Investigation of the organisational structure of L’Oreal Group

 Introduction

The purpose of this report is to assess the LOreal Group which is a global business organisation. This report investigates the operation of LOreal Group that it illustrates the historic context and the development of the group. The historic context Over a century, LOreal has grown from a small family business to the worlds leading cosmetics company. It operations in more than 150 countries and regions, with 283 offices, 42 factories and more than 100 agents and employs 50,000 people in the world. Moreover, LOreal Groups global sales reached 140 million euros last year that it achieves 19 years of consecutive double-digit profit growth. It is also the most admired French companies, and one of the Fortune Global 500 companies. LOreal was established in 1909, young chemist Eugene Schueller sets up the company by the first hair dyes, which he designs, produces and sells in Pairs that will later become the LOreal group. Due to the highly competitive domestics markets, the Group starts to expand internationally in 1957. It executed acquisitions of strategic brands that many emblematic products come into being.

Furthermore, a product in different countries may be at different stages in the product life cycle. There may be an opportunity for the company to extend the life cycle of its products. Besides that, the company motto is seize new opportunities, mainly driven by the significant investments made by the group in the field of research. From 1984 to 2000, these succeeding twelve years are marked by a great period of growth to LOreal. Alongside these strategic product launches that succeed in strengthening the Groups brand image. Especially in 1988, under the management of Lindsay Owen-Jones, a truly outstanding director, the Group could completely change in scope to become the world leader in cosmetics through the worldwide presence of its brands and strategic acquisitions. For the 21st century, the LOreal with a powerful portfolio embraces diversity in its global growth agenda. Headed since 2006, the Group continues to make new acquisitions to cover the worlds varied cosmetic needs, and to undertake new socially responsible in the interests of sustainable development for all.

The development of the LOreal Group LOreal developed a series of acquisition strategies to entering the international market. We only purchase local brand which has been formed, or to become a global brand, or can be integrated with existing global brand. the present Chief Executive Officer Jean-Paul Agon in LOreal said. For example, the acquisition of Lancome brand which it has sales in 160 countries in 1964 is the first step for LOreal goes to the cosmetics empire. Furthermore, it purchased Garnier in 1965 that LOreal has been set which makes positioning of the auxiliary with organic hair care products. In 1989, it acquired U.S. skin care brand-Helena, and later with George Armani signed a licensing agreement to enable LOreal to be the fashion industry to promote this great brand. Moreover, win the Indian market in 1994. It becomes the first wholly-owned subsidiary in India of international cosmetics group. For the acquisition of the brand, in order to retaining its essence and traditions, LOreal created a French-style elegance of its packaging to the international market.

Such as LOreal acquired Maybelline brand in 1996 which with low market share, then they moved Maybelline headquarters from Memphis to New York. Because of Maybelline trademark into overseas markets after the addition of New York word, it let consumers associate their products with New York fashion image that their products should represent the latest fashion, it quickly enter into the market. 4. The organisation structure In LOreals inception, it is just a one-person business, of very basic structures. During its expansion period, the business has sectional managers as the company expands. It not only needs to take advantage of the overall competitive advantage, but also maintains the relative independence of different brands. It has different function departments such as the research and development, production, marketing and human resources to every aspect of the diversity value chain.

However, China as an emerging market has attracted lots attentions of LOreal. They regarded China as the business supply center in the Asia Pacific region and set up the LOreal Shanghai Chinese companies. It has a matrix structure of the organisation. The HYPERLINK http//en.wikipedia.org/wiki/Matrix_management o Matrix management matrix structure groups employees by both function and product. In this structure, there can be seen the different product categories according to the corresponding provisions of the various departments of power and responsibility in LOreal. Because of the local managers established direct contact with consumers, therefore, this structure can more quickly and effectively meet the challenges of competitors or potential competitors.