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> Here you will find an extract from a sample essay written by one of our writers from the field of Business. We have posted these papers online to give our customers a general idea of what kind of services we offer. Please remember that all essays posted on this website belong our company and can be used for educational purposes only.

> Business: L'Oreal The International Giant

> Requirements: Develop a paper in MLA Style on the topic provided above. It must be written using the following outline: Introduction, Company Profile, L'Oreal Worldwide (how the company become a international company and how is doing today with future plans), Conclusion.

> Project Developed:

Introduction: Company Profile.

The company we will analyze has long remained the uncontested market leader represented under 12 global brand names in more than 150 markets worldwide. It currently employs 48,222 personnel, and its headquarter research staff outnumber the blue-collar personnel. The company has created 75 percent of jobs outside its home jurisdiction [2]. However, that is hardly the only or key factor that lay behind Fortune ranking it among the Top 10 companies to work with anywhere [1]. L'Oreal's single most important source of the solid and ever growing competitive edge has long been its CEO's uncanny knack for making the most out of the best practices of global branding. In many cases, however, his concept of market expansion was so unconventional, it alone could make him identify with the utmost entrepreneurial caliber of innovation and risk taking.

Discussion.

The company has enjoyed a seventeenth consecutive year of double-digit growth in revenues, market share, and profits. Among the somewhat subtle and intricate factors contributing to the company's consistently promoted leadership are some pertinent characteristics of the environment. Thus, the business originates from a French legacy, where over the past several decades the corporate sector has undergone a dramatic upheaval, when it comes to market discipline and performance monitoring, as well as managerial ethics. At present, up to a 40 percent of the economy is controlled by outsider investors, which in itself constitutes an important criterion of transparency, integration, and open contest in a global environment. On the other hand, the political and institutional setting manifest in the modern France continues to build heavily on close affinity between the political and business sectors, thus making for a material control over the public sector and publicly held going concerns alike. However, L'Oreal has managed to behave as if it were an all-transparent participant of a contestable yet less regulated marketplace. Most importantly, though, the company's strong lead in the area of beauty and health products has been supported by what's referred to in the international trade literature as the competitive edge grounded in the historical legacy of domestic internal pressure in terms of demanding standards of quality and variety.

The company's competitive advantage has always been based on the strong emphasis on research and development. The two out of its four CEOs over the past century were scientists, which has instilled the good legacy of cross-disciplinary training, whereby the marketing personnel are exposed to the basic research premises underlying the better properties of the company's products. On the other hand, the rather moderate chairman turnover has by many an observer, and the current CEO Owen-Jones in particular, been judged as a conducive corporate governance. Much akin to adequate political stability and little changing corporate culture, that provides the strategic management with the leeway to see their decisions through that are too risky and long-run oriented to be judged and criticized based on immediate performance.
And yet, the company has exhibited enviable performance throughout its recent operating history.

The industry specifics that call for an ongoing flow of new products and concepts in order to maintain an edge and a core market share, have forced the company management to continually revise and reshuffle the market portfolio. Indeed, by diversifying the portfolio of its products, while remaining able to differentiate the brand value even with a growing number of brands (own and competitive alike), L'Oreal has challenged some of the "novel" conventions in modern global marketing. For one, the company's being the standard setter in both product and marketing concepts has long been indisputable. However, it might appear somewhat unusual zooming in on L'Oreal's main positioning stake, whereby it does not necessarily places the globalization (standardization) notion over the localization (adaptation) principle. As a reminder, the former pertains to the concept of a 'truly' global rather than merely international brand, whereby a product is being positioned as a single brand on all markets without material differentiation. Standardization has its pluses, such as low cost of advertising, no-interfering images and messages, and forcing the broader marketplace into convergence, thereby supposedly reducing the cross-cultural dimension's relevance.

Adaptation implies a strategy whereby the product is being tailored to whatever local idiosyncrasies may define the ease of its positioning on the markets in focus. Rather than attempting to implant any single concept as a basis for the growth of a network of supporters, the company suggests several concepts that maximize the very number of the potentially or de-facto existing networks contributing to the overall demand. Thus, in the US market it may position the French charm, whereas in China it could well have a stake on the American trendiness.

L'Oreal's stable and solid financial performance has in fact much facilitated its R&D expansion, let alone earned it a good and lasting reputation on the market as a wisely managed and well-diversified portfolio of products, all of which represent high-power earning assets. In fact, the company is currently selling at 46 times its earnings, as compared to the market average price/earnings ratio of about 20. That might appear as a hefty overvaluation, bounded for downward adjustment in the future. However, that is not likely to happen, if only in light of the company's enviable and even performance in crisis and post-crisis periods. For one, its smart industry and portfolio selection has made it virtually cyclical with respect to market and the economy on the whole. Secondly, L'Oreal managed has labored constantly to reap whatever synergies and complementarities there were to team work and consolidation prospects that could contribute material cost economy and new market share. The company has lived up to expectations, and as a result the market has assigned it so high a premium that, on the one hand, overvaluation begins to look as but an equivalence of confidence in the earnings engine; and on the other, earnings 'surprises' have become less of a binding constraint for stock valuation in the longer term.

L'Oreal's entrepreneurial ability to secure one up on the market has also stemmed largely from its knack for diversifying in the dynamic context. In particular, one of its primary strategic fortes has been the management and timing of its products lifecycle, by introducing novel concepts and displacing them from the more mature European and US markets to emerging markets and emerging segments. The company is reputable for having its subsidiaries collaborate in R&D and yet compete in marketing. Such mutual cannibalization might appear inconsistent with the novel premises of marketing, but only superficially so. Rationale might lie in the fact that the company deploys the long-term benefit of doubt in its portfolio management, in that it does not position any of its brands as long-run concepts set in stone and to be adhered to. One accedes, L'Oreal shows little sentimentality in saying bye to 'old friends' and establishing new liaisons, which cynicism has spared it an unprecedented edge and might in fact be part of the entrepreneurial modus operandi's cost.

The company retains lead in Europe and North America. It has expanded in Asia and Latin America even at the more disturbing and ill-confident times. However, Japan' the world's second largest market for cosmetics, remains its weakness. Part of that might be blamed on the significant entry barriers, whether it be in terms of distribution channel protectionism and cronyism or in terms of manipulable technical and health standards. Although de-facto the smart merger and acquisition strategy has been one lynchpin underlying L'Oreal's core market share advantage, the company management officially dismisses further such alliances, in particular with giants like Nestle, as the major stake the company will continue to have in the future ...

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