L'oreal's Strategic Direction Essay

Pages: 9 (2929 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

SAMPLE EXCERPT . . .
Avoidance of 'recreating the wheel' in national and regional markets currently benefits L'Oreal in this regard.

Building legacy systems of operations and logistics into L'Oreal's oversight at these locations may be enhanced by IT database and also regulatory compliance measures for 'total' quality control.

3. Shared Value

L'Oreal has an exceptional reputation that resonates with the traditional identity of French beauty; and also incorporates new market interests

Ethics, equity, social responsibility and sustainable growth all correlate with contemporary values addressed within current advertising, business practice and trade policies.

L'Oreal's sustainability platform is responsive to1) community contribution through philanthropy; and 2) and in support of an ethical business culture.

Communication of L'Oreal's commitment to 'global' values should be further developed to support core to competencies.

4. Systems

Streamlined and flexible strategic planning within L'Oreal's business model translates new products to market through subsidiary brand identities.

Local systems may impinge upon timing of logistics.

Taxes and tariffs may shift according to market legislation.

Six Sigma tools such as the SWOT Analysis serve as addendums to internal auditing. From cost analysis of total chain operations, and R+D strategy, front-end evaluations advance regulatory and other risk mitigation efforts

5. Environment

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Environmental responsibility is essential to the L'Oreal brand identity, and works toward its obligations to fulfill 'green' business recommendations.

Responsible management of chemical engineering in cosmetics raises concerns of ecological damage.

Essay on L'oreal's Strategic Direction Amidst the Assignment

Use of alternatives oft means 'full cost pricing;' and consumers may reject products unless labeling and other promotions indicate that cost is derived from high degree of 'green' product consciousness.

L'Oreal stands to benefit from a dual approach to internal accountability to environmental management of risk and safety at the company's facilities and in the R+D of its products in accordance with state regulation and consumer preference for such products.

6. Design

L'Oreal's packaging design concept is built into product segmentation.

Appearance and reliability of the functional use of the product coincide. L'Oreal offers a wide array of products, and not all readily recognized as the brand identity by consumers.

Control of pilfering of proto-types by 'corporate spies' in R+D critical to market timing of new product introduction. Global firms with multi-tiered strategies find this a challenge.

7. Human Aspect

L'Oreal follows a French management strategy in regard to training and compensation. Benefits are good.

The micro corporate environment of a subsidiary in a new market may not be prepared to synthesize all aspects of recommended management practice.

National labor markets pose quite specific problems where employee compensation and 'rights.'

Implementation of standardized protocol at acquisition entities may be difficult without feasibility study in human resource development.

Table 3: SWOT Analysis: L'Oreal, SA.

Analysis of internal and external factors in an organization such as L'Oreal, puts competitiveness into negotiation with trade law, and serves to further define the strategic scope of organizational policy. L'Oreal is subject to a range of international trade laws; and attendant labor rules in the markets where it also manufactures. The decentralized approach of L'Oreal, where its main holdings and its subsidiaries share some cultural values and certainly procedures, must also be put under the microscope of external forces that may affect market position. Although retaining some of the traditional vertical hierarchy of highly qualified managers and technical experts, L'Oreal classifies its management model according to business development of product lines -- and those concerns may be very distinct dependent upon the consumer and operations contexts. L'Oreal assumes itself to be 'consumer-centric' in that the potential of its product and its 'magic' in the world of advertising must first meet the psychological needs of customers. The lesser told story, are liability issues and other legal considerations masked as social responsibility to the market and to the planet.

The seeming recalcitrant position of managers circumscribed to mostly 'local' roles and operational responsibilities actually clarifies the relationship between the power of the product, and the innate knowledge of strategic management in a regional or national market location. Thoroughgoing understanding of L'Oreal's legal agreements and training in this area would require additional research, yet the import of law to ethics within L'Oreal's articulation of conduct is interesting. All L'Oreal R+D innovation of products, their manufacture, distribution and sale refer to stipulations never seen in the seductive realm of mass advertising. L'Oreal's defiant success in the last several quarters certainly underscores the outcome to the Company's strategic management of the 'total' product channel (Blattberg and Thomson). Nevertheless, it is in the global marketing function and its impractical, practicality that we find the source of efficient mechanism realized.

Strategic planning at L'Oreal has been well thought out. Core competencies point to the end point assumption in comparative analyses of the cosmetic firm's product life-cycles. Chain management oversight still varies where local markets are introducing unique products drawn from natural resources, and subject to distinct regulation. L'Oreal's value chain activities must continue to increase quality control in order to meet new market recommendations. Green market participation inevitably means specialized facilitation of operations, outbound logistics, marketing, sales and services. Subsidiary interests have done much to update L'Oreal's traditional brand identity. The depth of consumer consciousness integrated into the company's strategic model can be addressed from the perspective of new market, or 'green' consumerism and its influence on business decisions by the global cosmetics conglomerate. Sustainable growth as a 'green' identity is quite literally an aspect of a complex of regulatory mandates and activities which have transformed the industry's methods of chemical compounds application and L'Oreal's innovations in new 'potion' design. The international polemic toward advocacy against 'animal testing' has been especially pronounced within the cosmetic industry's press; and this of course has change the scope of actual risk mitigation within L'Oreal's financial and research operations. Public debates over the appropriateness of cosmetic testing where animals are concerned has, quite conclusively, changed consumer cosmetics market in perpetuity.

Viability of 'time capsule' cosmetic products made of chemical compounds also raises concerns over the adequacy of product inventory in consideration of Strategic Business Units (SBU), puts L'Oreal in a unique position as a global corporation, in that the shelf life of the products is often short lived, often placing intense pressure on the reduction of chemicals within the brand, and 'stabilization' factors linked to the identity of the products as the 'highest quality.' L'Oreal is also making inroads through merger with existing brand identities known for environmentally sound products; reflected in its acquisition of the UK-based natural cosmetics retailer The Body Shop International's 2,550 stores worldwide. The Company's move in this direction bespeaks of a 'business' strategy more than a 'managerial' one, and despite the Body Shop's 4% drop in revenues in 2009, the value added by the brand supports its retention as a product line and image dedicated to global environmental cooperation (Hoovers).

Operations statements made by L'Oreal on their website provide a window on the consistency of their product development worldwide (L'Oreal). Adherence to the International Standards Organization (ISO) 9001/2000 compliance certification has been augmented in recent years by voluntary participation in ISO 14000, the environmental risk compliance recommendations to manufacturing. Conformity through audit to the U.S. Federal Food and Drug Administration regulation for monitoring and reception of materials, manufacture and packaging of cosmetics is coordinated with the extensive patent rights agreements forged each year in response to new product lines. Backed by "high performance" supplier relationships, L'Oreal participates in a "buy & care" program for dealing with enforcement of laws where supplier activities are part of the Group's partnership. It is here in the more elusive areas of strategic planning that L'Oreal has done a significantly better job than its competition. To this end, shareholder value creation emerges as a silent yet salient force behind the circulation of the cosmetic brand's identity in the market. The new dimension of marketing concepts that L'Oreal has virtually pioneered in its wake is merely a gloss, then, to the solid foundations of an otherwise esoteric image.

Works Cited

Conjoint Analysis Model Demonstration, Dobney.com, 2010. Web.

Edgeman, R. et al. Six Sigma for Government IT: Strategy & Tactics for Washington, D.C. Boise: University of Idaho, nd. Web.

Baker, S. New Consumer Marketing: Managing a Living Demand System. Hoboken, NJ: Wiley, 2003. Print.

Blattberg, R.C. And Thomas, J.C. Valuing, Analyzing and Managing the Marketing Function using Customer Equity Principles. In Iacobucci, D. Kellogg on Marketing. New York, NY: John Wiley & Sons, 2001.

Bertini, M., et al. The Branding of Next Generation Products. Advances in Consumer Research, 35, (2008): 834-834.

Egan, J.… [END OF PREVIEW] . . . READ MORE

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