L'Oreal - Business Policy and Strategy

Topics: Strategic management, Market, Cosmetics Pages: 28 (8843 words) Published: April 1, 2008

L’Oréal was established in 1909, and by now the company is one of the leaders in the beauty market while providing a wide variety of products for each segment of its market tailored to meet expectations of its customers. L’Oréal does and has always have believed in the strategy on innovation and diversification. Due to the products’ uniqueness, L’Oréal’s product became well-known and popular among all ethnic groups, not depending on gender.

The company’s mission is to promote an approach to beauty that is fun, affordable, fulfilling, genuine and generous while meeting all stakeholders’ expectations by providing a portfolio of deeply diversified range of products. (L’Oréal Group 2007)

Striving For Excellence: L’Oréal is trying to enchant the brand portfolio with continuously innovating products while meeting all standards set for quality and safety. Passion for adventure: their expertise drives their passion for new discoveries and innovation in cosmetics. Enrichment through diversity: understanding and valuing each individual is an essential part of their corporate culture. Their staff members come from many different backgrounds and work together to offer a full range of products through varied distribution channels. Valuing individual talent: they are dedicated to enhancing the well-being of their consumers; they also ensure that each employee has the opportunity to develop his or her potential through personal and professional growth. Leading innovation in beauty: research, sensitivity to consumer needs, know-how and expertise are as essential as intuition. Building on their unrivalled experience and expertise, fundamental research is a specific focus of investment that drives creativity and contributes to developing the cosmetics of tomorrow.

“A company that is highly successful economically.
A company where people are enthusiastic about going to work. A company that respects the environment and acts as a global citizen.” (Sustainable Development Report 2006) Achieving this will lead to L’Oréal being one of the most exemplary companies in the 21st century.

L’Oréal wishes to reach its vision by achieving its three most important goals; to achieve economic success as overriding priority, making L’Oréal a company where employees blossom both personally and professionally, and to make L’Oréal be seen as a ‘global citizen’.

Objectives are mainly quantified, more precisely described goals. We cannot serve with these figures, but among the objectives the first few places will be nominated to a growth in market sale, in consolidated sales figures and in operating profit.

Financial Highlights

At September 30th 2007, the sales of the L’Oréal, was amounted to 12.639 billion euros, based on reported figures, therefore we can conclude that the sales have increased by +8.6%, compared to previous years. This increase in sales are manly the result of the acquisitions of The Body Shop, Sanoflore, Beauty Alliance, PureOlogy and Maly’s West. However, some economic factors, more precisely the exchange rates have affected the company’s profit negatively. Apart from this, the following table summarizes the sales of L’Oréal by operational division and geographic zone.

Sales by operational division and geographic zone
Third quarter 2007 At September 30th 2007
Growth Growth
€mLike-for-likeReported €mLike-for-likeReported
By operational division
Professional Products615.9+ 7.1%+ 16.7%1,769.4+ 7.1%+ 10.7% Consumer Products2,013.1+ 8.0%+ 5.8%6,290.1+ 8.1%+ 5.2% Luxury Products938.8+ 7.2%+ 3.5%2,772.1+ 6.9%+ 2.9%
Active Cosmetics268.3+ 9.4%+ 11.0%984.6+ 9.9%+ 10.0%
Cosmetics total 3,848.9+ 7.6%+ 7.0% 11,863.4+ 7.6%+ 5.6% By geographic zone
Western Europe1,679.1+ 4.0%+ 3.7%5,479.3+ 3.8%+ 3.6%
North America1,037.9+ 4.3%+ 3.9%2,967.7+ 4.0%+ 0.1%
Rest of the World, of which:...

References: L’Oreal USA, 2002, http://allianttech.com/Downloads/CaseStudy_AT_LOreal.pdf
ICFAI, 2003, http://www.icmrindia.org/casestudies/catalogue/Marketing/MKTG062.htm
Wikipedia, 2007, http://en.wikipedia.org/wiki/L 'Or%C3%A9al
Nestlé S.A., 2006, http://www.snapdata.com/Nestle_2006.pdf
Euromonitor International: Company Profile, 2007, http://www.snapdata.com/Nestle_2006.pdf
E-Beauty News, 2004, http://www.beauty-on-line.com/ebn/newsletter.asp?eid=92
Beauty-Biotech, 2005, http://beautybiotech.blogspot.com/2005/10/how-loreal-become-world-largest-beauty.html
L’Oréal Group, 2007, www.loreal.com
L’Oréal Group, 2007, www.loreal-finance.com
L’Oréal Group, 2005, http://www.corporateregister.com/a10723/loreal03-sus-fr.pdf
Financial Times, 2007, http://www.ft.com/cms/s/0/ed8b5714-8b2a-11dc-95f7-0000779fd2ac.html?nclick_check=1
Financial Times, 2007, http://www.ft.com/cms/s/0/4127fde6-9607-11dc-b7ec-0000779fd2ac.html
Owen-Jones Chairman of the Board of Directors since April 25, 2006.
Jean-Paul Agon Chief Executive Officer since April 25, 2006
Director since April 25th, 2006

Liliane Bettencourt Director (the tenure was renewed on April 24, 2007)
Jean-Louis Dumas Director until April 25, 2006, did not wish to renew his tenure as director in 2006

Annette Roux Director since April 24, 2007
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