Global Strategy Issues of L’Oreal Samples †MyAssignmenthelp.com

Question: What were the main issues LOral was facing in implementing its global strategy? Answer: LOreal was established in the year 1909; this company was established to produce synthetic hair dye from non-corrosive chemical components. The company decided to expand the business in the late 20s century and this is the reason the company acquired a soap producing company and later on the company started introducing shampoos and suntan lotions. Almost from the start, the company decided to expand the business in the foreign markets (Hrebiniak, 118). The company entered in European countries, North America, Brazil and other Latin American countries. At this point, the company showed that they are making the use of the global strategy. The global strategy is a process of expanding and competing in a globalised market. LOreal is implementing the global strategy so that they can expand their business across the world (Peng 3). The company was facing many issues while implementing the global strategy. One of the issues which are faced by the company while entering the Chinese market was distribution. At that time when the company thought to expand the business in China then they find very few markets in China. L'Oreal believes that supermarket is the primary outlet for the bulk of L'Oreal's product lines for its flagship brand. To reach the customer the brand decided to make the use of the departmental stores through which they can easily make the product available to the end users. These departmental stores made the Chinese people understand about the use of the cosmetic product in day to day life. The technique of providing the products through departmental stores opened the ways for the company to expand the business in Paris. The outcome of providing a product at department store made it difficult for a company to get success in the mass retail channel after the supermarket wave hit China. The company is expanding a business to enhance the profitability of the company but the company is facing difficulties in handling the more than 1000 SKUs. The company is manufacturing more than 6 billion product unity every year. These product units were pertained to some 50,000 different Stock keeping units and were produced in the 45 plants that company operates across the world. Handling the manufactured product is one of the issues faced by the company while implementing the global strategy. The company is testing and manufacturing the products at different places across the world, the main testing ground of the company in Brazil. The population of the different country consists of ethnic diversity and the biological differences that became a challenger in terms of the manufacturing of the product and the effectiveness. The products faced this challenge while launching the product in the new market (Daft 273). The company faced the competition with the local markets as well as with the international brand such as Maybelline, which is leading cosmetic firm that is providing the product availability at different places. This competition became an issue while implementing the global strategy (Hong, Hae-Jung, and Yves Doz 114-118). References Daft, Richard L. Organization theory and design. Cengage learning, 2015. Hong, Hae-Jung, and Yves Doz. "LOreal masters multiculturalism." Harvard Business Review 91.6 (2013): 114-118. Hrebiniak, Lawrence G. Making strategy work: Leading effective execution and change. FT Press, 2013. Peng, Mike W. Global strategy. Cengage learning, 2013.