Loreal Nederland B.V.

LЎ¦Oreal Nederland B.V.

Pertinent Facts

LЎ¦Oreal is the largest cosmetics company in the world. In 1992 the LЎ¦Oreal Group was the largest cosmetics manufacturer in the world. They are Headquartered in Paris, it have subsidiaries in over 100 countries. In 1992, its sales were $6.8 billion (a 12% over 1991) and net profits were $417 million (a 14% increase). France contributed 24% of total worldwide sales. Europe (both western and eastern countries, excluding France) provided 42%, and the U.S.A and Canada together accounted for 20%; the rest of the world accounted for the remaining 14%. LЎ¦OrealЎ¦s European subsidiaries were in one of two groups: (1) major countries (England, France, Germany, and Italy) or (2) minor countries (the Netherlands and nine others).

The company believed that innovation was its critical success factor. It thus invested heavily in research and development and recovered its investment through global introductions of its new products. All research was centered in France. As finished products were developed, they were offered to subsidiaries around the world. In established markets such as the Netherlands, any new product line introduction had to be financed by the current operations in that country.

LЎ¦Oreal doesnЎ¦t sell all of its product lines in every market in which it sells, and the market in the Netherlands is no exception. In the Netherlands, unlike in France, LЎ¦Oreal and Garneir are both sold under the same sales force. In this particular case, LЎ¦Oreal needs to decide which Garneir product lines such as Synergie skin care line and the Belle Couleur permanent hair colorants line to introduce in the Dutch market.

Issues

• Although, LЎ¦Oreal is the largest cosmetics company in the world but

LЎ¦Oreal doesnЎ¦t sell all of its product lines in every market and also in the Netherlands

• Upper management of the NetherlandsЎ¦ LЎ¦Oreal subsidiary have to make decisions on which product lines will succeed in their market and which ones will fail .

• LЎ¦Oreal needs to decide if it would like to introduce Garnier product lines such as the Synergie skin care line and the Belle Couleur permanent hair colorants line into the Netherlands market.

• The basic problem is what product lines should be introduced into the Dutch market under the Garnier name without negatively effecting the current product lines already available under the LЎ¦Oreal brand.

S.W.O.T Analysis

Strengths

Will known brand and plenty market share

LЎ¦Oreal is the largest cosmetics manufacture in the world. It has subsidiaries in over 100 countries and international subsidiaries could make its own decision

RD capacity

LЎ¦Oreal they believe innovation is its critical success factor for the company, they try introduce one or two new products in every year.

Market research

They are willing to do the market research before they sell products in that market

Willing to listen to customers

After they complete their research, they are willing to listen to customers and modify their product in order to fit the market.

Weaknesses

Consumer behavior and loyalty