LOREAL strategy case study

Global Strategies

L'Oreal Case Study

By: Archana Priyanka María

How can a firm globalize?

Management of large difficulties that arise at different locations

Arbitration

Aggregation

Adaptation

Cross-Border

International Specialization

• Standardized a product
• Regional or global operations

• Supply / Demand orientated
• Supply chain in difficult places

Country-Centered

• Maximize relevance
• Local units adapting to the market

have a global brand concept with local specifications products

Strategy

L'Oreal (2023)

Sales and Marketing Strategy according to the country

Adaptation

L’oreal Paris – flagship brand – world positioned in – supermarkets and discount cosmetic stores Departmental stores in china – which made it as the premium products in China which is different from the global strategy Marketing was done by locals to reach the local market.

Mininurse – 2003 – Mass Market segment Yui-sai – 2004 – Luxury Segment Magic – 2014 – Facial masks

R&D and Manufacturing Plants

China's aquisitions

5 R&D Hubs in Shanghai to make research on Asian skin and hair 2 plants in China - Suzhou Plant - Tianmei Plant

Global Integration

Aggregation

• Global consistency in product quality and brand image while adapting to local markets.
• Reputation and identity preservation.
• Reduced production costs and inventory complexities.

Challenges Faced by Yue-Sai

Local Competition

Positioning and Profitability

Limitations International Expansion

International Expansion

Challenges Illustrated by Yue-Sai

Global Marketing Strategy

• Centralized marketing strategy.
• Local teams implement local marketing initiatives.
• Supervised branding and packaging consistency.
• Simultaneous product promotion in multiple markets.

Leveraging Shared Resources

• Joint global product efficient development by investment in R&D and Marketing.
• Localization and modification at the local level.
• Accelerated new product introduction by global distribution channels expansion (e-commerce and travel retail).

China's Challenges

Improve Economies of scale

Arbitrage

By consolidating production in a few key locations, L'Oréal can take advantage of economies of scale and reduce operational and marketing costs.

Price and Currency Management

Competitive pricing to consumers thanks to lower labor and operational costs Standards while also aligning with global quality and safety benchmarks

This involves balancing product customization with the need for cost-effective operations and be accessible to a broader audience

Market-Specific Product Customization

Create region-specific product variants to address unique cultural, climate, and skin/hair type requirements

China's Leverage

Brand Flexibility

Capitalizing on global insights while adapting to local undertones.

Thank you

BIBLIOGRAPHY

• L'OREAL (2023), L'Oréal Groupe, Facebook, available in https://www.facebook.com/lorealgroupe/?brand_redir=367270916803106 (Online), accessed on November 9, 2023
• Dussauge, P. & Lugagne, N. (2016). L’Oréal: Attracting the Next Billion Consumers (minicase). The Case Centre, Reference no. 316-0113-1
• Ghemawat, P. (2007). Managing Differences: The Central Challenge of Global Strategy. Harvard Business Review, 85(3), 58-68.