Introduction
This report is based on the ‘L’Oreal: Expansion in China’ case study. L’Oreal is a successful French cosmetic company that involved into many different international markets. This report will discuss how L’Oreal gets into the Chinese cosmetic Market and the strategic to develop their brand in the Chinese market. L’Oreal acquires two famous Chinese cosmetic brands which are Yue-Sai and Mininurse. It is in order to entrance the market quickly and sales the most suitable products. The aim of this report is to define the challenge L’Oreal has been faced. Then it describes how L’Oreal managing their strategic in Chinese market. In addition, it gives an accommodation which could help L’Oreal overcoming these challenges.
This course of action could help L’Oreal kill two of the competitors. However, it will cause a negative impact for running the local company. Li Zhida and Yue-Sai Kan play a key role in the companies. They set the strategy for the company and known the features and advantages of their products. It might lead to an upheaval in the company after they left and negative for it development. Otherwise, Li Zhida and Yue-Sai Kan has a great talent and plenteous experience is cosmetics area that why they can run the company very well previously. They know the environment of Chinese market also what Chinese customer needs. If they can stay in the company, they can help L’Oreal to reduce the risk in the market.
Brands crashed
As I have mentioned above, L’Oreal owned 14 brands in China and divided their products into four different types of products. However, it could still crashed in the same target market. For instance, Lancome, Biotherm and Helena Rubinstein are all produce the luxury products. The products could be similar and also the distribution chain which might become the competitor. In addition, luxury products market is smaller than the mass market. As a result, it might impact the sales for each brand and cause financial losses. These brands are hardly to development.
Too many brands to manage
Thirdly, the structure and strategy are quite different in different companies. So, L’Oreal can’t manage all the brands in the same way. However, it is