L'Oreal Case Study
This report looks at how did L’Oreal, a multinational corporation, managed its already portfolio as well as its newly acquired local brand when entering on a new market: China.
L’Oreal, a french company founded in 1907, decided at the end of 2003 to acquire two local chinese brands in order to enter the national market: Mininurse and Yu-sai.
While this merging seems to be a «win-win» deal, we will look at several issues L’Oreal was confronted with: how did the brand managed its newly acquired brand, as well as what were the opportunities of growth for the corporation.
Recommendations will also be given on how would we have manage L’Oreal’s already existing very diversified portfolio in this new market.
2.Background to the Company
Founded in 1907, L’Oreal is now managing a very diversified portfolio including cosmetics, skin and hair care products as well as high end fashion brands such as Ralph Lauren.
This diversified portfolio reflects the brand’s strategy to be as important as possible on the market and occupy every segment, in order to avoid competition as much as possible, reinforce their reputation world widely and convey through their different brands’ images several cultures. For instance, Ralph Lauren will convey a very american «preppy» sense of fashion, while Lancôme will convey a very «glamorous parisian» image of cosmetics.
Research&Development is a major investment for the company, as it enables the company to launch innovative product on different markets, as well as protecting its product from copying thought its patents. Furthermore, innovation aimed at high end product is diffused to consumer products, which enable the brand to lower the total cost of R&D.
The brand has organised its portfolio using a pyramid, classifying ever of its brands at one stage depending on the targeted market.
3.Development
To develop on the Chinese Market, L’Oreal acquired two local brands. China is potentially the largest market in the world, with
L’Oreal, a french company founded in 1907, decided at the end of 2003 to acquire two local chinese brands in order to enter the national market: Mininurse and Yu-sai.
While this merging seems to be a «win-win» deal, we will look at several issues L’Oreal was confronted with: how did the brand managed its newly acquired brand, as well as what were the opportunities of growth for the corporation.
Recommendations will also be given on how would we have manage L’Oreal’s already existing very diversified portfolio in this new market.
2.Background to the Company
Founded in 1907, L’Oreal is now managing a very diversified portfolio including cosmetics, skin and hair care products as well as high end fashion brands such as Ralph Lauren.
This diversified portfolio reflects the brand’s strategy to be as important as possible on the market and occupy every segment, in order to avoid competition as much as possible, reinforce their reputation world widely and convey through their different brands’ images several cultures. For instance, Ralph Lauren will convey a very american «preppy» sense of fashion, while Lancôme will convey a very «glamorous parisian» image of cosmetics.
Research&Development is a major investment for the company, as it enables the company to launch innovative product on different markets, as well as protecting its product from copying thought its patents. Furthermore, innovation aimed at high end product is diffused to consumer products, which enable the brand to lower the total cost of R&D.
The brand has organised its portfolio using a pyramid, classifying ever of its brands at one stage depending on the targeted market.
3.Development
To develop on the Chinese Market, L’Oreal acquired two local brands. China is potentially the largest market in the world, with