L’Oreal SWOT & PESTLE Analysis
COMPANY PROFILE -L'Oréal
Business Sector :FMCG, Personal Care
Operating Geography :Europe, France, Global
About L'Oréal :
L'Oréal, founded in 1909, is a French cosmetics company, with a varied portfolio, catering to different segments of the market. The Company is headquartered in Clichy, Hauts-de-Seine with a registered office in Paris and has over 88,000 employees as of January 2020.L'Oréal’s mission statement as per their annual report is to “Beauty for All - Offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety to satisfy all their desires and all their beauty needs in their infinite diversity.”
L'Oréal Revenue :
€ 29.87 billion - FY ending 31st December 2019 (y-o-y growth of 10.91%)
€ 26.93 billion - FY ending 31st December 2018
Competitive Analysis of L'Oréal
1. Strong research & development 2. Universalisation – The Development Strategy 3. Quality and safety 4. Serves diverse markets & is a market leader | 1. Multiple acquisitions 2. Dependence on supplier |
1. New markets in Africa and Middle East 2. Travel retail 3. Products for fast growing BRIC country markets | 1. Competition from both ends 2. Emergence of new business models 3. Recessionary trends and restrained consumer spending 4. Seasonal business |
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Detailed SWOT Analysis of L'Oréal
Strength
1. Strong Research & Development: L'Oréal has around four thousand researchers and a budget equivalent to 3.3% of sales for research and development. The R&D expenses for 2019 were €985 million and they have constantly risen over the years. The cosmetics industry faces a lot of competition and L’Oreal focuses on success and growth through innovation. The Company has also made advances in cellular engineering and micro fluids which will enable it to use this in its products in future. The company also collaborated with cloud data integration company, Talend, to transform its research and innovation (R&I) unit into a value-added service by leveraging its data lake to create advanced cosmetic products.
2. Universalisation - The Development Strategy: The Universalisation strategy of The Company focuses on globalization that respects differences. Through this strategy The Company can modify their offerings to suit the consumer’s demands in various parts of the world. They study the specifics of consumer’s requirements and adapt their products to the lifestyles of different consumers. The Company has research centres in the United States, Japan, China, Brazil and India. The data from these areas enable The Company to develop products as per the consumer aspirations.
3. Quality and Safety: The cosmetics industry has to comply with safety requirements and legislation. The Worldwide Safety Evaluation organisation evaluates the safety of raw materials and finished products from the industry. L’Oreal monitors the adverse effects that may arise once the product is on the market through its “cosmeto-vigilance network”. This network compiles, validates and analyses any adverse effects related to use of a product based on rigorous, proven methodologies, allowing the appropriate corrective measures to be taken where necessary.
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Weakness
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Opportunity
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Threat
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References used in L'Oréal Analysis Report
2. L’Oreal news https://www.loreal.com/news
3. L'Oreal's Professional Segment Might Be Further Strengthened By Its Acquisition Of Raylon - https://www.forbes.com/sites/greatspeculations/2016/01/08/loreals-professional-segment-might-be-further-strengthened-by-its-acquisition-of-raylon/#7125dec17133
4. L'Oreal to launch new hair care range - https://economictimes.indiatimes.com/industry/cons-products/fmcg/loreal-to-launch-new-hair-care-range/articleshow/52765027.cms
5. Deloitte 2015 Consumer Products Industry Outlook https://www2.deloitte.com/us/en/pages/consumer-business/articles/2015-consumer-products-outlook.html
The detailed set of references are available on request in the 'Complete report' on purchase.
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L’Oreal SWOT & PESTLE Analysis - SWOT & PESTLE.COM
SWOT & PESTLE.com (2021). L’Oreal SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/loreal/ [Accessed 25 Feb, 2021].
In-text: (SWOT & PESTLE.com, 2021)
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L’Oreal SWOT and PESTLE analysis has been conducted by Merlyn Pereira and reviewed by senior analysts from Barakaat Consulting.
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