L’Oreal is one of the most famous brands of cosmetics in the world. It was established by Eugene Schueller in 1909 in France and since then evolved to be an international company with a presence in 150 countries (L’Oreal Finance, 2020). Also, the company has six research and development centers that are located around the world, with two being in France, two in the U.S., and one in Japan and China. Currently, one of the company’s central priorities is sustainable development (Withisuphakorn et al., 2019). That includes the fight against climate change and progress towards cruelty-free production.
L’Oreal’s product line can be divided into four categories, namely L’Oreal Luxe (which encompasses such brands as Lancome, Biotherm, and Prada), consumer products (Garnier and Maybelline), active cosmetics (Vichy and CeraVe), and professional products (Matrix). Such commodity diversification allows the company to target various groups of customers. For instance, from the perspective of customer segmentation by income L’Oreal offers numerous alternatives both for people from the upper and middle classes.
Consumers can find the products of the brand almost everywhere in big cities. For instance, it can be stored that sells beauty products, pharmacies, supermarkets, minimarkets, and hair salons. Additionally, the company is actively engaged in online sales through its own and partner websites. In this regard, Dua (2020) claims that since the beginning of the COVID-19 pandemic, L’oreal’s e-commerce has grown approximately 65%, accounting for 25% of total revenue. Therefore, it is seen that the brand successfully uses various types of sales.
In order to be effective in global operations and online sales, L’oreal put tremendous efforts into supply chain development. As a result, in 2015, the company was ranked as the European top five supply chain (L’Oreal Finance, n.d.). Such success is achieved due to several reasons. Firstly, L’Oreal owns approximately 150 distribution centers. Moreover, constant technological and process innovation helps to increase the speed and precision of all the procedures. Finally, the collaboration between different departments allows making relatively precise forecasts concerning future demand.
Although the company is the top seller in the cosmetics industry, there are still some things that can be improved. For instance, many customers are concerned with the fact that L’Oreal’s are very slow in implementing policies related to animal tests prohibition. Also, another weakness of the company that should be addressed is its huge bureaucratic structure that leads to slower adaptation to the current market conditions.
References
Dua, T. (2020). L’Oréal is banking on influencers and try-on technology to cash in on online sales — and it’s made up for half its pandemic losses. Business Insider.
L’Oreal Finance. (2020).L’Oreal worldwide.
L’Oreal Finance. (n.d.). Improving supply chain efficiency.
Withisuphakorn, P., Batra, I., Parameswar, N., & Dhir, S. (2019). Sustainable development in practice: Case study of L’Oréal.Journal of Business and Retail Management Research, 13, 35-47.