International Business Strategy Assignment Proposal

Company: LOreal in India Brief introduction: The L'Oral Group is the world's largest cosmetics and beauty company with
over 130

countries with 66,600 employees world-wide. This company is originally established at

Paris, France. It has developed activities in the field of cosmetics and the main focus of this company is on hair colour, skin care, sun protection, make-up, perfumes and hair care. Furthermore, the company is active in the dermatological and pharmaceutical fields and is the top nanotechnology patent-holder in the United States. Issues: 1. Strategies The company has been present in India for close to 20 years and in 2009 celebrated its global centenary. Today, LOral India is one of LOrals fastest growing subsidiaries and employs over 1000 people across six sites including: four regional offices, a factory in Chakan, Pune and its headquarters in Mumbai. As suggested by Shepherd (1998), the value chain and value network concepts can be helpful in understanding how value is created or lost in terms of activities undertaken by organization. 2. Industries LOrals leadership is achieved through cutting-edge technology with a portfolio of wellknown brands that answer all beauty needs and are distributed in all channels. Each brand benefits from considerable investments in research made by the L'Oral Group. The Group's research efforts, unique in the beauty industry, permit each brand to benefit from

formulas specifically adapted to the needs of men and women worldwide, within each market or distribution circuit that is present. Besides, L'Oral brands are divided into four main categories, i.e. consumer products, professional product, luxury product, and active cosmetics. Institutions According to Dess, Lumpkin, and Eisner (2010), the advantages of a strong ethicaloriented company can have a positive effect on employee commitment and also strengthen its bonds among its suppliers, customers, and governmental agencies. In other words, an ethical company could gain positive and constructive relationship among individuals, it is vital in leveraging human capital and other resources in an organization. Advertisement is playing the major role in LOreals marketing strategy and it has helped the company achieve a very good result in sales. However, its advertisement has also received a critical feedback from public saying that its contents are too aesthetic and overuse of pretty women or celebrity endorsement until distort the mind of consumers toward beauty. Secondly is followed by its animal testing issue. Animal testing is found existence in the company and thus get boycotted from the public. 3. Conclusion After doing the research of LOreal, few aspects of marketing strategy has been identified. First of all is the differentiation strategy that is able for a company to narrow down the need and preference of a target group. Besides, studying Porters Diamond theory for determining factors of national advantage is also rather important especially home base provides basic factors, which support or hinder organizations from building advantages in

global competition. Finally, ethical issue is inevitable for any organization as it has the power either to build or destroy a company. If a company is able to practice ethical culture within its operation, it will gain additional benefit from public.

List of reference:
Dess, G.G., Lumpkin, G.T., and Eisner, A.B., 2010. Strategic management: text and cases. 5th ed. US: McGraw-Hill. Ethical Consumer, 2006. LOreal to take over Body Shop. [online] Available at: < http://www.ethicalconsumer.org/mediainfo/lorealandthebodyshop.aspx> [Accessed 20 April 2012]. Shepherd, A., 1998. Understanding and using value chain analysis. US: Prentice Hall.