Thinks of cosmetics & hair color, and ‘L'Oréal Paris’is the brand which first stuck into our mind.L’Oreal is an international leader in the beauty industry whose self-proclaimed mission is to ‘invent beauty’ and offer everyone access to the best of cosmetics in terms of quality, efficacy and safety. The world’s largest cosmetics and Beauty Company was founded in 1909. The company is always recognized for cosmetology and dermatology research.

The group company was formed with the unique invention of the hair dye formula,which doesn’t damage the hair, by EugèneSchueller. The French company headquartered in Clichy, Hauts-de-Seine and has a registered office in Paris. Currently Jean-Paul Agon is chairman & CEO of L’Oreal .Loreal’s each business unit is autonomous and operates with a different business model and with its own specific profitability logic.

Key figures

In 2014, Loreal alone had a brand value of US$ 10,766, with which it globally ranked first as most valuable cosmetic brand. They registered 624 patents in 2013. Theycurrently hold 35,000 patents and spend almost twice the industry standard on research & development. In 2014, they accounted for an operating profit of €3.89 billion against sales of €22.54 billion. The operating profit grown 3.5% as compared to previous fiscal year and stands out for 17.3% of the current sales.L'Oréalis operating in 130 countries in the world.

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Different line of Brands

L'Oréal is the only cosmetics company in the world to own more than one brand franchise and have a presence in all the distribution channels of the industry. They have over 500 productsout of which 28 are international brands. Their brands concentrate on hair color, skin color, sun protection, makeup, perfumes and hair color. The Brands are generally categorized by their targeted markets, such as the mass, professional, luxury, and active cosmetics markets. The Body Shop and Galderma are directly attached to the head office. Inspite of having extensive brands under one group these all brands are unique in their own way. They acquired many brands as their strategic move to conquer different markets worldwide, but always retained the originality of the acquired brand.

Consumer Products DivisionThe Consumer Products Division offers the best cosmetics at an affordable price. Its brandsare available in mass-market channels(hypermarkets, supermarkets, drugstoresand traditional stores). The division is the spearheadof the group’s quest to win over a further billion consumers.

L’Oreal LuxeThis division provides an array of prestigiousand modern international brands witha unique heritage. The brands of L’Oréal Luxestrive to promote the different specialtiesof luxury beauty: skincare, make-up and fragrances.They also set out to offer high-quality productsthrough a selective distribution channel,and provide excellent service that respectsthe diversity of its consumers.

Professional Products Division The Professional Products Division are available specially for beauty salons. With the help of these range of products, consumerscan take advantage of the highest standards of quality and expertise from beauty salon professionals all over the world.

Active Consumer DivisionThe Active Cosmetics Divisionsare meant to improve the quality and health of the skin, whether they are affected by sensitive skin or dermatological conditions. They are available in all healthcare channels worldwide, including pharmacies, drugstores and medi-spas. Due to its highly complementary brands and its close links with health professionals, dermatologists, pediatricians and doctors practicing aesthetic medicine, the division is world No.1 in dermocosmetics.

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L’Oréal Paris Garnier Maybelline New York Softsheen Carson

Lancome Giorgio Armani Kiehl’s Diesel Paloma

L’OréalProfessionnel Kérastase Redken MatrixMizaniPureology

Vichy La Roche-Posay SkinCeuticals Roger &GalletSanoflore

Strategic Acquisitions& Agreements

Giorgio Armani: In the early 1980s the Giorgio Armani signed an important agreement with L'Oréal to create perfumes.

Maybelline:Loreal group acquired Maybelline in 1996 for $758 million. It was one of the first brands that the group bought as their strategic move to gains a greater presence in American mass market. Lorealretained Maybellin’s American image and also helped the brand to expand globally.

The Body Shop:The Company bought Body Shop for £652 million in March 2006. The deal was the step taken by L’Oreal to increase their presence in the ‘masstige’ sector (mass market combined with prestige), which Body Shop has worked hard to exploit over the last four years. After the acquisition, Body Shop brand was retained and the company continued to be based in and run independently from the UK.

Matrix:Matrix Essentials, founded by Arnie Miller in 1980 was acquired by L'Oreal in 2000.

Vogue:Vogue was an important acquisition for Loreal Colombia which took place in 2013, consolidating its presence in this highly competitive market. The brand offers development opportunities outside its country of origin, particularly in Central America, Ecuador and Peru.

Magic Holdings:The Company Magic Holdings, whose brand MG is one of the Chinese leaders in cosmetic facial masks was also acquired by Loreal in 2013. As part of the Consumer Products division, Magic Holdings helped the group to conquer new consumers in the strategic Chinese market.

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Interbeauty:The acquisition of Interbeauty, a major player in the Kenyan beauty market, is a step to extend the accessibility of the Consumer Products division. Based in Nairobi, its production platform underpinned the development of the group’s activities in eastern Africa.

Cheryl’s Cosmeceuticals: L’Oréal’s first acquisition in India, Cheryl’s Cosmeceuticals is a trailblazer in professional skincare and beauty salon treatment nationwide. Its skincare services and products extended the offering of the Professional Products division in India.

NYC Cosmetics: L’Oréal’s latest acquisition of Los Angeles based NYX Cosmetics, provides the beauty powerhouse with a mass brand with an edgy makeup artist appeal.

Business ModelL’Oréal is present across all distribution networks: mass market, department stores, pharmacies and drugstores, travel retail and branded retail.L’Oréal’s new sustainability commitment for 2020 “Sharing beauty with all” sets out ambitious sustainable development objectives across the Group’s value chain.

There are four key aspects of their beauty business model

1. Universal

At L’Oreal, operations, HR, marketing and sales approaches are designed to support universalization. They maintain global brand fairness across countries. They foster local developments and adapt to local distribution. Their daily challenges are to develop supreme knowledge of their consumers, to develop geo-cosmetics science, to identify geo-cosmetics science, to identify local ideas with global potential and to conquer new territories.As per them, new markets account for 38.3% of their annual sales.

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2. InnovativeIts seems innovation is in the DNA of the company. The company structures itself to foster innovation. For this, they created regional hubs in key markets for Research & Innovation, Marketing Development and Operations to facilitate local innovation and inspire global innovation. A dedicated research team of 4,000 people are at the core of L’Oréal’s strategy, working to meet beauty aspirations all over the world and attract one billion new consumers in the years to come.

Packaging at the heart Innovation: L’Oréal says packaging is at the heart of innovation. According to the beauty leader, its packaging and development teams are true partners for the brands in designing innovative launch plans. Team expertise says, L’Oréal, has brought products to the market faster, and contributed to the success of major innovative launches, such as Préférence Mousse Absolue by L’Oréal Paris, an aerosol cream hair colorant, and the La Roche-PosayLipikar tube, with a 40% reduction in plastic, which won the Point Vert award from ÉcoEmballages.

Online Approach:Fast company.com has placed L’Oreal into list of most innovative companies of 2015 list. Trying on makeup is key to getting the right look, but it can be super time-consuming to sit there while you get your makeup done. L'Oréal Paris understands this frustration, which is why they've developed a new app that will literally change the way you try on makeup. The cosmetics giant L’Oréal is smartly investing in a future. Last June, L’Oréal's US-based tech lab launched its first product, an app called Makeup Genius. It offers you an instant makeover using real products and real inspiration. The app uses one-of-a-kind technology that recognizes your facial characteristics to ensure a seamless virtual makeup application experience. This technology is truly unique "Seeing is believing," says GuiveBalooch, Global VP of L’Oréal’s Connected Beauty Incubator. Consumers downloaded the app more than 1.4 million times.L’Oréal has a staff of 400 people who post content on Facebook every day, according to Marc Menesguen, the company’s chief marketing officer.

3. Nimble

Beauty is a fast moving business. Trends change quickly. Socompany tries to adapt and be proactive in all fields: research, manufacturing, sales, marketing, HR. At L’Oréalthey always lookout for new opportunities: new products, categories, markets, distribution & e-business.

4. Entrepreneurial

To be high performing and nimble, different brands are well organized for each section of consumers. L’Oréal’s uniqueness is to cover all channels of distribution, all beauty categories and all consumer segments, with dedicated brands. Each business unit is autonomous and operates with a different business model and with its own specific profitability logic.They pursue an ambitious, selective acquisition strategy, concentrating on culturally diverse brands with international potential.

L'Orealuses brand segmentation to drive growth

L'Oréal has a well segmented portfolio operating across different pricing tiers. This has helped L'Oréal to drive sales growth at economically challenging times. They operate strict brand segmentation across its portfolio to retain its exclusive brand identity. For each of its brands the company maintains distinct retailing channels to keep its brand image intact. For premium products e-retailing or selling through

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branded retails are done, for professional division products are available in the loreal salons and consumer division products are available through all channels like drug store, department store, e-retails etc.

Awards& Recognitions

Due their focus on research, active consumer division of brands isWorld’s No.1 in dermocosmetics.

'Global Corporate Achievement Award 2002’ for L’Oreal Europe by 'The Economist Group.' Ranked 1st among Top Global Beauty Companies of 2013 (FY ’14) in terms of sales. In terms of brand value too, Loreal leads the Position, having brand value of about $10.76

billion of L’Oreal alone excluding its subsidiaries. Loreal is the brand which have been awarded AAA+ brand rating, confirming their strength

and future potential as well as demonstrating that they’re well and truly one to watch.

In mass-market cosmetics business, ‘Revlon’ poses great threat to Loreal. Apart from it, Avon makeup products; P&G’s Pantene, Olay, Cover Girl are tough competitors for Loreal. Unilever’s salon range like Tresemme always posed a great competition to LOreal professional division of brands.

The Loreal have an ambition of reinforcingtheir positions in all regions of the world.They will achive this by responding to the emergence of middle classes all over the planet who are eager for modern, high-quality beauty products will be meet soon. They always aspire to win the trust of the consumers and civil society by being an exemplary company.by keeping these aspirations and having a strategic business model they expanded and are expanded more day by day.Apart from all this, where loreal is lacking is that they has no presence in oral care and is a small player in bath and shower.

Ref:

http://www.fastcompany.com/3039614/most-innovative-companies-2015/loreal

http://www.loreal-finance.com/eng/news-release/2014-annual-results-992.htm

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http://loreal-dam-front-resources-corp-en-cdn.brainsonic.com/ressources/afile/119223-29baa-resource-2013-annuals-results.html

http://www.independent.co.uk/news/business/news/loreal-buys-body-shop-for-pound652m-470244.html

http://www.beautypackaging.com/heaps/view/1200/1/173767

http://www.rankingthebrands.com/The-Brand-Rankings.aspx?rankingID=196&nav=industry

http://www.hillandknowlton.co.uk/bandg-preen/posts/2014/april/28/the-top-50-global-beauty-brands-of-2014.aspx

http://www.nytimes.com/1995/12/11/business/l-oreal-to-buy-maybelline-in-cash-deal.html

http://www.icmrindia.org/casestudies/catalogue/Marketing/LOreal-Marketing%20Case1.htm

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