L’Oreal Case Study Example

Headquartered in Clichy, L’Oreal is the largest cosmetics company and works on personal care activities in perfume, sun protection, hair care, make-up, and hair color. Schueller formulated his products, and made a hair dye, naming it Oreale. In 1919, he registered his own company.

The working principle of the company was innovation and research in the field of personal care. In 1920 the company hired three chemists. L’Oreal started with hair colors. Then it switched on to skin cleansing and beauty products. L’Oreal collaborates with 500 brands, and exports products to all sectors of beauty care.

It has six global R&D centres, two in Chevilly and Aulnay. It has one R&D center in Kanagawa Prefecture, Kawasaki in Japan. In China, it has an R&D center in Shanghai and another in India.

The company products are found in a wide assortment of channels including beauty salons, perfumeries, pharmacies, hypermarkets, store outlets to supermarkets.

L’Oreal’s Mission

L’Oreal enables its staff to express their opinions, boost self-esteem, and open up to people.

L’Oreal’s Vision

• To win the trust of more than a billion customers around the globe.
• Develop products that meet the diversity of consumers’ desires and skincare requirements.

L’Oreal’s competitive analysis

Diversity in the working environment

The company believes in diversity. It works with 34 global brands and has over 89300 employees from 158 countries. It allows the company to run its business across 150+ nations.

Strong portfolio of brands

L’Oreal has an extensive portfolio of brands manufacturing consumer goods. It includes Maybelline, Nicely, Garnier, Dark & Lovely, L’Oreal Paris, Kiehl’s, Ralph Lauren, & MG.L’Oréal, Giorgio Armani, it cosmetics, Yves, and Lancôme.

It includes professional beauty care products from L’Oreal Professional, Kerastase, Pureology, Redken, Decleor, and Matrix. Brands are producing active cosmetic products including Skin Ceuticals, La-Roche-Posay, and Gallet & Roger.

L’Oreal ‘s Brand Equity

Forbes recently produced a list of top multinational companies, where L’Oreal ranked 133rd. The company comes 379th in Fortune 500 companies. The company has been on the Fortune 500 list for the last 23 years.

HRM Strategy of L’Oreal

HR management’s mission of L’Oreal is to attract and retain employees to accomplish the long-term objectives of the company.

Facts of L’Oreal

• Frederic Rodge -CEO and President of L’Oreal
• Each strategic committee of L’Oreal has 13 members.
• L’Oreal has 50,500 employees across 130 countries.
• 42 manufacturing units of L’Oreal have more than 14,000 employees.

HRM Policies of L’Oreal 

• Serve the customers based on their needs and demands
• Emerge as the global leader dealing with consumer goods with product innovation.
• Provide world-class cosmetics to men and women across the world

As per the market capitalization procedure, L’Oreal has an estimated worth of 107.5 billion dollars. Innovation in the realm of beauty care, and cosmetics brought several accolades to the company. Over the year, it earned Pan European awards. Ethisphere awarded it for being the most ethical company.

L’Oreal ‘s Market analysis 

The target market of L’Oreal got segmented into categories based on the range of products and/or services offered by the company. Demand for L’Oreal’s products increased by 12% in the Asia-Pacific region. Furthermore, the company strengthened its beauty and skincare products through R&D and product-line extension strategy.

L’Oreal ‘s Competitor analysis

The company follows a plethora of strategies like training, and upskilling its in-house team, partnering with start-up enterprises like Partech Ventures, Station F, and Founders factory. Likewise, it is launching marketing campaigns to improve its brand image and online visibility.

With increasing urbanizations, and an interest in being universally accepted, clients are aspiring to use superior quality products. as such, L’Oreal faces neck-to-neck competition from brands like Lakme, Revlon, Unilever, and Proctor & Gamble.

L’Oreal‘s BCG Matrix 

The company functions in four distinctive business units including Active Cosmetics, Consumer goods, Professional Products, and L’Oreal Luxe.

Professional Products generated revenue of 4007 million dollars and experienced a 1.4% negative growth rate. Consumer goods and L’Oreal Luxe earned revenue of 14494m and 10132m dollars respectively.

active cosmetics earned revenue of 2870 m dollars and a growth rate of 11.9%.

Considering the fact, professional products have a question mark in the matrix, whereas others are a star in BCG Matrix.

Customer analysis of L’Oreal

With its vast product portfolio, L’Oreal aims to serve businesses, retail and individual customers. In business segments, L’Oreal has customers from Spas, salons and beauty parlors, recreational centers that serve customers with mainframe products manufactured, and sold by L’Oreal.

The skincare enterprise targets upper-middle and upper-class individuals, young college-goers, and people aging between20 to 45. They aim at serving people who were happy with the quality of products and have found no harmful side effects.

L’Oreal’s Distribution Strategy

L’Oreal has been distributing products through distributors, retailers, online websites, and Pop & Mom outlets. There is no doubt that e-commerce websites assume a significant role in distribution strategy. L’Oreal witnessed a growth of 34% within a year. It also distributes products through travel & retail outlets like duty-free airline stores and experienced a 19% growth rate in 2017.

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