Lòreal Case Essay

437 Words2 Pages
How did L’Oreal become the world’s leading beauty company? What was the role of acquisitions in the growth? Eugene Schuller started his company by creating basic hair color products. Five years later his products were present in Austria, Netherlands and Italy. After this achievement of selling your products in four different countries, Eugene managed to rank his company in the top of body and hair colouring market through his innovation, the first sopaless shampoo that had as target the mass market. They realised that in order to stay in the top of this beauty hierarchy they should constantly invest and acquire other small companies even though as Owen-Johns said, acquisitions have never been the top priority for this company but internal growth rate. By rebranding their image, adding to L’Oreal’s portfolio small influential companies. A Cost Leadership Strategy(Mini MBA 15-Generic Strategies) justifies L’Oreal’s purchases like: Garnier, Maybelline, Matrix, Lancôme and so on. The emphasis was placed on minimizing costs therefore applying a full market coverage(Mini MBA 18- Target Market Selection). This type of strategy was adopted during the rebranding of Maybelline. They were aware of the valuable potential Maybelline had, therefore together with the R&D they managed to change the way this company was being seen by the population, achieving a complete new consumer target by changing marketing schemes. L’Oreal adopted two different strategies for its products. A Differentiation Strategy(Mini MBA 15-Generic Strategies) together with a selective specialization(Mini MBA 18- Target Market Selection) as a market strategies, explains the major interest in buying Khiel`s, a specialty store that provides high end cosmetics, therefore facilitating L’Oreal’s penetration into this market of luxury division. Of course together with Khiel`s we could mention as well

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