L'OREAL

L'OREAL Market leader in cosmetics

Presented by:Nisha Agrawal15DM027

L'OREAL

Introduction The L'Oreal Group is a

French cosmetics and beauty company, headquartered in Clichy, Hauts-de-Seine. It is the world's largest cosmetics company, and has a registered office in Paris. It has developed activities in the field of cosmetics, concentrating on hair color, skin care, sun protection, make-up, perfumes and hair care, the company is active in the dermatology, toxicology, tissue engineering, and biopharmaceutical research fields and is the top nanotechnology patent-holder in the United States.

L'OREAL

History 1909-1956 : The first steps,

constructing a model 1957-1983 : "On the road to the Grand

L'Oreal" 1984-2000 : Become number one in

the beauty industry 2001 - Present day : Diversity of

Beauty worldwide

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Mission

Everyone aspires to beauty. L'Oreal's 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 their business, and to the working lives of their employee.

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L'OREAL operates through 4 divisions:

Consumer product division L'Oreal Paris, Garnier, Maybelline NY. Professional product division L'Oreal Professional, Matrix, Kerastase. Active cosmetic division Vichy. Luxury product division Lancome, Biotherm, Giorgio Armani,

Ralph Lauren

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40%

4%

5%

3%3%

6%

13%

15%5% 3% 3%

Others

Lancome

Guerlain

Kenzo

Vichy

Givenchy

Christian Dior

Chanel

Ester Lauder

Yves Saint Laurent

shiseido

Market Shares

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Four key aspects of business model

Universal Innovative Nimble Entrepreneurial

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KSF (Industry Key Success Factor)

Unique product Stay close with consumer Represent slogan by the celebrities or

famous movie stars Product segmentation Affordable price with high quality Given discount to attract consumer Category product based on gender Promoting collaborative innovation

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SWOT Analysis Internal Analysis

Strengths •Strong brand portfolio - Its brand lineup includes Body Shop, Garnier, Maybelline, Kerastase and Redken, all of which are recognized globally. •Diversified geographic presence - The company, currently has operations in over 130 countries across five continents. •Strong R&D capability- L'Oreal has strong research and development (R&D) capability, focused on cosmetology and dermatology.

Weaknesses

•Less dynamic in natural/organic - L'Oreal has been less proactive in the natural/ organic category, although it has done well to revive The Body Shop. It could benefit from greater penetration in the category.

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External analysisOpportunities •A demographic trend- Growing beauty consciousness especially among the aging baby boomers is an important trend for all cosmetics companies. •Cosmetics market in emerging nations- rise for cosmetics companies due to increasing popularity of beauty contests and increasing disposable incomes.

•Threats•Growing popularity of cosmetic surgery•Intense competition- The Company competes in selected product categories against a number of multinational manufacturers.•Counterfeiting- Counterfeit products not only deprive the company of revenues, but also dilute its brand image.

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PESTLE AnalysisPolitical The political challenge is that L'Oreal should

conform to all the different government leadership styles in various countries it operates within.

L'Oreal is obligated to produce safe products that do not contain any harmful substances.

L'Oreal has to follow the rules set by Advertising Standards Authority. For example, advertisements cannot be misleading that over-exaggerating the functions of a product.

L'OREAL

Economical L’Oreal’s main consumer products categories are all

highly sensitive to global economies of scale and scope. L'Oreal should adapt to all the different economic

environments and problems in all countries it operates in. For example in 2004, L'Oreal was affected by the continued weakness of the dollar and other currencies.

Social The culture of a country consists of the values,

attitudes and beliefs of its people. L’Oreal Recognized by Foundation for Social Change

as a "Leader of Change" Recognized for approach to sustainable, responsible

and inclusive growth and for creating positive social impacts while reducing environmental footprint.

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Technological Scientific knowledge of the skin and hair

accumulated by L'Oreal for over a century has opened the way to great innovations.

Active ingredients, formulation procedures, evaluation technologies.

Legal L'Oreal's legal teams make a vital

contribution and shed expert light on legal decisions.

Their missions consist mainly in making L'Oreal's business operations legally secure.

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Environmental Environmental concern is L’Oreal use

natural ingredients mostly which is environment friendly.

L’Oreal manage a programmed of internal audits and establish indicators for measuring and reporting on group performance in terms of the environment.

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Porter's five force model

Threat of New Competitors

•Strong distribution network required.•High capital requirements.•Advanced technologies are required.•Geographic factors limit competition.•Patents limit new competition.•Entry barriers are high.

Bargaining Power of Suppliers

•Large number of substitute inputs.•Low cost of switching suppliers.•High competition among suppliers.•Volume is critical to suppliers.

Bargaining Power of Customer

•Product is important to customer.•Large number of customers.

Intensity of Existing Rivalry•Fast industry growth rate•Large industry size.

Threat of Substitutes•Substitute product is inferior.•Substantial product differentiation.

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Competitive Profile Matrix 

CPM Matrix

Estee Lauder Proctor & Gamble L’Oreal Group

Critical Success Factors W R W.Sc R W.Sc R W.Sc

Brand loyalty 10% 4 0.4 3 0.3 4 0.4Brand value 10% 4 0.4 3 0.3 4 0.4Advertising 10% 4 0.4 4 0.4 4 0.4Product quality 10% 3 0.3 3 0.3 4 0.4Price 10% 3 0.3 4 0.4 4 0.4Management 5% 3 0.15 4 0.2 3 0.15Financial position 5% 2 0.1 3 0.15 4 0.2

Market share 10% 2 0.2 3 0.3 3 0.3R&D 10% 3 0.3 4 0.4 4 0.4CSR 10% 3 0.3 2 0.2 4 0.4Global markets 10% 3 0.3 4 0.4 3 0.3 100% 3.15 3.35 3.75

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Loreal Procter & Gamble

Unilever Estee Lauder

Shiseldo0

5

10

15

20

25

30Loreal; 25.89

Procter & Gamble; 19.57

Unilever; 16.98

Estee Lauder; 8.29Shiseldo; 7.75

Market Share

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SMART Model

Specific

Measurable

Realistic

Time

Achievable

L’Oreal’s ambition is for the coming years to win over another one billion consumers around the world by creating the cosmetic products that meet the infinite diversity of their beauty needs and desires.

L’Oreal has set itself the mission to achieve goal by offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety.

Based on a comparable structure and identical exchange rates, the sales growth of the L’Oreal group was+5.4% and the net impact of changes in consolidation was +1.0%.

Maximum recognition for L’Oreal is given by The French magazine indicates overall champions: L’Oreal, and pharmaceutical laboratory Sanofi Synthélabo which tie for the number one ranking.

L’Oreal adventure from its creation more than 100 years ago.1909-1956 : The first steps, constructing a model1957-1983 : "On the road to the Grand L'Oreal"1984-2000 : Become number one in the beauty industry2001 - Present day : Diversity of Beauty worldwide

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First quarter 2015 sales Like-for-like, i.e. based on a comparable

structure and identical exchange rates, the sales growth of the L'Oreal group was +4.0%.

The net impact of changes in consolidation was +1.2%. 

Currency fluctuations had an impact of +8.9%. Growth at constant exchange rates was

+5.2%. If end of March current exchange rates (€1 at $1.076) are extrapolated up to December 31, the impact of currency fluctuations would be +9.3% for the whole of 2015.

Based on reported figures, the Group's sales at March 31, 2015 amounted to 6.44 billion euros, an increase of +14.1%

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QUATERLY SALES GROWTH

€ MILLION 1ST QUARTER 2014 1ST QUARTER 2015 LIKE-FOR-LIKE REPORTED

BY OPERATIONAL DIVISION

Professional Products 735.2 852.6 3.5% 16.0%

Consumer Products 2,758.9 3,078.3 1.7% 11.6%L'Oreal Luxe 1,460.8 1,753.7 7.5% 20.1%

Active Cosmetics 507.4 559.2 7.6% 10.2%

Cosmetics Divisions total 5,462.2 6,243.9 4.0% 14.3%

BY GEOGRAPHIC ZONE

Western Europe 2,019.9 2,100.4 1.3% 4.0%

North America 1,295.2 1,622.0 2.4% 25.2%

New Markets, of which: 2,147.2 2,521.5 7.5% 17.4%

- Asia, Pacific 1,166.4 1,476.1 5.8% 26.6%

- Latin America 410.9 460.2 10.0% 12.0%

- Eastern Europe 426.8 396.6 9.2% -7.1%

- Africa, Middle East 143.1 188.7 11.3% 31.8%

Cosmetics Divisions total 5,462.2 6,243.9 4.0% 14.3%

The Body Shop 176.4 192.4 4.2% 9.1%

Group total 5,638.6 6,436.3 4.0% 14.1%

Sales by operational division and geographic zone 

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Conclusion After the extensive market research and studying

market analysis ranging from pestle, SWOT, BCG, SMART, etc of cosmetic sector, we can conclude that L'Oreal is the market leader in cosmetic industry with annual revenue of €22.98 billion and profit of €2.96 billion.

In 2014, L'Oreal was listed 61st among 1200 of India's most trusted brands according to the Brand Trust Report 2014, a study conducted by Trust Research Advisory, a brand analytics company.

Overall the company is at its maturity stage, performing well and has customer loyalty. Its innovation strategy gives a scope for greater market share and penetration.

L'OREAL

Thank You