" L'Oreal and the Globalization of American Beauty”
I. Key Problem
From your inception of L'Oreal, in 1907, before the late 70's the global beauty market was largely fragmented and seen as the domination of neighborhood consumer choices over the look for global efficiencies. Though buyer product firms had been little by little moving toward beauty products and cosmetics, the 80's proclaimed a breathtaking industry shift when major conglomerates, just like Unilever and P& G, began to purchase leading U. S. firms to globalize their brands. In order to keep program an industry that was going through rapid debt consolidation and the breakthrough of better international competition, L'Oreal made a decision to revamp their globalization strategy. They started to build their particular international strategy of changing from a French beauty organization to a global brand name throughout the five proper elements of circles, vehicles, differentiators, staging & pacing, and economic reasoning. Because of the slim perception of Parisian splendor being magnificent and high-priced, L'Oreal thought that to be able to compete in the international marketplace they would need to expand their particular image and give a more complete product line. You�re able to send management determined that the American beauty market was the entrance to further intercontinental expansion and therefore initially targeted the U. S. his or her arena. To achieve a position inside the U. S. market, L'Oreal used the automobile of foreign direct expenditure by cautiously moving to obtain potentially lucrative U. H. brands. That they hoped to use these purchases to create a total portfolio of products that they may promote not only locally nevertheless also in all of the major global markets to obtain global financial systems of scale and opportunity.
Through the late 80's and 90's L'Oreal made multiple successful U. S. purchases that loaded the spaces in the provider's product offerings and founded their three main partitions of functions. In 2k, in an effort to strengthen their extravagance products range, the company produced the purchase of the remarkably touted specialist beauty organization Kiehl's. Kiehl's was not only a good acquisition because of its cult following and previously established special image, it also strengthened L'Oreal's inadequate location in the high-end, specialty retail outlet segment of business. Although Kiehl's provides considerable income potential for the near future, the brand's business model is usually inherently diverse from that of the other brands in L'Oreal's profile. Typically, the other brands that L'Oreal provides acquired have been completely mass-marketed and widely given away which allows those to be marketed and bought from existing retail outlets around the world. Kiehl's, on the other hand, is usually an exclusive product that is only sold in niche or sophisticated stores without any major marketing initiatives. Because the Kiehl's company is more suited to specific neighborhood preferences when compared to a larger global strategy, the main problem facing L'Oreal is that they must choose to manage a global reach of Kiehl's and find a way to incorporate the line to their existing the positive effect strategy without losing the honesty and distinctive nature of the brand.
II. Relevant Theory
This situatio involves choosing what was essentially a local company (Kiehl's in NYC) to the global market. As such the kind of theoretical strategy would be standardization versus modification of products intended for the global market, and, related to that, the proper structural type for the organization to follow this approach – viz., multidomestic or global. L'Oreal needs to decide about the future of Kiehl's – whether to treat this an American (or more specifically, a NYC brand) or leverage its popularity to the global markets. In a decision such as this, L'Oreal must consider the void of preserving Kiehl's brand name, marketing, etc . (i. e., the positive effect of the Kiehl brand) or customize Kiehl's to suit neighborhood tastes (customization). Once which includes has been determined, L'Oreal has to decide on the...