A

Project report

On

L’OREAL INDIA

Submitted to:

Prof. Rajiv Joshi

St. Kabir Institute of Professional Studies

Submitted by:

Khushbu Patel

Roll no. 31

Term - 3

Index

No. Particulars Page No.

1 Introduction

General Overview Of The Company 1

History 3

L’Oreal In India 5

Brands Of The Company 7

Ethics 8

2 Production

Production Development Process 9

Research and Development 12

Operations 13

3 Finance 14

4 Human Resource 15

5 Material Management 16

6 Social Responsibility 18

7 Awards And Recognitions 19

8 PEST Analysis 20

9 SWOT Analysis 23

10 Future plans 25

11 Sources Of Information 26

1. Introduction

General Over View of the Company:

For the past century, L’Oreal has pursued its adventure in the beauty industry to cement its position as the world’s leading Cosmetics Company. Above and beyond its financial success, however, L’Oreal’s track record reflects an endless quest:

A quest for innovation, begun a century ago by scientist and inventor Eugene Schuler, driven by tireless research and buoyed by a steadfast pioneering spirit;

A quest for excellence through increasingly safe, imaginative and effective products;

A quest for diversity and a range of cultures to meet the needs of men and women around the globe and make beauty products available to as many people as possible;

A quest for purpose, a cornerstone of the L’Oreal approach, combining economic growth, ethics, social and environmental responsibility;

A quest filled with passion, transcending borders in a bid to make the world more beautiful.

At L’Oreal, they have made cosmetics the focus of all our energy and know-how for nearly a century. We are fully committed to putting all our expertise and research resources to work for the well-being of men and women, in all their diversity, around the world.

L’Oreal India Pvt. Ltd. engages in the distribution of L'Oreal SA cosmetics products for men and women. The company was founded in 1991 and is based in Mumbai, India. L’Oreal India Pvt. Ltd. operates as a subsidiary of L'Oreal SA.

Mission:

At L’ORÉAL, they believe that everyone aspires to beauty. Our mission is to help men and women around the world realize that aspiration, and express their individual personalities to the full. This is what gives meaning and value to our business, and to the working lives of our employees.

Vision:

Striving For Excellence :

Perfection is our goal. We are determined to continue enhancing our brand portfolio with innovative products and to meet the most demanding standards of quality and product safety at all times.

A Passion For Adventure:

Our expertise drives our passion for new discoveries and innovation in cosmetics. Each new achievement - each step forward - is in itself a new beginning.

Enrichment Through Diversity:

Understanding and valuing each individual is an essential part of our corporate culture. Our staff members come from many different backgrounds and work together to offer a full range of products through varied distribution channels. Our goal is to serve the beauty and well-being of our consumers in all cultures throughout the world.

Valuing Individual Talent:

Just as we are dedicated to enhancing the well-being of our consumers, we also make it a priority to ensure that each employee has the opportunity to develop his or her potential through personal and professional growth.

Leading Innovation In Beauty

Research is as much a part of our business as marketing, sensitivity to consumer needs is as important as scientific rigor, and know-how and expertise are as essential as intuition. Building on our unrivalled experience and expertise, fundamental research is a specific focus of investment that drives creativity and contributes to developing the cosmetics of tomorrow.

History:

From 1909 to 1956

First step: the model takes shape.

In 1909, young chemist and natural entrepreneur Eugene Schuler sets up the company that will later become L’Oreal.

Everything begins with one of the first hair dyes, which he designs, produces and sells to hairdressers in Paris.

The move forges the first link in the chain that is to become L’Oreal “DNA”: using research and innovation to enhance beauty.

From 1957 to 1983

L’Oreal on the road to greatness

These are the formative years of “Le Grand L’Oreal”.

At the instigation of Chairman François Dalle, the Group starts to expand internationally.

Acquisitions of strategic brands mark the beginning of a period of spectacular growth for the company. Emblematic products come into being.

The company motto is “Savoir saisir ce qui commence” (seize new opportunities).

From 1984 to 2000

Becoming number one in the beauty industry

These twelve years are marked by a great period of growth for L’Oreal, mainly driven by the significant investments made by the group in the field of research.

Alongside these efforts are strategic product launches that not only make history, but also succeed in strengthening the Group’s brand image.

In 1988, François Dale’s successor, the research and development pioneer Charles Zviak, hands over the reins of the company to Lindsay Owen-Jones, a truly outstanding director.

Under his management, the Group would completely change in scope to become the world leader in cosmetics through the worldwide presence of its brands and strategic acquisitions.

From 2001 to present day

The diversity of beauty throughout the world

There is no single type of beauty; it is a multiple-faceted quality framed by different ethnic origins, aspirations, and expectations that reflect the world’s intrinsic diversity.

With a portfolio of powerful, international brands, L’Oreal enters the 21st century by embracing diversity in its global growth agenda.

Headed since 2006 by Chairman Lindsay Owen-Jones, and Chief Executive Officer Jean-Paul Agony, the Group continues to make new acquisitions to cover the world’s varied cosmetic needs, and to undertake new socially responsible initiatives in the interests of sustainable development for all.

L’Oreal in India:

The company began doing business in India in the early nineties through a distributor and later established L’Oreal India, a wholly owned subsidiary of the L’Oreal Group. L’Oreal - the second ranked international cosmetics company in India - claims that revenues in the country increased five-fold over the past five years.

The new factory in Pune is the latest step in the group's rapid development in the subcontinent. The high-tech plant is to manufacture hair care, hair colour and skin care products to meet rapid increases in demand. The Pune site is one of the first within the company to implement L’Oreal’s newest GHP or Good Hygiene Practices.

"These new requirements have a profound impact on the way buildings are designed, the way production units are organized and on the installation layout. GHP zones are protected by airlocks to allow for a controlled atmosphere, and processing vessels are isolated in dedicated areas physically separated from the rest of the facility," said a spokesperson for L’Oreal.

L’Oreal operates three divisions in India, including,

The Consumer Products Division - L'Oréal Paris,, Maybelline New York and Garnier

The Professional Products Division, which manages the salon business, and

The Active Cosmetics Division with the Vichy brand of dermo-cosmetics.

When L'Oreal's Professional Products Division entered India in 1997, there wasn't a sniff of structure in the hairdressing industry. Organised education was absent, training considered redundant and hairdressers content with dubious domestic brands and prohibitively expensive foreign ones.

L'Oreal had the vision to realise all that would change and invested heavily in hairdressing education and training. Today, the hair care industry is pegged at Rs 200 crore (Rs 2 billion), growing in double digits, and L'Oreal Professional Products -- Professionnel and Kerastase -- are market leaders.

L'Oreal Professional Products prides itself on a product they believe is technologically unmatched. "3.5 per cent of our sales are pumped back into research & development. "They skim the top 100 cities in India and have the largest salon base in the country, of which 20 per cent is exclusive to them, contributing to 40 per cent of their revenue." SA "Their biggest cost is the education of their trade. They have over 40 trainers; it's an entire machine that needs constant oiling."

But competitors are eating into the same strategy. Both Schwarzkopf, at the number two

position in the industry, and Wella have launched technical training centers.

Schwarzkopf even launched a by-invitation-only hairdressers club and flew 150

members to Goa for an inaugural meeting.

L’Oreal India at glance:

L’Oreal, world leader in cosmetics, has a modern and efficient growth model that is always looking to the future.

100 years of expertise in cosmetics

5 key areas of expertise: hair care, hair color, skincare, make-up & fragrances

23 global brands

Products distributed in 130 countries

€17,5 billion consolidated sales in 2008

€581 million in R&D investments

628 patents filed in 2008

67,662 employees worldwide

4.6 billion Units manufactured in 2008.

Brands of the Company:

1. Consumer products

High technology products at competitive prices distributed through mass-market

retailing channels.

L’Oreal Paris

Maybelline

Garnier

2. Professional products

Portfolio of brands that meet the requirements of hair salons and provide customers

with a wide range of innovative products.

L’Oreal professional Kerastase Matrix

3. Luxury products

Prestigious brands which offer customers products and premium service in

department stores, specialty stores and travel retail outlets.

Lancome

Ralph lauren

Biotherm

Giorgo Armani

Diesel

4. Active cosmetics

Dermo-cosmetic products sold in pharmacies and specialist retailers and

supported by advice from pharmacists and dermatologists.

Vichy

La roche posay

Ethics:

At L’ORÉAL, we believe that everyone aspires to beauty. Our mission is to help men and women around the world realize that aspiration, and express their individual personalities to the full. This is what gives meaning and value to our business, and to the working lives of our employees. We are proud of our work.

As a Business: Their strategy for leadership is based on continuous investment in rigorous scientific research and development. This enables Their brands to deliver products which are innovative, highly effective, practical and pleasant to use, and which are manufactured to the most demanding standards of quality and safety. they aim for excellence, and constantly challenge ourselves and our methods. We place great value on honesty and clarity: Their consumer advertising is based on proven performance and scientific data. They are committed to building strong and lasting relationships with our customers and their suppliers, founded on trust and mutual benefit. They do business with integrity: They respect the laws of the countries in which we operate and adhere to good corporate governance practices. They maintain high standards in accounting and reporting, and support the fight against corruption. They deliver long-term, sustained shareholder value by protecting and making the most effective use of company assets.

As an Employer:

They aim to make L’ORÉAL a great place in which to work. We know that our employees are our greatest assets. They are entitled to a safe and healthy working environment: one in which personal talent and merit are recognized, diversity is valued, privacy is respected, and the balance between professional and personal life is taken into account. They believe in offering our employees a stimulating environment, exciting personal opportunities and a chance to make a difference. They encourage an atmosphere of openness, courage, generosity and respect, so that all our employees feel free to come forward with their questions, ideas and concerns.

As a Responsible Corporate citizen:

They play our part in creating a world of beauty and fairness. They are mindful of our impact on the natural environment, including biodiversity, and constantly seek to reduce it: They are determined to avoid compromising tomorrow for the sake of today. We make a positive contribution to the countries and communities in which we are present, and respect local cultures and sensitivities. They are committed to the respect of human rights. They want to help end the exploitation of children in the workplace and the use of forced labor. They want an end to animal testing in our industry, and we contribute to the development and acceptance of alternative methods. They actively seek out and favor business partners who share their values and our ethical commitments.

2. Production

Production Development Process:

Safety Evaluation

L’Oreal takes safety very seriously and, well before it was required by law, we had put in place a safety evaluation team to ensure the safety of our products for both professionals and consumers.

Our International Safety Evaluation Division uses a multi-disciplinary scientific approach to evaluate the safety of our products, ensuring that our commitment to product safety is upheld at every stage in the product’s life.

This safety assurance procedure includes an assessment based on the latest medical and scientific research, rigorous safety evaluations of ingredients as well as finished products, examination of the effects of cumulative product use and ongoing safety monitoring once a product is on the market.

Product safety studies are designed and monitored and their results interpreted and evaluated by scientists who are specially trained and experienced in safety evaluations.

Step 1: Review of Available Safety Information on the Ingredients

This is the first stage in a new product’s life when its composition is defined by their scientists and each formula is registered in a dossier. If it is a plant extract the scientists will examine its botanical origin. Each ingredient of the product is then evaluated. Once each ingredient, natural or synthetic, has been defined chemically and analytically, as the case may be, all available use and safety information on the ingredient is investigated.

At this preliminary stage their scientists also take into account the anticipated consumer use of the finished product.

The final step in this first stage is to check the regulatory considerations for the market where the product will be launched and ensure that by including these ingredients we are complying with the local law regulating the use of them. The use of numerous cosmetic ingredients is strictly controlled in many countries of the world today.

Step 2: Safety of the Ingredient in the Context of the Finished Product.

Following this initial analysis, they consider in detail how a new ingredient will be used when incorporated into a finished product. To do this, they look at which part of the body this finished product will be applied. They analyze whether it will be only used on the face, or under the arms, or around the eyes. They check to see whether there is a possibility that the ingredient may be ingested (toothpaste or lipstick for example). They also establish whether one or more ingredients could be inhaled (aerosol, for example).

In tandem with this evaluation, they look at how much of the skin surface will come into contact with the ingredient in question. Is the ingredient going to be used in a cream that is specific for the hands? Or will it be in a body lotion that may be used all over the body?

Then they analyze how often the ingredient will be used in the context of the product. Will it be something that is applied every day? Or once a month? Or even several times a day?

They also examine how much of the product and, therefore ingredient, is used each time. For this we have data gathered from across Western Europe which allows us to know in detail how much of our cream, lipstick or mascara is used each day by our customers.

Finally, they anticipate all the possible mis-uses of a product (for instance, a shampoo, used to wash the whole body; a lipstick, used on the cheeks to add color) to ensure that the ingredient is safe for use beyond the original intended use of the product.

Step 3: Approving Safe Concentrations of the Ingredients.

Once they have collected all the necessary information about the ingredients and the way the cosmetic product is likely to be used, they can carry out a analysis to establish a concentration at which a given ingredient may be used safely in these different cosmetic products.

This analysis is a calculation that establishes the so called “Margin of Safety”. At L’Oréal this margin is typically a use level of the ingredient that is 100 times below what is known to be safe under experimental conditions and allows us to extrapolate from experimental conditions to real life. As a result of this calculation, different limits are imposed on the use of the same ingredients in different product types, e.g. higher concentration may be allowed in shampoo, because it’s rinsed off skin after use and a much lower concentration will be allowed in a face cream.

This Margin of Safety procedure is described, among others, in the European document called “Notes of Guidance for the testing of cosmetic ingredients and their safety evaluation”, 6th revision (2006), written by the Scientific Committee on Consumer Products and issued by the European Commission’s Health and Consumer Protection Directorate General.

On the basis of the information gathered in Steps 1, 2 and 3, a safety assessor endorses the use of each of the ingredients at a given concentration in a given finished product. This information forms part of the Regulatory Dossier for each ingredient.

Step 4: Safety Testing of the Finished Product.

Once the ingredient evaluation stage is completed and proved satisfactory, the European Cosmetics Directive does not require L’Oréal to go any further with its testing, but at L’Oréal we often submit the new product to further in-vitro tests and clinical tests with human volunteers

The first stage of testing is done using in vitro studies in which a new product is often compared to another, similar and well known product.

Clinical testing is carried out in human subjects when we know that the product is safe as we want to establish the tolerance of the product in potential customers. This is a more complex procedure as we look at objective signs as well as subjective feelings about the product.

Step 5: Safety Validations for the Finished Product.

Once the product has passed through steps 1-4 then one of our safety assessors will give his or her approval and will sign a safety attestation. This attestation forms is included in the Regulatory Product Information File, supplied for each product.

Step 6: Product Launch and Post-Market Surveillance

L’Oréal continues to evaluate consumer use and potential sensitivities to our products sold around the world on an ongoing basis. A ‘cosmetovigilance’ network was set up twenty-five years ago to provide this monitoring function. The network collects, validates and analyses, through the application of rigorous and recognized methodology, any undesirable events which may be related to the use of a product.

Through their worldwide network of Consumer Services departments, consumers can advise us of a tolerance issue which is immediately communicated to our ‘cosmetovigilance’ department who then examines the file, the formula and the ingredients. It then contacts the consumer and/or his or her doctor, if necessary, to help resolve the issue, carrying out additional investigation, whenever required, before reporting back to L’Oréal’s management on any potential implication involving our product.

Research and Development:

Everything at L’Oréal begins with science and knowledge. All of our products are based-on intensive scientific research. We employ 3,000 scientists who work in state-of-the-art research centres around the world.

In addition to developing new formulas and ingredients, our scientists also study the structure and function of the skin and hair, discover new molecules, investigate best combinations of personal care products and how to maximize product performance and safety.

The development of new products involves scientists from a variety of disciplines, such as chemistry and biochemistry, biology, microbiology, toxicology, packaging engineering, dermatology and quality assurance.

At L’Oréal, we have a long-standing policy of allocating 1/3 of the company’s Research and Development resources to fundamental research projects, which are targeted at progressing knowledge in three main disciplines: skin, hair and color.

A decision, made almost twenty-five years ago, to invest in biotechnology and the life sciences in particular, has given us the means to better understand skin and hair, to reconstruct the skin, and to pave the way to develop products that fight ageing of the skin, hair and skin pigmentation disorders.

Research into new cosmetic ingredients and formulations can take many years and often the research conducted by our scientists leads to breakthroughs with a wider contribution to scientific knowledge. For example, we are now able to grow hair in test tubes in our laboratories, enabling us to carry out numerous tests on new shampoo and conditioner ingredients.

3,268 employees of 60 different nationalities working in 30 different disciplines.

€ 581 million dedicated to cosmetic and dermatological research in 2008

18 research centers across the world and 13 evaluation centers

1/3 of the R&D budget devoted to Advanced Re5 000 formulas developed each year

628 patents filed in 2008100 active cooperation agreements with leading academic and research institute

Governmental Regulation:

In addition to the rigorous safety testing that L’Oréal conducts for each finished product before making it available for sale, they are also held accountable to governmental requirements for safety in the 130 countries where they market our products.

Whether governed by the European Cosmetic Directive, the US Food and Drug and Cosmetic Act or any other local laws that regulate the sale of cosmetic products, L’Oréal meets or exceeds the legal obligation for product safety in each country where their products can be purchased.

Operations:

42 factories around the world

4,6 billion units manufactured in 2008

95% of factories are ISO 14001-certified

95% of L’Oreal’s industrial sites audited with standard SA 8000

3. Finance

2008 annual results

Sales: € 17.5 billion in 2008

Operating profit: € 2.7 billion

Net earnings per share (1): € 3.4

Dividend (2): € 1.44

(1) Diluted net earnings per share based on net profit excluding non-recurrent items after minority interest.

(2) Dividend to be proposed to the Annual General Meeting of Shareholders on April 16th 2009.

Financial ratios:

Particulars 2007 2008

(% of sales) operating 16.6% 15.5%

Net profit excluding non-recurrent items after minority

interest / opening shareholders’’ equity (% of

shareholders ‘equity)

13.9% 15.2%

Net gearing (% of shareholders ‘equity) 17.4% 31.3%

Cash flow / investment 3.5x 3.7x

4. Human Resources

These are the details about the L’Oreal Company in all over world.

67,662 employees in 58 countries

84% of the young graduates hired in 2008 were former L’Oreal interns

5 Management Development Centers

L’Oreal is the ideal employer for business students in Europe in 2008

(Tendency Europe survey, Managers edition)

L’Oreal employees worldwide have been involved in social commitment actions

for over a decade.

Recruitment:

The Group has established multiple partnerships in France, in the USA, Latin America and in South Africa with several Universities, associations and recruitment agencies involved in diversity. These partnerships enable us to gain access to various candidates of different backgrounds. The Group also takes part in varied recruitment forums dedicated to candidates from minority groups or dedicated to women.

Training:

Since the end of 2006, a specific diversity training program is being rolled-out to 8000 managers in Europe (over 32 countries). This training aims to involve, give responsibility to and help managers in implementing the Group’s diversity policy. This training at European level joins the training that has been underway in the USA for two years where more than 2000 have already been trained.

5. Material Management

Raw Materials / Suppliers

Manufacturing our products requires a wide range of raw materials that areblended in our formulas. L’Oreal directly partners with suppliers that specialize invarious technical groups, such as:

Polymers Fats Natural products Perfumes Sunscreens Vitamins

Packaging / Suppliers

For L’Oreal, it is essential to offer our clients innovative, environmentally friendlyPackaging that promote our products. To do so, we collaborate with a broad rangeof suppliers involved in various technological fields, such as:

Plastic bottles and jars Glass bottles and jars Molded parts Plastic tubes Aluminum tubes Spray cans Distribution systems Labels

Pop – promo / suppliers

In order to promote their products and make them stand out in sales outlets, as well as to attract their consumer and clients,loreal has developed display cases, promotional objects and accessories.The purchasers work as partners with a broad range of specialized suppliers that are capable of offering.

Permanent POS Promotional POS Printing Promotional items etc.

Equipment / suppliers

With numerous production plants worldwide, L’Oreal collaborates with a board community of industrial equipment suppliers divided into three categories:

Manufacturing equipment: production skids, weighing equipment, washing equipment, etc.

Packaging machines: fillers, labelers, distributors, multi pack machines etc.

Utilities: compressors, boilers, cooling systems, paletting, fire safety, etc.

Indirect purchasing / Suppliers

The indirect purchases team, which covers a broad range of activities within L’Oreal, has a direct relationship with numerous suppliers. The Group has therefore split its general expense sheet into various purchasing categories, such as

Intellectual services Travel, relocation Meetings/events Building fees Temporary employment IT and Telecommunications Human resources Office and technical supplies Energy & fluids Maintenance & spare parts Personnel-related services Express transport Insurance Documentation

Outsourcing partnerships / Suppliers

Alongside the internal production of these products, the Group collaborates with abroad range of subcontractor companies, such as:

Packaging or finishing finished products

Manufacturing specific finished products (soaps, pencils, cloths, etc.)

Logistics

6. Social Responsibility

L’Oreal India announces the For Young Women in Science Scholarships:

In its continuous efforts to encourage women to pursue careers in science, L’Oreal India announced, from the seven consecutive years, the For Young Women in Science Scholarships.

L’Oreal India will award scholarships to 5 deserving girl students from the state of Maharashtra. Each scholarship consists of an amount of Rs. 2.5 lacs, granted over a period of four years of study in a scientific field in a recognized college or university in India.

The L’Oreal India Scholarships For Young Women in Science Programme is an extension of the international L’OREAL UNESCO FOR WOMEN IN SCIENCE partnership.  The L’Oreal India for Young Women in Science Scholarships program with the support of the Indian National Commission for Cooperation with UNESCO has helped young women, passionate about science, to achieve their dreams and aspirations of pursuing a career in science. By providing the financial assistance to pursue scientific education.

L’Oreal celebrated its 100th year with the launch of Beautiful Beginning:

Beautiful Beginning is an NGO specialized in free vocational training and Education in Beauty to the underprivileged. It is an initiative providing training in beauty services to under privileged girls. It will provide beauty service training to 200 poor urban girls (school drop-outs) each year of Mumbai and Pune. As a result these girls either become employable in existing beauty salons or are able to set up their own small beauty salons. They become economically secure and get more freedom to balance their family duties.

7. Awards and Recognitions

Year 2010:

L’Oreal named one of the “world’s most ethical companies” for 2010

Year 2009:

Two L'Oréal brands Win marie claire prix d'excellence 2009 beauty awards. L’Oreal ranked among the world’s 100 most sustainable corporations by

corporate knights et innovate. Admiral presents L’Oreal with corporate-philanthropy "Oscar"

Year 2008:

L’Oreal receives accolade for the quality and transparency of its financial communication.

L’Oreal receives accolade for the quality and transparency of its financial communication.

8. PESTEL Analysis

PESTEL Analysis is a popular method of examining the many different external factors affecting an organization.

Political:

The current and potential influences from political pressures.

Taxation policy Privatization Deregulation International trade regulations General initiatives Government stability International stability

Economic:

The local, national and world economy impact.

Interest rates Money supply Credit control Financial markets Inflation Competitors pricing Globalization

Indian cosmetic industries is least affected when compare to other developed economy and Indian cosmetic industry developed by 7.5%, which attributed to our policy frame work with respect to capital and liquidity. Maybelline have built strong links with trade based on mutuality in support of Indian government. ECONOMICAL Indian economy registered a growth of more than 7.5 % even in times of global recession and is maintaining robust growth rate as compare to other countries which are developed anddeveloping, so Indian cosmetic industry is directly related growth of economy, which is highly support cosmetic industry.

Sociological:

The ways in which changes in society affect us.

Mobility Income distribution Population demographics Attitude to work and leisure Standard of education and skills Working conditions

Socially LOREAL is still considered as a foreign brand and the people’s perceptionTowards LOREAL is that of an imported brand. This gives the brand the ability to cash in the Indian peoples strong desire of using a imported brand, but this deprives the brand of the brand loyalty that the Indian brands such as Lakme and Revlon.They are strong in organizing social and promotion events like fashion shows, which build huge reputation among the people.

Technological:

How new and emerging technology affects our business.

IT Development New Materials and processes Government technology funding Speed of technology transfer Software upgrades

Technology advancement changes the face of traditional Indian cosmetic market. Itis giving faster and secured service, strong consumer understanding and Technology of company has been delivered world class product. Company also Introducing new innovating technology due to advancement in technology, Hence technologies continue to evolve and it will meet consumer expectations and habitats.

Environmental:

The local, national and world environmental issues.

Pollution problems Planning permissions Waste disposal Noise controls Environmental pressure groups

LOREAL India has till now not faced any major environmental issues in India, but lately they has been accused by PETA for using animals for testing its products. LOREAL silenced these critics by opening its testing facility to critics and proving that they do not use animals for testing and no cruelty is done against animals in its testing facility.

Due to these environmental issues LOREAL has been lately focused in launching more and more or environmental friendly products in its portfolio. But, one of the main problems, with these external factors, is that we have little or no control over them and can change the position of the company in a matter of time.

Hence, PESTLE Analysis can not consider wholly as a parameter for strategy planning. It can be however used as a parameter to determine a company’s current situation and used for short term strategy planning.

Legal:

How local, national and world legislation affects us.

Employment law Trade and product restrictions Health and safety regulations EU and international laws Monopolies commission

LOREAL works well within the legal framework of India. The factories ithas in Pune and Bangalore are build following all legal formalities. Maybellinehas been under criticism in international market for the false claims and theProblems of chemicals used in its products .But there have been no such major problems in India.

9. SWOT Analysis

Strengths:

It has an extensive, multiple, cleverly selected distribution Channels

·The strong Unique Selling Point on specialty stores

Main focus on female beauty and experience

It has wide and large range of products

The product’s components are made of very high quality

It is a brand owned by L’Oreal

·It is a global brand

They are able to be global and to act local; market leader

Suit Research & Development to different target groups· Effective distribution system

Weaknesses:

It is introduced just lately in the Indian market so it has a weak Image in comparison to many competitors.

A decentralized organizational structure that can make control Difficult.

It is difficult to operate in the mass market like India.

Profit margins are slightly below some of their smaller rivals.

A weaker brand name awareness as compared to other renownedand well established brands.

Opportunities:

Existence of some gaps and potential in the market which can be explored and made use of.

Technological advancements can add a great acceleration to the quality of the brand

Product line can be extended to procure more market share

Focus on innovation:- Enhancing competitiveness

People attach more & more importance to quality and fixed/ global brands.

Target groups with growth potential (Men & ageing population ofIndia).

Threats:

Success: If a product under a brand becomes popular then it leads to imitation and reactive attack by competitors.

Failure : If in case a product is a failure , then it causes a negative impact on the brand name.

Selective markets: bigger market shares.

It could perhaps distract the company of its core business.

Economic crisis and its impact on consumer spending patternscan hurt the company

10. future plans:

The company plans to open 110 more Body Shop outlets across the globe next

year. The share of the Indian market to L’Oreal’s turnover of €15.8 billion is

small, but is growing. With other emerging economies, India's contribution to the

growth in the global cosmetics market amounts to 60 per cent.

The company sees an addition of 70 million new consumers due to growth in per

capita income in the world's population. L’Oreal has termed this potential as a big

opportunity for the company.

The beauty and wellness sector in India is on the brink of a boom, according to

research agency AC Nielsen.

11. Sources of Information

http://www.wikipedia.com/

http://lorealindia.com/

http://suppliers.jimtrade.com/

http://www.cosmeticsdesign.com/

http://investing.businessweek.com/