Core Competence

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Identify L’Occitane’s core competence. With reference to resource based view, explain how the competence was created.

1. Respect for the Environment
L’Occitane invested heavily in developing products that contain rich natural ingredients with traceable origins. The company follows the principles of phytotherapy and aromatherapy, without using animal products. All product tests are under medical supervision rather than tests on animals. L’Occitane also limits the use of silicones, chemical sunscreens, paraben preservatives, instead, uses certified organic ingredients. Besides, all products are produced in the way of respecting the environment and the production factories sort and recycle most of its waste and strive to limit its energy consumption. The use of packing material and paper are limited and mainly come from sustainably managed forests.

2. Core Values that Attract Customers
L’Occitane decorates its stores to tell stories about the Provencal origins and traditions of the major ingredients that are used to make the products in order to associate its values with the brand image. This enables L’Occitane to distinguish itself from its competitors and to charge premium prices, and thus to position the products toward a higher end market. Besides, the company conducted various researches about the needs and preferences of its existing customers via a global retail management system. This allows L’Occitane to tailor its marketing strategies to address the needs and preferences of these customers. Moreover, the company attracts both its existing and new customers to visit and revisit its stores by introducing various new products and marketing campaigns.

3. Strong Brand Presence
L’Occitane invested a lot to expand its presence in high-growth emerging markets, for examples China, Brazil and India by adopting a systematic and profitability-driven expansion policy. Also, the company expanded its network by establishing more own stores,...
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