Strategic Challenges Term Paper

Pages: 4 (1250 words)  ·  Style: APA  ·  Bibliography Sources: 2  ·  File: .docx  ·  Topic: Business - Companies

Strategic Challenges

L'Oreal - Company analysis

The following analysis will provide information on one the most important players in the international cosmetics industry, L'Oreal, and a brief history of this industry. The company's advantages, like its diversified target markets, its position as a worldwide leader on the market, its tradition, quality products, research and development activity as well as its innovative marketing approach, make of this company a powerful competitor for other companies in this industry. The company has several challenges to benefit from: major takeovers in the United States, Europe and Asia, new research and development centers in Asia, and other local strategic challenges. These opportunities are created by the company itself, and are not due to the market's conditions, as L'Oreal influences the market through its innovative products and activities.

Ever since ancient times, cosmetics have been present in people's lives, cosmetics products being used for beauty purposes or for medical ones. Over the ages, cosmetic products have been used in order to show the correspondence with a certain social status, or to change and improve the appearance, and even to prevent ageing.Buy full Download Microsoft Word File paper
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Term Paper on Strategic Challenges Assignment

In the 1920s cosmetic products have faced a real revolution, becoming an industry, due to the United States, where beauty products and fragrances were manufactured at an industrial scale, becoming more and more accessible due to chain department stores. However, the cosmetics industry's modern era began in the 1950s, when extremely diverse cosmetic products were manufactured and commercialized at a mass level, for a post-war society, satiated by privations. Given the importance that public relations were starting to develop, the cosmetic products were advertised both on radio and on the recently discovered television. In the 1970s, the cosmetics industry was facing certain obstacles created by ecologists, which lead to the interdiction of certain ingredients, in order to protect endangered species, and animal testing. Nowadays, the cosmetics industry is characterized by diversity. The annual sales incomes from the extended cosmetics market, that also includes plastic surgery, fitness and diet products, are over $160 billion worldwide. The American trio Elizabeth Arden, Helena Rubinstein and Max Factor, is responsible for the extraordinary development of the cosmetic industry. These were the companies that established the market, being surpassed only by Revlon before World War II, and by Estee Lauder right after the war.

However, L'Oreal is the oldest company and the worldwide leader, of the dominant cosmetics companies. L'Oreal was founded in 1909 by Eugene Schueller. The company has 52,080 employees. The company is mostly active in the field of cosmetics, but also in the dermatological and pharmaceutical fields.

L'Oreal's target markets are: mass market, professional, luxury, and active. The mass market products include brands like L'Oreal Paris, Garnier, Maybelline New York and SoftSheen-Carson, while the luxury market products include prestigious brands like the Body Shop, Cacharel, Giorgio Armani Perfumes and Cosmetics, and many others.

Each of these target markets correspond to different target customers. The target customers for the mass market products are women between 25-45 years of age, with medium to increased incomes, from urban areas. These customers are searching for quality products that also offer an equitable price level, in accordance with the quality they provide.

The target customers for L'Oreal's professional products are represented by professional make-up artists that work in this field.

The luxury products' target customers are sophisticated women between 25-45 years of age, with high incomes, and a high social status, who purchase L'Oreal products for the quality they provide, for the company's tradition, for the status that these luxury products offer. When buying these luxury products, the customers do not only buy the product itself, its physical properties, but also the luxury status that comes with its high price, tradition, and quality. The customers are buying… [END OF PREVIEW] . . . READ MORE

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