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Intercultural Management

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Intercultural Management Intercultural Management Summary I. History and L’Oreal Values II. Multicultural challenges III. Impact of the headquarters IV. What problem can be improved? V. Conclusion The area of beauty products worldwide is estimated to be worth 60 billion dollars. L'Oreal has used to be number one. The French company, which offered mainly to white goods, became a global giant over the past ten years. Analysts estimate that L'Oreal had to achieve a turnover of 18.2 billion dollars in 2003, an increase of double-digit earnings for 19 consecutive years. According to Morgan Stanley, L'Oreal is the only cosmetic company that has maintained or increased its market share in the United States and the global market for cosmetics and those for hair. History and L’Oreal Values The origin of L’Oreal goes back to 1907, when Eugene Schueller, a young French chemist from Alsace, is developing a formula for synthetic hair dye. This formula is called the Aurealis, name inspired by a popular hairstyle of the time. On 30 July 1909, he founded the French Society of “teintures inoffensives” with André Spery, an accountant originally from Epernay and employee manufacturer Cusenier spirits. The company is located in a two-room apartment, in Paris, for both office and living room demonstration. In 1936, it became a limited liability company and in 1939 it became a limited company and takes the name of L'Oreal. Main L’Oreal subsidiaries are: L’Oréal Professionnel, Matrix, Redken, L’Oréal Paris, Maybelline, Garnier, SoftSheen-Carson, Lancôme, Ralph Lauren, Giorgio Armani, Biotherm, Helena Rubinstein, Cacharel, Kiehl's, Shu Uemura, The Body Shop, Le Club des Créateurs de Beauté, Vichy et La Roche- Posay. L’Oreal Values: Business integrity L’Oreal and its suppliers share and respect common values. Sustainable development L’Oreal is convinced that lasting success is founded on ethical and responsible principles. Innovation As a value-creation tool, innovation is a major issue for L’Oréal and its suppliers. Quality Quality is one of the key factors for satisfying our consumers. Logistics L’Oreal is constantly seeking out ways to optimize the management of its supply chain. L’Oreal Mission: L’Oreal mission is to help men and women around the world realize that aspiration, and express their individual personalities to the full. This is what gives meaning and value to their business, and to the working lives of their employees. Some figures L’Oreal Turnover: 8,646 billons euros Worldwide Employees: 63,360 World Presence: Europe, Asia, Australia, Africa, USA Multicultural challenges Geocosmetic “- Does every individual living on our planet have the same way of washing his or her hair or taking a shower? - Do all women around the world apply mascara or lipstick in the same way? - How exactly do they do it?” L’Oreal tries and wants to respond to all this kind of question. In order to meet customer needs, L’Oreal chosen a sample of individuals to use their products, these persons are filmed in their daily life and then L’Oreal’s psychosociologists carry out research in order to adapt the product to the customer behavior, typology and habits. For example, L’Oreal’s ethnologists were able to establish that the number of mascara brush strokes varies according to different geographical areas: in Japan, women use on average a hundred of brush strokes on their eyelashes, whereas in Europe, women are content with around fifty on average. These differences in habits lead to constraints in terms of products: The mascara will need to have a light texture and limited covering power to allow a Japanese customer to obtain a good result. FRENCH MARKET L’Oréal acquires Sanoflore organic cosmetics brand L’Oréal has announced its acquisition of the French Laboratoire Sanoflore, a pioneer in the design, manufacture and marketing of certified organic cosmetics products. Founded 20 years ago in south-eastern France, Sanoflore manufactures and distributes through pharmacies and specialist shops its ranges of cosmetics and aromatherapy products. Sanoflore handles all the stages in the aromatic and medicinal plant chain, from cultivation with partner farmers to the finished product. Origin of the rising market for organic cosmetics We can say that the craze for organic cosmetics has several origins: ● Article in the UFC How choose his conventional shower gels ● Guide Cosmetox Greenpeace ● The book Rita Stiens "the truth about cosmetics" From there, consumers have raised questions about the potential dangers of synthetic chemicals in traditional cosmetics. ASIAN MARKET L’Oreal penetrated the Chinese market in 1997 with first Maybelline Brand, and then it launched other brandsof the group like L’Oreal Paris, Lancôme… L'Oreal has also acquired two brands Chinese Mini Nurse and Yue Sai. Thanks this policy L’Oreal benefited of distribution network and covered all market. L’Oreal consumers in China are urban women between 15 and 40 years old but the target widen. And the men market beginning to develop. Understand the needs and adapt products to the market: Two years ago, L'Oreal has established a center for research and development near of Shanghai. Each day, skin and hair consumers are studied carefully. Test of new products, interviews, photographs, a valuable database is formed. Objective: To meet the specific requirements of Chinese women. And now, l’Oreal wants to use plant substance in their products, currently tests are realized on the products with bamboo or tea. AFRICAN MARKET Dark and Lovely Beautiful Beginnings is the range of U.S. brand SoftSheen Carson, specializing in hair products hair Afros. SoftSheen was founded in 1964. Leader in the United States in care products for professional hair Afros, it was purchased by L'Oreal USA in 1998 to join other major brands of L'Oreal Group. In 2000 it merged with Carson, another brand hair Afros group L'Oreal, becoming the brand SoftSheen Carson. In the United States, L'Oreal has turned its attention to the market of beauty products for ethnic minorities. According to one estimate, the value of this market in the process of rapid expansion could reach $ 14.7 billion annually by 2008. The beauties cares of these were monopolized by blacks companies. With the help of researchers from the institute beauty descendants of ethnic minority L'Oreal, both companies have developed products that can be sold outside the United States. Concerning black population, the first target is Africa. "If we want to pretend to be the world number one, we cannot overlook the 1 billion consumers of African," said Alain Evrard, director general business section of L'Oreal Africa. Before the merger, SoftSheen and Carson were rooted in South Africa and their shares on the market of products for the hair of South Africa, worth about $ 90 million, were nearly 41 % in 2002. L'Oreal hopes to have a presence in other African countries. According to a study, many Africans believe that if L’Oreal products correspond to the consumers demanding of the United States, thus they certainly should correspond to their expectations. With interest in a small number of consumers in the U.S. market, L'Oreal has won a larger market in the world. African governments wishing that cosmetics firms are implement in their countries and create jobs. Given the size of the market, some giants have already acceded to this wish. Example: L'Oreal, which aims trust half of the entire African market by 2015. The French group will invest this year to expand its factory in Johannesburg, it operates only in Africa. In the zones of Zimbabwe, investments related to cosmetics announced this year already 500 to $ 650 million. Thus, the cosmetic companies in Africa, the Ghanaian Zochonis Paterson, the Senegalese Siparco and Detco, South African Clicks & Dickom, Amke cosmetics and Zimbabwean Fashion and cosmetics are essential for competition. Theoretically, the market should give them an advantage: to offer products for skin and black hair. But this is not the case. Many consumers prefer imported brands, even if they sell price is more expensive and the effectiveness is less. The African cosmetics industries also suffer from unfair competition from fakes. Fake perfumes, tampered creams, soaps scented artificially manufactured in local shops or imported from Asia at reduced prices. Whatever the authenticity provided there is labels prestigious seem to say that consumers. African manufacturers also suffer from their small size. Chicago, a center of Afro-American In 2000, L'Oreal has invested $ 11 million for building and construction in Chicago of the L'Oreal Institute for research on skin and hair ethnic group of the first laboratory of this type. The city of Chicago was chosen as the location for many reasons. Softsheen has long had its headquarters in the city and Chicago is a cultural, historical and academic black American. Many famous universities are located in the area and present opportunities for synergy with the new research institute L'Oreal. New products Consumers of different ethnic origins have specific needs in terms of skin care and hair products that require specially products formulated for them. The acquisition by L'Oreal of the mark Sheen.Carson-Soft, a global leader in skin care and hair for black women, has greatly expanded the Group's activities in area. When the group L'Oreal launched its offensive on the market for ethnic hair products, it was for him not to go near a market in the world estimated at 1.8 billion dollars to maintain its lead meet its competitors, especially Procter & Gamble, which, since the acquisition of Clairol and Wella, had emerged as a leader of the ethnic overtones. With the acquisition in the U.S.
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