L´oréal - External and Internal Risks
STRATEGIC MANAGEMENT
Family businesses
Business management
18.11.2014
Mikhail Nemilentsev
L’OREAL: EXTERNAL AND INTERNAL RISKS
L’Oréal is a french cosmetics and beauty company. It is the largest cosmetics company in the world and offers various products in this field and more especially hair care products (shampoo, care, colour, etc), sun protection products, make-up and perfumes. The group also carries out dermatological and biopharmaceutical research.
Main external risks of L´Oréal | Main internal risks of L´Oréal |
Economic slowdown | Quite high prices for the products |
High number of competitors on the market | Risk of internal control failure |
Increasing demand of organic products |
Following, the main external risks of L´Oréal which are mentioned above will be described.
Economic slowdown has a huge effect on the company because of decreasing revenues. Furthermore, the high number of competitors on the market makes it harder for L´Oréal to find a competitive advantage and therefore customers. Last but not least, the increasing demand of organic products makes it harder for L´Oréal to remain as an attractive brand for customers. All these are external risks for the company. To avoid that the risks are taking over, L´Oréal could develop an organic product line in their portfolio to serve the niche market of customers. Moreover, it is possible stand out from the market by creating a special competitive advantage.