L'Oreal's Global Branding Strategy

            
 
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Case Details:

Case Code : MKTA020
Case Length : 14 Pages
Period : -
Pub Date : 2005
Teaching Note :Not Available
Organization : -
Industry : -
Countries : -

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts Contd...

Corporate Structure

L'Oreal was organized as a clutch of small profit centers, some with as few as ten employees. The company's work culture encouraged audits and budget meetings to focus less on the spilled milk of the past, and more on leading indicators of how things would look at year-end.

These meetings encouraged discussions to find out which overlooked products showed signs of life but were undercapitalized and which products were not matching expectations and needed pruning. The structure allowed L'Oreal to move fast...

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Competition

L'Oreal faced competition from various formidable rivals. On one side, cosmetic majors like Revlon and Avon and Nivea vied for shelf space. On the other, there were the giant FMCG companies like Unilever and P&G. There were also local competitors like HLL-Lakme in India, Dark and Lovely in Africa, and the erstwhile Shu Umera in Japan (L'Oreal later acquired this brand)...

Future Outlook

As Owen-Jones raced to expand international sales, he realized the need to ensure that his brands did not confuse consumers, leading to brand cannibalization. Owen-Jones also faced uncertainty surrounding the company's future. Bettencourt, 79, had indicated she did not want the arrangement with Nestle to change in her lifetime. Nestle had promised to respect her wishes. But after her death, it was not clear whether Nestle would be as compliant with her only child, Francoise. Nestle had about $13 billion tied up in L'Oreal, and with 26% of its shares, it could launch a takeover bid...

Exhibits

Exhibits I: Key Numbers
Exhibits II: Sales and Net Income
Exhibits III: L'Oreal Makeup
Exhibits IV: Sales Growth by Operational Division and Geographic Zone was as Follows


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