Management Essay

2565 Words Oct 18th, 2012 11 Pages
L'Oreal

Abstract
The report analyses how the world's largest beauty company, L'Oréal, has expanded globally both by acquisition of the existing companies and by developing its own brands. It discusses the role of acquisition in L'Oréal's growth, as well as L'Oréal's global strategies by how the company offers its worldwide consumers the American and French beauty. It also discusses the recent acquisition of Kiehl's; its role and contribution to L'Oréal as well as the opportunity given to the brand by joining L'Oréal.
When people walk into a cosmetics isle in stores, it is hard to miss L'Oréal products; they are everywhere from a small, locally owned beauty salon to the retail giant, Wal-Mart. It is not just in the United States. The
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These new products pushed the company to the recognition of its high quality products in the European market, and L'Oréal successfully established itself as the leader in hair-coloring and body-care products in Europe (Jones et al., 2006, p. 3).
After leading the European market for over 15 years, L'Oréal entered the U.S. market soon after World War II; however, the company soon realized that the US market was nothing like the European markets. For example, the U.S. market required local middlemen whereas the European markets preferred national distributors. Also, L'Oréal managers discovered that the high-end image of the leading company did not help sell its products in the U.S. market. However, L'Oréal overcame these challenges by acquiring existing, national or international companies and brands (Jones et al., 2006, p. 3). L'Oréal's success cannot be told without the several successful acquisitions. Francois Dalle ,who was the founder Schueller's right-hand, succeeded the company's leadership in 1957 after Schueller passed away, and was the first person to initiate the concept of multiple channels of distribution for the beauty selling business. He categorized beauty products into four distribution channels: self-service, professional advice from hair specialists, trained beauty advisors, and medically trained advisors (Jones et al., 2006, p. 3). Theses four distribution channels led the company to today's L'Oréal with

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