L’Oreal Mission and Strategy: An Analysis
2016 was another great year full of successes for L’Oreal. The brand saw several critical achievements during the year and has increased its focus on digitization. Its growth and performance accelerated in 2016 and again L’Oreal emerged as a market leader in the beauty industry. Three of its strategic divisions saw great progress during the year – L’Oréal Luxe, Consumer Products and Active Cosmetics. The year was again great in terms of strategic acquisitions and innovations. The brand made some important acquisitions which perfectly complement its global group of brands including that of IT Cosmetics, Atelier Cologne, Saint-Gervais Mont Blanc and CeraVe. It owns thirty four brands globally and employs 89,300 people.
Its financial results also showed the effectiveness and efficiency of its business model and how it was focused at creating exceptional value. The brand also retained its focus on digital innovation and its online sales grew by 33%. It has also focused on more efficient targeting through advertising and for that it has upped its expenses on digital advertising. 30% of the brand’s advertising is digital. The world of fashion and beauty has undergone radical change in 21st century and L’Oreal is a very important player in this story. In this era, beauty is not just about skin care or fashion, it is now an essential ingredient of people’s lifestyle. This is an analysis of the mission and strategy of L’Oreal.
Mission Statement of L’Oreal:
Our Mission, Beauty for All. Offering all men and women worldwide the best of cosmetics innovation in terms of quality, efficacy and safety to satisfy all their desires and all their beauty needs in their infinite diversity.
A mission statement is the reason that a company exists for. It explains what a company is doing or what purpose it stands to solve. A mission statement is also like a yardstick that the managers can use to measure their actions and decisions in day to day scenarios and if they suit the organization and align with its mission. Several companies have separate mission and vision statements. A vision statement explains the future of the brand and where it wishes to be in future. Several companies have the same statement for mission and vision both. L’Oreal does not have a separate vision statement but it does have a strategy statement which explains its strategy for future and which I will discuss in later parts of this article. The mission of L’Oreal is Beauty for all. It offers innovative beauty products that are safe and efficient and which satisfy diverse beauty needs of a diverse customer group. The mission statement is mainly focused on the products. While it does not discuss things like the brands under L’Oreal or their target customers, it mainly highlights how it is trying to satisfy its customers’ needs. So, it does not get very precise about either its products or its customers but only highlights that its products which are good in quality, produced through innovation are meant to satisfy the needs of both the sexes. Its mission statement can be more specific or precise and can discuss things like competition, financial strength, target customers etc. However, these things are not included in the mission statement, which are important with regards to resource allocation and decision making.
Strategy of L’Oreal:
L’Oreal has chosen a unique strategy : Universalization. It means globalization that captures, understands and respects differences. Differences in desires, needs and traditions. To offer tailor-made beauty and meet the aspirations of consumers in every part of the world. L’Oreal is driven by this vision of the world.
L’Oreal strategy statement sounds like its business philosophy. The focus of the statement is the diverse needs of a diverse customer segment which is just as diverse in its needs as in its composition. The brand is focusing on building a universal identity and on understanding the differences in terms of needs and catering to them. L’Oreal’s strategic vision is to develop a brand that caters sustainably to the needs of a diverse customer group. It is not only thinking of catering to the needs that globalization has given rise to but also to respect the differences that exist between people, nations, cultures and markets. That’s what it calls universalization.