Loreal
L'Oreal's Global Makeover: Case Study
Problem: L'Oreal has a number of issues to consider; the approaching retirement of CEO Owen Jones, the potential takeovers of Nivea and Shu Uemura, their trouble gaining a presence in the Japanese market, and the lack of revenue in certain areas of their products offerings. There is also some loss in business for high demand products during turnover time as buyers wait for new shipments.
Condensed Recommendation: L'Oreal should carefully select a CEO candidate who has experience in global management and the ability to spot trends. L'Oreal should proceed with the potential takeover of Japanese Shu Uemura, but they should reconsider the Nivea takeover as it may open them to a potential takeover threat. They should continue with their global expansion by developing new brands to meet particular ethnicities, perhaps aiming to catch the South American market as they have done with the African market. They should also flesh out their dermocosmetics products lines to increase the low 6% revenue in that area.
Problem
L'Oreal has experienced unprecedented success through global expansion into new beauty-product markets, under the direction of Owen Jones, who became a chairman in 1988. In 2006, Owen Jones plans to retire, so there is some speculation on how things may change with his successor. Currently there are a number of business maneuvers L'Oreal is considering: the friendly takeover of Japanese brand Shu Uemura, the bid for German Nivea, and the sale of their 19.5% interest in Sanofi-Synthelabo. There is also a potential takeover threat from Nestle, as they have a 26% interest in the L'Oreal; and the potential takeover threat from Beiersdorf/Tchibo Group, who have a 30% interest in Nivea, so if L'Oreal buys into Nivea they could expose themselves to a takeover attempt and start a bidding war.
...
Please login to view the full essay...