L'Oreal Swot Essay

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L'Oreal S.A. SWOT Analysis SWOT ANALYSIS L'Oreal is one of the leading manufacturers of cosmetics, skin care, fragrances and personal care products in the world. L'Oreal has strong brand portfolio. A portfolio of strong brands besides resulting in steady revenues and profits provides a competitive advantage in the market place. However, the global cosmetics business is intensely competitive, with a few big corporations and a large number of small companies vying for market share. Increased competition may result in price reductions, reduced profit margins and loss of market share. Strengths Strong brand portfolio Diversified geographic presence Strong R&D capability Opportunities Demographic trends in the US Cosmetics market in emerging nations Acquisition and alliances Weaknesses Weak performance in North America Slow revenue growth Threats Growing popularity of cosmetic surgery Intense competition Counterfeiting Strengths Strong brands L'Oreal has a strong brand portfolio. Its brand lineup includes Body Shop, Garnier, Maybelline, Kerastase and Redken, all of which are recognized globally. L'Oreal has built a portfolio of strong brands through heavy advertising expenditure over the years. In fiscal year 2006, the company spent E4,569.1 million on advertising and promotion, which accounts for about 28.9% of sales. In fiscal year 2005, advertising and promotional expenditure as a percentage of sales was equally high at 30.1%. Cosmetics are a business where brand positioning makes a difference. A portfolio of strong brands besides resulting in steady revenues and profits provides a competitive advantage in the market place. Diversified geographic presence L'Oreal has a diversified geographic presence. The company, currently has operations in over 130 countries across five continents. In fiscal year 2006, revenues from Western Europe accounted for 46.6% of

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