Because I'm worth it !
The company profile
Activity: Consumer goods, divided in 97.5 %
of cosmetics and 2.5 % of dermatologyChairman: Lindsay Owen Jones
Headquarters: L'Oréal - centre Eugène Schueller
41 rue Martre - 92117 Clichy cedex.Factories: 42 worldwide
Number of employees: 50,000 worldwide.
Turnover ( sales ): 15 billion euros in 2003.
Profits: +13% in 2002.
Listed on the stock exchange.
Capital: 52,530 billion euros.
Annual dividend in euro: 0.54
Main shareholder : Gesparal ( 53.7% )
Historic
· In 1907, Eugène Schueller, a young French chemist, developed an innovative hair color formula. He called this product "Auréole". With that the history of l'Oréal began. He manufactured his own products and then sold them to the Parisian hairdressers.
· In 1909 Schueller registered his company, the "société Française de teintures inoffensives pour cheveux".
Eugène Schueller gained the backing of an accountant from Epernay who provided 25,000 French francs. This enabled Eugène Schueller to think on a larger scale - he moved the company which he renamed "L'Oréal" to a four bedroom apartment in the rue du Louvre, he recruited his first employee and he began to advertise his products via a trade journal "La Coiffure de Paris".
· In 1920 the company already employed 3 chemists.· In 1934 Eugène Schueller recognised a huge potential for hygiene and toiletry products for the body and hair. He took over Monsavon and in 1934 launched Dop, the first mass-market shampoo without soap.
It became L'Oréal's philosophy to make technological products available to the largest number of people.· 1957 Eugène Schueller died. Lilianne Schuller Bettencourt, his single girl, succeeded.
· 1960 L'Oréal bought Garnier.
· 1963 L'Oréal was introduced to the Stock Exchange. The Stock Market capitalisation of the group has multiplied by 100 since this date.
( metre un ex de quote en bourse envoyé mardi matin
· 1965 Guy Laroche Perfumes were created. With the launch of Fidji, the group became involved in the creation and development of perfumes for the first time.
· 1974 Lilianne Bettencourt exchange 46%3 of L'Oréal against 4% of Nestlé.
· 2000 a big evolution :L'Oréal acquired Miss Ylang, the leading mass-market make-up company in Argentina.
The group has purchased Carson. Carson, Inc. is the leading manufacturer and marketer of hair and skin care products for people of color worldwide.
L'Oréal acquires Kiehl's, a family-owned beauty company, known in the U.S. for quality, personal service and technical excellence. Founded in 1851 as an apothecary business in New York City, Kiehl's has established a unique reputation in the prestige cosmetics market.
L'Oréal acquires Matrix, the leading manufacturer of haircare products for the professional salon industry in North America. Matrix manufactures and markets shampoo, haircolor, styling and hair care products sold exclusively through beauty salons.
The products
The l'Oréal group markets over 2,000 products in all sectors of the beauty business: hair color, permanents, styling aids, body and skincare, cleansers, fragrance and luxury perfumes.
They are found in all distribution channels from hair salons and perfumeries, to hyper and supermarkets, health, beauty outlets and direct mails.
The brands
L'Oreal group owns various brands such as : Biotherm, Armani, Lancôme, Elena Rubenstein, Laroche Posay, Vichy, Redken, Cacharel, Ralph Lauren, Paloma Picasso, being distributed in selective channels and with brands such as Harley Davidson , Gloria Vanderbilt, maybeline, Garnier, and l'Oréal being distributed in the mass-market (cf. annexes).
Fourteen global brands account for over 92 % of the sales forming a balanced and complementary portofolio that is evenly distributed according to distribution channels and product categories.
Each brand is clearly positioned in a specific segment reducing the risks of competition between the group's different brands.
The consumers
The customers aimed by L'Oreal products are for the most important part the women ,after a smallpart for children and another small one for the men. The target depends on the category of the product.
Production policy
With 42 plants worldwide, 4,500 employees in manufacturing sites and over 3,7 billion units produced, the organisation of L'Oreal is performant. The group L'Oreal try to reduce the manufacturing costs and the reorganisation of the production function.
In Europe the consumer products division has largely completed its restructuring. There are now four factories for the L'Oreal Paris brand, and five for Garnier.
In North America the Montreal factory has doubled its output.
In Western Europe the capacity of the Polish factory was doubled enabling it to supply Eastern Europe and the Russian federation.
The production in Latin America is concentrated in Brazil after the closure of the Argentinean factory (economic crisis).
In Asia Pacific the factory in China became the largest base for Asia. The Australian factory was closed.
Strategy
Cosmetological and dermatological research is the focal point of L'Oreal's development strategy and is one of the key to its success. The quality of Loréal products are based on innovation which has been nurtured since the foundation in 1907. In 2002 the research budget grew faster than sales. RD is very important: 2,800 scientists are focused on a limited number of global brands.
To drive the group's future growth L'Oreal must constantly look for new market segments that offer rapid expansion potential. In 2001 they made a more in the field of cosmetics for consumers of African origin by acquiring Carson. Thus becoming the world leader in this market in 2002. Also in 2002 a joint venture was set up with Nestlé for the marketing of nutritional supplements commonly called beauty pills. The first products were launched in 2003 under the brand Inneov.
Advertising campaigns are essential and based of endorsement which permits to the consumers to identify to celebrities. The slogan "L'Oreal because I'm worth it" is well known all over the world thanks to first Claudia Chiffer, second Virginie Ledoyen and at the moment Laetitia Casta, Milla Jovovich and Beyonce Knowles.
Nanda Hampe Kadra Ahmed Nanda Hampe Kadra Ahmed Omar
Laetitia Casta Milla Jovovich Heather Locklear Laetitia Casta
Judith Godreche Jessica Alba Milla Jovovich Laetitia Casta
Milla Jovovich Milla Jovovich Nomie Lenoir Milla Jovovich
Claudia Schiffer Milla Jovovich Milla Jovovich Diana Gartner
Milla Jovovich Lida Egorova Patricia Hartmann Patricia Hartmann
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Toneya Bird Sarah O'Hare Claudia Schiffer
Andie MacDowell Marina Bukvic Andie MacDowell
Daniela Pestova Cybill Shepherd Vanessa Williams
Juliette Binoche Tatjana Patitz Milla Jovovich Virginie LedoyenDevelopment all over the world in 2003
In 2003 the market in Western Europe increased by 6.1%. Its highest level in four years. In North America after a rather slow start and against a difficult economic backdrop, the spectacular success of new products such as Polo Blue by Ralph Lauren. Finally resulted in a growth level comparable with Europe. But the most striking development was the powerful acceleration of sales in new markets. The brands achieved remarkable breakthroughs in countries such as the Russian federation + 61%, China + 58%, and South Korea + 30%
Competitors
L'Oreal predominate in the cosmetic industry but not in all category because of the importance of the competition.
In the perfume industry the most important competitors of L'Oreal are:
· Chanel
· Christian Dior
· LVMH (Lous Vuitton Moet Hennessy)
· Yves St Laurent
· Yves RocherAnd in the cosmetics:
· Aron
· Clarins
· Christian Dior
· Nivea
· Vendome
All compete to dominate the market.
Conclusion
In the future, L'Oreal will continue to develop thanks to Research and Developement help with strong advertising campaigns. But L'Oreal will place organic growth as a core priority. It is a promising market where the group is not yet active. It will develop toward regionally strong brands that can be linked with L'Oreal existing brands, to accelerate international expansion.
Bibliographie
· Newsweek
· Capital
· LSA
· La saga des Bettencourt - Plon
· www/loreal-finance.com
· www/funny- bourse.com
· www/emediaplan.com
