L’Oreal – Attracting the Next Billion Consumers Harvard Case Solution & Analysis

L'Oreal - Attracting the Next Billion Consumers Case Study Solution

Local managers be given the freedom to adapt L'Oreal products to market circumstances

It is noteworthy that the local managers must be given freedom to adapt the L’Oreal products and brands to the market circumstances and conditions, due to the fact that the local managers help the company in establishing the operations of the business in other countries, transfer knowledge and skills to the business partners of business and entering into new or overseas markets.They tend to gain the deeper understanding and knowledge of the local market conditions, cultural factors and business practices. Such local awareness and understanding help the company in avoiding the mistakes and reducing the risks that might limit the growth and success of the company.

The local managers would have greater and deep understanding and knowledge of the market and customers in accordance with the conditions and circumstances, more specifically of market trends, customer choices, demands and preferences.

The company should have decentralized organizational structure, in which the decision making power should be transferred from top management to the subordinate level. Each department would be responsible for the operational decision making, and it would also ensure the decision making opportunities to the lower level managers and middle level managers. The local mangers would better deal with the customers’complaints and queries.

In short, the local manager and owners should control and ensure the quality care and on site management, which is significantly important for the company, for the purpose of maintaining the high standards. The local managers tend to understand and recognize the diversity of the local market’s conditions, hence providing them the broader perspective of marketing. They also develop interpersonal and leadership skills to collaborate and manage with the multicultural teams. The local manager must be given freedom in order to figure out what are the right products and concepts for the local markets.

Launch a "specifically Chinese" super- premium brand& mass market brands

The company should launch the specifically Chinese super premium brand,due to the fact that for the average Chinese consumers, the social status is very crucial and using expensive products and luxury brands is a way to reveal their status. Also, they tend to prefer the high priced goods. As such, the personal care and cosmetics are rapidly growing sectors in China.  Spanning all across wide variety of the industries which comprise skin care, makeup, hair care, fragrances and personal hygiene, the personal care and cosmetic market has experienced a positive growth all around in China. Since, the millennial generation has been rising over the period of time, it has contributed to the quick expansion of middle class and higher consumer demand. The size of the cosmetic industry market has been steadily rising over the period of time. The increase in beauty awareness and consciousness as well as the increasing income of the population in China has positively contributed to the increasing demand for personal care and cosmetic on continuous basis in China.

In addition to this, the company should not launch one or two specifically Chinese mass market brands due to the fact that the appetite among the Chinese population for the luxury and high end products along the price scale is robust and it would be sustainable in future.  The customers in China always seek beauty benefits and prefer investing in quality items. The company should acquire valuable and leading mass market brand in China which has excellent brand image on the basis of the affordability and quality of its products. Such acquisition would allow the company to speed up its growth in the Chinese market. Not only this, it would also enable the company to move more rapidly in the Chinese consumer beauty products market. More specifically, the company would not need to create successful and unique brand positioning strategy for the brands in the Chinese market. The company should enter into the mass market in China by offering one or more products specifically created for the Chinese market or customers.

Recommendation to implement "universalization of beauty" strategy

After taking into consideration the analysis, it is to recommend that the company should make the portfolio of the international brands and it should gain the competitive edge by embracing the diversity in the international growth. The company should make new acquisitions in order to catch the global as well as the regional needs.The management of the operations on the universalization strategy depends on the particular policy of the industry so that the company would be able to stay close to the markets and exploit the market opportunities. The company should acquire valuable and leading companies in order to regionally expand by acquiring the brands with regional and global reach. Such acquisition should be in line with its universalization strategy,and such would enable the company to reach the billions of new customers in forthcoming years, and the company would also be able to spread its footprints internationally.(Copeland, 2019).

It is recommended to Jean-Paul Agon to use the effective approach for branding in the international markets such as e-commerce and social media platform. Such online channels would successfully build the reputation and trust among its customers.  E-commerce and supermarkets have occupied the major distribution share.The online channel of distribution are necessary to get engaged with the local customers.

The global acquisition would allow the company to reach vertical and horizontal integration to increase distribution channel, product offering and profit return and market share. It should seize the potential of extending the market tailored product lines via global partnership i.e. growth strategy in new geographical arenas.  It is significantly important for the company to divide the labor into international Research and Innovation centers that tend to spread strategically in different regions or countries. The globalized and diverse product lines should be incorporated into the primary universalization strategy.

The company should particularly design the product line for the purpose of catering the needs and preferences of the customers in the international markets.It should also implant the new research and innovation centers in specific location that would be responsible for the new design and innovation that targets the new customer base in the targeted country.

The effective marketing and selling of product in international markets require a cohesive and comprehensive strategy that would likely address the sales delivery, sales strategy, value proposition / branding, marketing program, marketing strategy and pricing strategy, which in turn would be creating the market differentiators that propel the revenue growth and market acceptance.(Evans, 2015)..............


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