Since its creation almost a century ago by the French chemist Eugene Schueller, L'Oreal has always been at the forefront particularly on the sectors of of dermatology, pharmacology and cosmetics. The group has implemented its know-how and expertise to emerge as the leader in cosmetic business on a global scale.
Its ambition is to be able "to respond to the quest for beauty and well-being of women and men around the world." For this, L'Oreal has started investing in research to ensure the quality, safety and innovation of its products.
The group's success undoubtedly springs from the never ending search for new market segments that are likely to grow rapidly. The group is now present in over 130 countries and has over 290 subsidiaries across the globe.
In possession of 17 internationally recognized brands, the group has reorganized its portfolio continuously. Thus, the combination of a global strategy associated with a slew of mergers, acquisitions, purchases, and alliances lead to an ongoing review of its overall strategy to manage better both its brands and also its continuing conquest of new markets.
We shall first present the group with its international dimension and then examine its expanding presence particularly in China.
In 2005, the L'Oreal group recorded a net profit of 1.972 billion euros, with 37% growth compared to the previous year. The group announced a growth of over 10% of its profits. Apparently, the year 2005 represented the strongest growth in figures. According to Mr. Owen Jones, the CEO of the group: "The market has improved significantly. L'Oreal has once again achieved high growth compared to the global market."
The group has performed well in North America and the new openings in emerging markets have indeed contributed well to the growth. The increase in the turnover associated with rigorous cost control has made it possible to improve profitability and to grow at double-digit figures.
The result of 2005 was mainly due to the significant growth experienced by the cosmetics industry. For L 'Oreal, it involves three main factors: the increase in sales (North America), the spectacular opening of the Asian markets and the uniformity of the margins between the various geographical areas.
Thus, for over a century, the group has undergone profound changes and considerable growth. The current status:
•2005 revenue: 14.53 billion euros (+6.5%)
•2004 turnover abroad: 12.06 billion euros
•Workforce: 52,081 employees, including 2,979 in research and cosmetic dermatology
•13 international research centers
•Partnership with 178 high schools and universities in the world
•Presence in over 130 countries
•More than 40 factories worldwide
•More than 290 subsidiaries worldwide
•17 brands
•An investment of 3% of revenue in research and innovation each year (21,000 patent extensions in 2004)
L'Oreal's "Research and Innovation" represents the principal activity of the group. It constantly creates new products, meeting both current and future needs of existing and potential consumers, particularly those of emerging countries.
[...] The expansion of L'Oreal in China is very impressive and significant: in just a few years (before acquisitions), its products are available in more than 500 sales outlets against a dozen in the beginning. Brands such as Lancome and Maybelline NY became leaders within a short period in their respective market segments. In order to gain market shares, L'Oreal lowered the prices of its products and bought two popular Chinese brands: Mininurse (formerly Xiaohushi) and Yue Sai. These two brands controlled a significant market share in the country. [...]
[...] brands and also its continuing conquest of new markets. We shall first present the group with its international dimension and then examine its expanding presence particularly in China . I. The international approach of L'Oreal A brief history of the L'oreal group: 1907: Eugene Schueller, a French chemist, created a formula called the " Aureole " for dyeing hair, 1909: He registered his company as "French Society for safe hair dyes " 1920: L'Oreal group employed three chemists 1912: The group exported its products to Holland, Italy and Austria. [...]
[...] China became the fourth country after France, United States and Japan to be equipped with research and development of its own. The group currently has a dozen research and development centers worldwide. L'Oreal is relying on the center in China to develop its products which are more suited to the local Chinese consumers. According to surveys done on the Chinese, the lure of international brands is growing. For the Chinese, it's good to be updated and modern, It is basically "drink Coca Cola, eat at McDonald's, shop in a supermarket." More generally, the products of foreign origin have a very good image in China. [...]
[...] Over the past ten years, L'Oreal, in the cosmetics sector, has grown much larger than its competitors, with the help of new markets and its highly efficient research and innovation department, which continuously creates and develops new substances and new products Research and Innovation: At the forefront of technological development In 2005, L'Oreal had nearly 3,000 employees of which were women) of 62 different nationalities, working in 13 research and evaluation centers around the world to design nearly 4000 new products annually for different domains of cosmetics: hygiene, skin care and sun, makeup, hair care, coloring, styling, perfumes etc. [...]
[...] A sophisticated computer network has been established to facilitate ongoing communication between various centers, which is essential when a new molecule has been discovered Communication policy The tagline of the brand is "innovation and communication," L'OREAL relies heavily on its advertising campaigns to build a better reputation and devotes much of its turnover to this activity. L'Oreal Paris is a signature brand ,international, with no real equivalent in the field of beauty, with a strong multicultural dimension and at the same time retains its French roots right from elegance, charm to modernity. [...]
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