oreal is the world leader company in the beauty industry thanks to their brilliant management and their products; however there is always a little extra that can be done to reach that additional little piece of the market. In my point of view I would suggest that the company hire an Asian Marketing Manager hopefully with a strong Japanese background in order to be able to completely take over this market as this market has a huge potential which was proved with the Wet Lipstick, perhaps if they invest some part of their revenue in research and development as the did with the African market, they might get a very good response as all the markets should be kept in mind as a big opportunity.
L'Oreal could also consider expanding to the Latin American market and specially the South American, now that they control the US market (North America), they can implement their expansion strategy to take over central and south America which is a market that haven't been explode yet or not as much as they could. L'Oreal could implement the same strategy implemented by Dell in Brazil, as they decided to relocate their plant in South America (Brazil) in order to manage all the market from there, taking advantage of the Mercosul market which enables the company to save on taxes within the continent.
And finally L'Oreal should consider to extent their products catalogue to clothing and accessories as this may give them a competitive advantage over the rest of the companies in the same industry, it is very important to try to be always one step ahead of the company and be visionary in order to predict what the market wants and how to supply that demand.
2.7 CONCLUSION.
After analyzing this case it is clear how important is to have a good strategic
management and understand how the environment can affect every organization from the most insignificant change to any huge change that may involve any of the decisions of the company, its understandable that the vision of the CEO of the company can bring
success to the organization and build a good know how that will enable the company to enter new markets.
2.8 REFERENCES.
[1] Westwood, John. How to Write a Marketing Plan (3rd Edition).London, GBR: Kogan Page, Limited, 2006. p 27.
[2] L'Oreal and the globalization of American beauty, Page 5. [3] L'Oreal and the globalization of American beauty, Page 15. [4] L'Oreal and the globalization of American beauty, Page 9. [5] L'Oreal and the globalization of American beauty, Page 2. [6] L'Oreal and the globalization of American beauty, Page 9.
[7] Emerald Insight Staff (CB). Change Strategies.Bradford, GBR: Emerald Group Publishing Limited, 2004. p 4.
[8] Samli, A. Coskun. In Search of an Equitable, Sustainable Globalization: The Bittersweet Dilemma.
Westport, CT, USA: Greenwood Publishing Group, Incorporated, 2002. p 21. [9] Samli, A. Coskun. In Search of an Equitable, Sustainable Globalization: The Bittersweet Dilemma.
Westport, CT, USA: Greenwood Publishing Group, Incorporated, 2002. p 34. [10] Emerald Insight Staff (CB). Mergers and Acquisitions. Bradford, , GBR: Emerald Group Publishing Limited, 2005. p 4. [11] Emerald Insight Staff (CB). Mergers and Acquisitions. Bradford, , GBR: Emerald Group Publishing Limited, 2005. p 5.
