The Beauty of Global Branding c.1999
Amy Batchu :: Stuart School of Business :: Spring 2009
''urban American chic''
"pioneered new ground"
''dares to sell hair color other than black''
1996
1997
"stable meets streetwise"
"radical experiment"
1998
1999
2000
1907
2009
($758 MIL.) Maybelline
L'Oreal Excellence
$768 MIL.
96 year-old Brand
Retail Operation
Acquires American brand
Expands rapidly in India
Profits rise 12%
Relaunches Helena Rubinstein in world city centers
Opens New York spa
Organization History Amy Batchu :: Stuart School of Business :: Spring 2009
Aspirational Beauty Inclusiveness
MISSION: At L’ORÉAL, we believe that everyone aspires to beauty. Our 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 our business, and to the working lives of our employees. We are proud of our work.
Organization Core Values Amy Batchu :: Stuart School of Business :: Spring 2009
Individual Expression
VISION: • Recognize that two beauty cultures are prominent--French and American, empires thrive best by embracing both • Place effort towards diversifying the cultural origins of our brands so they embody their country of origin • Explore acquisition targets elsewhere in Asia, as a springboard for expanding into Africa • Be the coolest of luxury brands
GOALS: • Promote their U.S. origins of all Maybelline products • Push the brand into more than 70 countries • Mix and manage stable upscale beauty with streetwise new products
Organization Core Values Amy Batchu :: Stuart School of Business :: Spring 2009
COMPETITORS
"a fiercely competitive industry" P&G Clinique Estee Lauder. Stila Shiseido Co. Beiersdorf
PRODUCTS
"a transforming trendy portfolio" 23 global brands* 628 patents filed* Maybelline The Body Shop Express Finish Ralph Lauren Fragrance Diesel Fragrance
MARKETS
"The United Nations of beauty" 130 countries* Exploring acquisition targets elsewhere in Asia Expanding in India, to prepare for Africa Ranks No. 1 in Mexico with a 28% spurt in sales *Figures from 2008
Organization Scope Amy Batchu :: Stuart School of Business :: Spring 2009
OPPORTUNITIES
STRENGTHS Reaching out to more people across a bigger range of incomes and cultures
Branding globally can speed growth in mature consumer-goods companies
Embracing healthy doubts to stay on top
Profiting on middle class growth, emerging markets
Allowing cross-fertilization
Conquering Japan's $25.4 billion cosmetics market
WEAKNESSES
THREATS
Possesses a poor market position in Japan
Leading globally in every segment Possible entrant, Amazon.com of the industry of the beauty business
Diesel and Ralph Lauren fragrances are the only masculine marketed brands
Asia's economy is a mess, Latin America is unstable
Cannibalizing mature brands by introducing new products
Japanese brand, dominant at home and expanding
Attack from big and small competitors
SWOT Analysis Amy Batchu :: Stuart School of Business :: Spring 2009
Problem
CORPORATE: Need to stay ahead in the game as powerful rivals seek to play the global branding game
Advice
Should leverage knowledge in other industries Should get out of global brand game Should develop e-commerce /distribution
Logic
Must capture insights to sell and profit from non competitors Must understand the global brand game is becoming homogenous Must realize the changing sales models and customer expectations
Challenges & Recommendations Amy Batchu :: Stuart School of Business :: Spring 2009
Problem
CORPORATE: Need to stay ahead in the game as powerful rivals seek to play the global branding game
Advice
Should leverage knowledge in other industries Should get out of global brand game Should develop e-commerce /distribution
CORPORATE: Need to manage its evergrowing stable of upscale beauty brands while mixing it with street-wise new products Should slow down with the acquisitions Should, if needed, acquire masculine brands
Logic
Must capture insights to sell and profit from non Must not rely on external growth competitors in a global market, Must understand the global brand game is becoming homogenous Must realize the changing sales models and customer expectations
Must offer masculine products if the mission states "to help women and MEN"
Challenges & Recommendations Amy Batchu :: Stuart School of Business :: Spring 2009
Problem
CORPORATE: Need to stay ahead in the game as powerful rivals seek to play the global branding game
Advice
Should leverage knowledge in other industries Should get out of global brand game Should develop e-commerce /distribution
CORPORATE: Need to manage its evergrowing stable of upscale beauty brands while mixing it with street-wise new products
Need to penetrate Japan's market, regulations, protectionist distribution system and strict scrutiny by health and safety authorities
Should slow down with the acquisitions
Should research Japanese business myths/barriers to doing business, analogous situations in other industries
Should, if needed, acquire masculine brands
Logic
Must capture insights to sell and profit from non Must not rely on external growth competitors in a global market, Must understand the global brand game is becoming homogenous Must realize the changing sales models and customer expectations
BUSINESS:
Must offer masculine products if the mission states "to help women and MEN"
Must learn the way of the east in business etiquette and regulations, apply similar methods to African market
Challenges & Recommendations Amy Batchu :: Stuart School of Business :: Spring 2009
radical experiment knowledge gained in the street
INNOVATION 67,662 employees
130 countries cosmetics
men and women consumers Lindsay Owen-Jones
PEOPLE
dermatology
STRUCTURE The Body Shop
executives
coolest of luxury brands
PRODUCTS urban American chic street-wise
5 Dimension Analysis Amy Batchu :: Stuart School of Business :: Spring 2009
FINANCIALS double-digit growth
stock soared 900%
EFFECTIVE
goal: push brand to 70+ countries success: brand exists in 130 countries
EFFICIENT
human: Street knowledge passed to executives financial: Body Shop (3.9%) sales physical: North America 23% sales, (22%) production
GROWING
"decade of double-digit growth" "stock has soared 900% in the '90s"
STABLE
Proceed with Caution: "cross fertilization" "healthy doubts" "radical experiment"
Overall Evaluation Amy Batchu :: Stuart School of Business :: Spring 2009
Organization History ''urban American chic''
"pioneered new ground"
''dares to sell hair color other than black'' 1996
1997
Aspirational Beauty
"stable meets streetwise"
Inclusiveness
"radical experiment" 1998
1999
Individual Expression
2000
INNOVATION
OPPORTUNITIES
Amy Batchu :: Stuart School of Business :: Spring 2009
STRENGTHS PEOPLE
STRUCTURE
Reaching out to more people across a bigger range of incomes and cultures Embracing healthy doubts to stay on top Allowing cross-fertilization
Branding globally can speed growth in mature consumer-goods companies Profiting on middle class growth, emerging markets Conquering Japan's $25.4 billion cosmetics market
WEAKNESSES
PRODUCTS
FINANCIALS
THREATS
Possesses a poor market position in Japan
Leading globally in every segment of the industry
Possible entrant, Amazon.com of the beauty business
Diesel and Ralph Lauren fragrances are the only masculine marketed brands
Asia's economy is a mess, Latin America is unstable
Cannibalizing mature brands by introducing new products
Japanese brand, dominant at home and expanding
Attack from big and small competitors
5 Dimension Analysis
...leverage knowledge in other industries ... get out of global brand game ... develop e-commerce/ distribution ... slow down with the acquisitions, if needed, acquire masculine brands ...
Organization Overview EFFECTIVE EFFICIENT GROWING STABLE