International Business Strategy
INTERNATIONAL BUSINESS STRATEGY
72-hours Individual Case Exam
21.4.2008 – 24.4.2008
Philip Jacek Lange
CPR Number: 100286-1719
Answer to Question 1:
L’Oreal, established in 1909, is today the world leader among beauty companies. It employs over 60,000 people (Company Overview, Facts & Figures, 2008) and had consolidated sales of 17063 Million EUR in 2007 (Latest Press Release Corporate, 2008). L’Oreal sees its mission to further the cause of beauty, and owns branches in Cosmetics, The Body Shop and Dermatology. However, the cosmetics branch is by far the biggest contributor of sales.
Moreover, L’Oreal which is headquartered in Paris, can praise itself of having a portfolio of 19 global brands. These include such well-known brands like Lancome, Ralph Lauren, Giorgio Armani, Vichy, and many more (Our Brands, 2008).
Over the years, L’Oreal has grown dramatically. In 2001 it sold its products in over 150 countries and had 283 subsidiaries and 46 plants scattered across the globe (Winners of L’Oreal’s first annual…, 2001).
Since multinationality is defined as “the extent to which business activities span across national boundaries” (Tseng et al, 2007), looking at these numbers then, one might be tempted to say that L’Oreal is truly a multinational company. Despite these impressive international achievements, these numbers do not offer a very clear picture of the extent of L’Oreal’s multinationality. Therefore, I will go on and try to calculate the level of L’Oreal’s multinationality according to the percentage of foreign sales made outside L’Oreal’s home-country – France.
Following this approach brings along several problems. First of all, I have not managed to find any data showing how big the sales are in France, and therefore I have decided to quantitatively assess it in order to calculate the foreign sales ratio. Second, despite L’Oreal’s activities encompass branches like ‘Cosmetics’, ‘The Body Shop’ and ‘Dermatology’, the latter two only
72-hours Individual Case Exam
21.4.2008 – 24.4.2008
Philip Jacek Lange
CPR Number: 100286-1719
Answer to Question 1:
L’Oreal, established in 1909, is today the world leader among beauty companies. It employs over 60,000 people (Company Overview, Facts & Figures, 2008) and had consolidated sales of 17063 Million EUR in 2007 (Latest Press Release Corporate, 2008). L’Oreal sees its mission to further the cause of beauty, and owns branches in Cosmetics, The Body Shop and Dermatology. However, the cosmetics branch is by far the biggest contributor of sales.
Moreover, L’Oreal which is headquartered in Paris, can praise itself of having a portfolio of 19 global brands. These include such well-known brands like Lancome, Ralph Lauren, Giorgio Armani, Vichy, and many more (Our Brands, 2008).
Over the years, L’Oreal has grown dramatically. In 2001 it sold its products in over 150 countries and had 283 subsidiaries and 46 plants scattered across the globe (Winners of L’Oreal’s first annual…, 2001).
Since multinationality is defined as “the extent to which business activities span across national boundaries” (Tseng et al, 2007), looking at these numbers then, one might be tempted to say that L’Oreal is truly a multinational company. Despite these impressive international achievements, these numbers do not offer a very clear picture of the extent of L’Oreal’s multinationality. Therefore, I will go on and try to calculate the level of L’Oreal’s multinationality according to the percentage of foreign sales made outside L’Oreal’s home-country – France.
Following this approach brings along several problems. First of all, I have not managed to find any data showing how big the sales are in France, and therefore I have decided to quantitatively assess it in order to calculate the foreign sales ratio. Second, despite L’Oreal’s activities encompass branches like ‘Cosmetics’, ‘The Body Shop’ and ‘Dermatology’, the latter two only