L’Oréal Global Growth Strategy
A 109-year-old corporation operating in 150 countries, L’Oréal is the world’s largest cosmetics company with €4.68 billion operating profit in 2017. The company’s leading diverse product portfolio has ensured its continued growth in the €200 billion worldwide cosmetics market.
Since it was founded over a century ago, global acquisitions and subsidiaries are a fundamental part of L’Oréal’s strategy, allowing it to reach horizontal and vertical integration to increase market shares, product offerings, and distribution channels. In recent years, L’Oréal has been seizing the potential of extending market-tailored product lines through the growth strategy of global partnership in new geographical markets.
L’Oréal China and Alibaba TMall Group have recently partnered up to leverage data-driven analytics to launch a new campaign.
Stéphane Rinderknech, CEO of L’Oréal China, said that “L’Oréal China will continue to deepen collaboration with innovation partners locally to unleash the value of data insights and create value for our consumers. With our ‘Beauty for All’ mission and consumer-centric strategy, our ultimate goal is to bring personalised products, services and, experiences to every Chinese consumer.”
L’Oréal is a geographically dispersed company that divides its labor into global Research and Innovation centres that are strategically spread in different countries. There are four main geographical zone focuses in L’Oréal that are essential to the company's development, Asia Zone, Western Europe Zone, America’s Zone, Eastern Europe and, MEA Zone. Moreover, L’Oréal has invested 877 million Euro in the research and development department in the year 2017 alone to pursue geographically tailored consumer products.
L’Oréal’s continuous strategic focus on R&D and its one-of-a-kind portfolio of international brands delivered a record operating margin of 18% in 2017. L’Oréal has also incorporated its competitive advantage of diverse and globalized product lines into its primary strategy of universalisation, “the globalisation of cosmetic products that capture, understand and respect differences.”