Presented by: Jane Lancia Nancy

The L’Oreal history• 1907 – found by Eugene Schueller

• 1912 -1920 Expanded to the US, Russia and Asia

• 1953 - Issued a license to Cosmair

• 1965 – Expand business into health and beauty products through acquisition

• 1980s-1990s expanded acquisition

• 2000 - hair and beauty products

• 2001-now Acquisition hair care, skin care and color cosmetic company

The history of cosmetics

• 3750 BC - First used in Egypt

• 7C-12C distillation procedure was invented

• 18C-19C technology was used in the production of cosmetics

• Mid 20C - About 500 cosmetics companies in the world

• Being monopolized by multinational company by the end of 20C

Global issues

Brand acquisition & expansion (culture awareness & demographic differences) New York Maybelline New York

China Vichy

Chicago Establishment of “L’Oreal Institute for Ethnic Hair & Skin Research”

Global issuesGovernmental intervention Localized laws (centrally planed economy) High import taxes and tariff Merchandise restrictions

Cultural differences (Yuesai & Mininurse)Fierce competition (home, abroad, counterfeits)

Future trendsintegrated industrial chain (generally)Major beauty servicesSupport production of material professional instruments & cosmeticsMatched industry ornament color service image designMedia exhibition advertisement beauty newspapers & magazinesBase of talent resource beauty education

Company AnalysisStrength

Strong brands portfolio 12 core brands account for 90% of its sales

Geographic presenceExcellent advertising strategyStrong R&D capability 5 R&D Center: France: Aulnay, Pairs America: Clark Japan: Kawasaki China: Shanghai ( Sept.2005)

L’Oreal Sales Analysis

L’Oreal-Geographic presence

Weakness

Weak performance in some areas North America: Shampoo & Conditioners—P & G

In 2007: Europe:52.7% North America: 27.6% Other:19.7% German: Hair coloration– Henkel Western European: Hair styling

Lack of uniform advertising support

Opportunity

The rapid growing cosmetic market Market: 12%; $1 billion(2010); American old people: form 13% to 20%

Potential in emerging market Brazil Africa Asia

Acquisition and alliance Diesel—Perfume Sanoflore—Organic cosmetics The Body Shop—International cosmetics brand

Threat

Fierce competitionMoral issue on animal testing Naturewatch Compassionate Shopping Guide The Body Shop

Competitors

Domestic competitor

Dior

Abroad competitor

Procter & Gamble

Shiseido

Dior

• 1946, headquarter in pairs, France

• Three categories: skin care, color cosmetics and perfume

• Elegant and gorgeous design

Procter & Gamble

• Second –largest professional hair production company

• The market share of 24%, L’Oreal is 29%

• More than 300 brands in over 160 countries

• Focused on hair care market in 2000

• The diversity in product

• Major retailer-Wal-Mart

Shiseido• Japan brand , found in 1872

• The first lotion –Eudermine

• Fit for Asia skin

• Range of customers ( 20-50 –year-old) • Innovation

RecommendationsShort-term

“Green” products Focus on campus Sponsoring school activities Holding beauty lectures

High-level image stores Image information consulting Beauty clubs for regular customers

Market Share

Long-term Expansion in emerging markets Brazil Russia India China

Cultivating and attracting high-qualified beauty talents

Raising brand awareness Media sponsorships TV commercials

Conclusion--Formulas

Strength Weakness

Market Leader

Lose Market

= =

Opportunity Treat

Recommendation

Promising Future

Thank You!