Lāoreal Company Analysis
Lāoreal Company Analysis
One of the biggest names in the make-up industry is LŠ²Šā¢Oreal. LŠ²Šā¢Oreal runs a massive worldwide operation employing nearly 62,000 men and women of various races, backgrounds and religions across nearly 60 countries. Part of the reason for the corporationŠ²Šā¢s success has been its sensitivity not only to its consumers but also to each and every one of its employees. The corporation has made sure that all their employees have opportunities to develop themselves both personally and professionally. This commitment by the corporation to take care of their own employees has resulted in LŠ²Šā¢Oreal being rated by the European business school students as The Employer of Choice for the year 2006 (LŠ²Šā¢Oreal Corporation, n.d.).
With over a century of experience in the cosmetics industry, LŠ²Šā¢Oreal has established 19 global brands and produces them in 40 factories across the world. These factories are all state of the art and ISO 140001 certified and all of their industrial sites are audited with the standard SA 8000 (LŠ²Šā¢Oreal Corporation, n.d.). The corporation makes sure that every product that rolls out from their factories complies with their own high standards and meet or exceed quality and safety standards set by local governmental agencies such as the Food & Drug Administration of the United States of America.
LŠ²Šā¢OrealŠ²Šā¢s success in the cosmetic industry is due not only to their high quality, but also to the corporationŠ²Šā¢s marketing efforts to make sure their various brands have a strong market presence. There are generally five categories for LŠ²Šā¢OrealŠ²Šā¢s products. Beginning with the Consumer product line, these products are normally sold thru mass-market retail stores. These are competitively priced and are marketed under brands such as LŠ²Šā¢Oreal Paris, Maybelline New York and Garnier. LŠ²Šā¢OrealŠ²Šā¢s Professional Products are made to meet the high requirements of customers such as beauty salons, stylists and hairdressers. These are marketed under the brands such as LŠ²Šā¢Oreal Professional, Mizani and Redken 5th Avenue New York. LŠ²Šā¢OrealŠ²Šā¢s Luxury Products line is composed of well-known brands such as Lancome, Giorgio Armani, Ralph Lauren and Diesel. These are the prestigious brands that are sold in specialty stores, high-end retail stores and in travel retail outlets. The Active Cosmetics line of LŠ²Šā¢Oreal are composed of pharmaceutical products sold in pharmacies and specialist retail stores. In general, these are dermatological products to improve, cure or prevent skin disorders. The last category of LŠ²Šā¢OrealŠ²Šā¢s products is The Body Shop. The beauty products sold in all the body shop stores are made from natural ingredients. This product line caters to the individuals who are environmentally conscious (LŠ²Šā¢Oreal Corporation, n.d.).
SWOT Analysis
Strengths
As on of the biggest names in the beauty industry, LŠ²Šā¢Oreal demonstrates its strengths in various ways. The investment of spending of LŠ²Šā¢Oreal can be used to analyze the company. With over 533 million euros invested in research and development in 2006, LŠ²Šā¢OrealŠ²Šā¢s products are continuously improved on and future products are created, tested and perfected. 4,783 million euros spent on advertising and promotions created strong market awareness for the corporationŠ²Šā¢s products. There is also strength that could be observed in the cultural diversity of LŠ²Šā¢Oreal. The corporationŠ²Šā¢s belief in diversity is a recognized to be a key factor in its success. There are 112 different nationalities in the managerial staff positions alone. LŠ²Šā¢Oreal makes sure that on every level in the corporation, their teams are well diversified so that creativity and sensitivity to consumer needs and wants are increased (LŠ²Šā¢Oreal Corporation, n.d.).
Weaknesses
There may be some notable weaknesses for LŠ²Šā¢Oreal. This would involve the sales outside of Western Europe and North America. Although very successful the world over, LŠ²Šā¢OrealŠ²Šā¢s sales outside of North America and Western Europe make up less than 30% of their total sales. Marketing of the products in the areas outside of North America and Western Europe are not as strong and are reflected in the sales percentages. Furthermore, there are also other notable weaknesses applicable to LŠ²Šā¢Oreal. Another weakness point is the existence of false claims in advertising. In May of 2007, LŠ²Šā¢Oreal was ordered by the Therapeutic Goods Administration of Australia to retract their claims on the wrinkle removing capabilities of their products (Anti Aging Wrinkle Creams are a Rip Off).
Opportunities
One of the areas of opportunity for