Index IntroductionStrategic AnalysisStrategic DirectionCorporate StrategyComparative AdvantageCorporate StrategyIntroductionL'Oreal is one of the largest leading cosmetics and beauty brands in the world. The strategies followed by this company have allowed it to remain in first place among its competitors. This multinational cosmetic company invests, innovates in varieties of products and also markets them using its strategies to increase its consumer base. The main investment for L'Oreal is in CSR (Corporate Social Responsibility) strategies, with which it aims to increase its customer base to a whopping 2 billion by 2020. This can be achieved by identifying and analyzing the company's business units through high growth prospects and analyzing the various strategies that have been implemented to achieve them. Studying L'Oreal's journey over the years, the brand's image remains within a portfolio that has become its main driver of development. This has clearly become the company's competitive advantage. L'Oreal is a high-turnover company that uses its profits to invest in its research and development department to motivate innovation. It also uses its capital to produce a large number of units based on demand. Horizontal integration, vertical integration and strategic alliances help L'Oreal establish its presence across the world. In this report we critically analyze strategic capability, strategy formulation and implementation with reference to theories arising from strategic business management concepts. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Strategic Analysis Overall Environment and Trend: Pestle analysis is performed to identify the various different forces of L'Oreal's macro environment. Political and Legal Forces: Laws and the government issues regulations related to the recruitment of professionals from various multiracial countries at L'Oreal (Hae-Jung, 2013). L'Oreal products are subject to FDA (Food and Drug Administration) approval. The FDA makes sure that L'Oreal products do not directly or indirectly harm the consumer. The regulation also requires L'Oreal to list the ingredients used in the preparation on the product label. Economic Forces: Since L'Oreal is headquartered in Paris, France. It has consistently contributed to the increase in GDP since the year 2016. Furthermore, the country experiences a constant increase in population, which means that there is also a constant increase in the number of consumers in the country. Social forces: Consumers are becoming more and more concerned about their health, which is why they prefer more organic products that do not harm their skin. This has become a major concern for this cosmetics brand. Technological Forces: Convergence solutions (meaning a hybrid cosmetic solution composed of medical chemicals and other technology) and biotechnology are now becoming the latest technological trend for L'Oreal as Korean cosmetics. brands have already adapted this technique to their brands. Environmental Forces: When it comes to environmental forces, demographics play a significant role in influencing the company's capabilities. In recent years it has been observed that concern about women's beauty has shifted towards men as men place more importance on personal appearance than women. Specific environment L'Oreal is developing a new advanced tool capable of providing a complete layout of information regardingown products, to ensure that consumers independently study their own cosmetic consumption choices. L'Oreal's supply chain has impacted various stakeholders across the value chain who may impact the environment. The R&D department did research and came up with a model known as SPOT (Sustainable Product Optimization Tool). This model allows the company to test various designs of its new products that could have an impact on the environment and society. It makes the extent of the impact a tangible entity, thus helping to minimize the effects caused by the products in various areas such as packaging, the formulation of both renewable and non-renewable chemical ingredients and the social benefit of the product. In 2017, all L'Oreal products were analyzed using this tool before being released to the market. Competitors and Internal Analysis As one of the leading cosmetics brands, L'Oreal faces competition from various other brands. The summary of the company's competitors and their details are given below. L'Oreal adopts the differentiation strategy to keep up with its competitors, as they have a larger target market, their product divisions are mostly in the following diversified markets such as: New Multicultural Product Diversification New Market Development Strategic DirectionStrategy corporateIn this section, strategies will be studied on how Loreal creates their competitive advantage and allows them to stay ahead of their competitors. To further break down Loreal's competitive advantage, there are two other main types of advantages that companies can have. These are comparative and differential advantages.Comparative AdvantageImpression about L'Oreal's Unique Strategy Universalization Strategy He is convinced that there will be no one and only beauty model at L'Oreal. However, it is an infinite diversity that changes depending on times, cultures, stories, individuals, etc. The definition of L'Oreal's strategy is “Universalization means globalization that respects differences. The differences concern desires, needs, tradition." They believe that product innovation should meet cultural expectations, has managed to adapt to specific cultural differences in the beauty market around the world. L'Oreal currently has six research and development centers around the world, two in France, one in the United States and another in Japan. In 2005, L'Oreal opened a research and development center in Shanghai, China, and the final headquarters is in India. Low Cost or Differentiation Competitive Advantage Strategy L'Oréal uses a hybrid differentiation strategy. It focuses on decreasing costs and consequently the ability to decrease price when necessary while increasing perceived value. Thanks to the combination of large available capital and high technical capabilities, L'Oréal has access to the resources to produce at scale, while leveraging its strong research and development department to drive innovation. The ability to optimize the use of resources by promoting high productivity and L'Oréal's effective production and distribution process across a wide range of channels offer a favorable scenario for reducing costs. Meanwhile, L'Oréal's actions aimed at creating an emotional connection with its consumers instead of just highlighting its products clearly shows the company's differentiation strategy. Throughout the consolidation process, the company has always paid attention to building a strong branding strategy, being widely recognized and appreciated. maintaining strong loyalty frompart of its customers. L'Oréal's marketing strategies have always been focused on bringing customers the benefits and reliability of all products and ensuring that the perception of superior quality is stronger than that of any other competitor. The combination of these strategies and the small adjustments made from time to time, over the years, have led L'Oréal to become a leader and reference in the beauty market. Corporate Strategy Expansion through acquisitions L'Oréal's growth strategy has been pursued both through internal development and through acquisitions of companies already operating in the cosmetics sector. Notably, external growth through acquisitions is part of L'Oreal's long-term strategy, with a long-term annual growth target of 10%. This option was also facilitated by the group's liquidity and low debts. Buying more allows the group to reach the critical size necessary to exploit economies of scale both in research and development activities and in marketing and distribution. The acquisitions also favor L'Oreal to rapidly expand its geographic horizon and develop its market segments. The current portfolio of 25 prestigious brands is the result of a series of acquisitions that began many years ago. Global Strategy L'oreal is a global company that spans the globe. The French cosmetics company (SFTIC) founded more than 100 years ago, has developed into a multinational company with 140 companies and regions with more than 88,900 employees. Its global product portfolio is represented by 32 global brands, which control 19.9% ​​of the global cosmetics market. They have a very well-known and reliable image because they have been around for a long time as a quality brand. They also have a professional sector (Keratase, Redkin, L'Oréal Professional) used and appreciated worldwide in high-end salons. L'Oréal Laboratories have developed revolutionary innovations such as the first soap-free shampoo, the first rapid lightening agent, first highlighting enhanced shampoo, the first hair color without ammonia or artificial skin called Episkin. With the slogan "Because we're worth it", they spread the message "beauty for all" to appeal to a wide range of consumers regardless of their ethnicity, gender and age. L'Oreal has chosen a unique strategy: popularity. This means capturing, understanding and respecting the globalization of differences. The difference lies in the desire, demand and traditional order to provide customized beauty and satisfy the desires of consumers around the world. Business Strategy The detailed action of business-level strategies is to provide value to customers and gain competitive advantage by leveraging core competencies in specific, individual product or service markets. In other words, firm-level strategy aims to create differences between the firm's position and rivalries in an industry. To locate position, firms must decide whether to do business differently or perform different activities than rivals. In enterprise-level strategy, there are two types of competitive advantage, one of which is lower cost, the other is uniqueness (or differentiation). Businesses should compare which type of competitive advantage would create the most value. Before doing so, it is necessary to define in which competitive environment companies want to choose to compete, a broad market or a narrow market. The final step of business strategy is to decide on generic company-wide strategies. There are five generic strategies, as illustrated in Figure 1. At L'Oréal, it is obvious to see that differentiation is the strategy of choice over the course of a century, whatever.