Strategic Management and Swot Analysis

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a. Brand Extension for L’OREAL
a. Ansoff Matrix
b. SWOT Analysis
c. BCG Matrix

Brand Extension for L’OREAL
Brand extension takes place whenever a company wants to enter a new market by using the name of one of its existing brands, rather than using a new one. Especially the luxury sector takes advantage of its well-known brand names when it comes to launching new products into new markets (Kapferer, 2008, p.295). The popularity of brand extension strategy is due to the belief that it leads to higher consumer trial than the use of a new brand name because of the awareness levels of the brand name being leveraged (Keller, 2003, p.582).

L’Oreal as a global brand is known for high quality cosmetic goods like make-up and hair care products for women, men and kids. Its mission “Beauty for all” connects with the company’s slogan “Because you're worth it”, which is used in nearly every single L’Oreal advertisement. To identify all the different products of the brand’s portfolio they utilize the same logo for all of their goods by adapting to the specific field (L’Oreal homepage, 2012).

Considering L’Oreal’s image of good appearance we decided to extend the brand by entering a new market with a new product. The diversification L’Oreal shoes should be placed in the customer products area with a target group of professional women. The leather shoes should be available for middle to high income consumers. Though the price is affordable for this group of customers the quality is still high. With this strategy we want to cover the needs of the existing customers and reach out for new potential clients. On one hand we intend to increase our sales and profits; on the other hand we use the good reputation of L’Oreal to get our new product connected to the values of the umbrella brand. To make sure that we created a new logo keeping the...
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