L'Oreal Strategy For Nederland

In 1907, EugÐ"Ёne Schueller, a young French chemist, developed an innovative hair-color formula. He called his improved hair dye AurÐ"©ole. With that, the history of L'OrÐ"©al began. EugÐ"Ёne Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers.

In 1909, Schueller registered his company, the SociÐ"©tÐ"© FranÐ"§aise de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France"), the future L'OrÐ"©al. The guiding principles of the company that would become L'OrÐ"©al were put into place from the start: research and innovation in the interest of beauty.

In 1920, the small company employed three chemists. By 1950, the research teams were 100 strong; that number reached 1,000 by 1984 and is nearly 2,000 today.

L'OrÐ"©al got its start in the hair-color business, but the company soon branched out into other cleansing and beauty products. L'OrÐ"©al now markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair color, permanents, styling aids, body and skin care, cleansers and fragrances. They are found in all distribution channels, from hair salons and perfumeries to hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.

L'Oreal's strengths include the fact that it is the largest seller of hair care and beauty products in the world. It is the market leader, concentrating on 12 core brands which account for 90% of its sales. Some of these products are diversified by price, and some by cultural image. The company has taken advantage of economies of scale in packaging and advertising, enabling improvements in profit margins. Its net profit has doubled every 5 years during the last decade.

L'Oreal provides significant funding to research and development, uses and develops leading-edge technology, and regularly and successfully introduces new products onto the market. L'OrÐ"©al has five worldwide research and development centers: two in France: Aulnay and Chevilly; one in the U.S.: Clark, New Jersey; one in Japan: Kawasaki, Kanagawa Prefecture; and in 2005, one was established in China, Shanghai.

L'OrÐ"©al has 60,851 employess in 58 countries , and also has 40 factories around the world.

Its weaknesses include profit margins that are slightly below some of its smaller rivals, a decentralized organizational structure that can make control difficult, and the difficulties in coordination and control of activities and image when operating in a global market.

Opportunities stem from the fact that L'Oreal has concentrated on hair-styling and color, skincare, cosmetics and fragrances, the fastest growing field in the beauty business. It is benefiting from increasingly ageing and affluent population in developed countries. Emerging markets accounted for 27% of world cosmetic sales in 2000 and are growing. Fluctuations in the economy have little impact on this market.

L'Oreal registered more than 400 patents last year, which could give them even greater market share in the future. Several acquisitions added to the bottom line and provided opportunities to enter new areas at lower costs. L'Oreal also benefited from favorable exchange rates in 2000.

Opportunities stem from the fact that L'Oreal has concentrated on hair-styling and color, skincare, cosmetics and fragrances, the fastest growing field in the beauty business. It is benefiting from increasingly ageing and affluent population in developed countries. Emerging markets accounted for 27% of world cosmetic