A. Internal Analysis
The ongoing success of the L’Oreal Group is without if not for the ingenuity of the concept of their vision as a team. The primary strength of the Company is the continuing research and innovation in the interest of beauty which assures that the L’Oreal Cosmetics offers the best to their consumers. Their dedication to their continuous research makes them the leader in the growing cosmetics industry despite the competition in the market. L'Oreal's strengths include the fact that it is the largest seller of haircare and beauty products in the world. It is the market leader, concentrating on 12 core brands which account for 90% of its sales. Some of these products are diversified by price, and some by cultural image. The company has taken advantage of economies of scale in packaging and advertising, enabling improvements in profit margins. Its net profit has doubled every 5 years during the last decade. L'Oreal provides significant funding to research and development, uses and develops leading-edge technology, and regularly and successfully introduces new products onto the market. 2) Weaknesses
Perhaps one of the weaknesses that a big company faces is the decentralized organizational structure. Due to the many subdivisions of the Company, there is also the difficulty in the control of L’Oreal. This slows down the production of the Company because of the need of giving reference to the other Board members and directors of the Company. Another weakness that L’Oreal faces is their profit. The profit margin of L’Oreal is comparably low than that of the other smaller rivals. While L’Oreal projects certain rise in digits as their profit, the result does not usually meet the expectations (Sang, 2003). Perhaps, this is also due to the high-end advertising and marketing as well as the width of the Company. Finally, the coordination and the control of the activities and image in the worldwide...
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