L’oreal’s Way to Success in the European Haircare Products Industry
L’oreal’s Way to Success in the European Haircare Products Industry
Introduction:
L’oreal, the name of the cosmetics giant, appears with high frequency in nearly all world-class newspapers and magazines in recent times. There is a striking headline in the Independent (London, England) on Feb 21, 2004 p54, “L'Oreal builds on two decades of growth as profits soar.” The news is “L'oreal has set its sights on notching up two decades of consecutive annual double-digit growth after reporting a 13.5 per cent rise in profit last year.” Lindsay Owen-Jones, chairman, showed his confidence for the rate of internal sales growth next year. Maybe it is not too difficult for a company to rank first of its annual sales growth. But it seems a mystery for a company to keep its position of market-leader in the world with annual double-digit growth for 19 years and even more enigmatical for a company in the cosmetics industry. How can L’oreal compete against its rivals and gain today’s success? Let’s go back to 1997. At that time, L’oreal was the market leader in France and at the end of June, after considerable coordination between company headquarters and subsidiaries, Lindsay, stated the company’s new mission : Make L’oreal Elsève a leader throughout Europe. Though shampoo was used by 83.5% of the population, there was little brand loyalty and it was extremely difficult to create any. A widespread belief in Europe is that changing shampoos frequently was good for the hair because otherwise it would get used to a particular shampoo and the result would not be so satisfactory. The important reason is that shampoo is a product which can help L’oreal penetrate into all households by all kinds of people. Leadership in the shampoo could give L’oreal a considerable boost in its brand recognition and make it accessible to the young customers and males. The ardousness ahead of L’oreal was obvious. This article will base on L’oreal, the pilgrim’s progress, to analyze what critical success
Introduction:
L’oreal, the name of the cosmetics giant, appears with high frequency in nearly all world-class newspapers and magazines in recent times. There is a striking headline in the Independent (London, England) on Feb 21, 2004 p54, “L'Oreal builds on two decades of growth as profits soar.” The news is “L'oreal has set its sights on notching up two decades of consecutive annual double-digit growth after reporting a 13.5 per cent rise in profit last year.” Lindsay Owen-Jones, chairman, showed his confidence for the rate of internal sales growth next year. Maybe it is not too difficult for a company to rank first of its annual sales growth. But it seems a mystery for a company to keep its position of market-leader in the world with annual double-digit growth for 19 years and even more enigmatical for a company in the cosmetics industry. How can L’oreal compete against its rivals and gain today’s success? Let’s go back to 1997. At that time, L’oreal was the market leader in France and at the end of June, after considerable coordination between company headquarters and subsidiaries, Lindsay, stated the company’s new mission : Make L’oreal Elsève a leader throughout Europe. Though shampoo was used by 83.5% of the population, there was little brand loyalty and it was extremely difficult to create any. A widespread belief in Europe is that changing shampoos frequently was good for the hair because otherwise it would get used to a particular shampoo and the result would not be so satisfactory. The important reason is that shampoo is a product which can help L’oreal penetrate into all households by all kinds of people. Leadership in the shampoo could give L’oreal a considerable boost in its brand recognition and make it accessible to the young customers and males. The ardousness ahead of L’oreal was obvious. This article will base on L’oreal, the pilgrim’s progress, to analyze what critical success
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