Loreal Case Study Example | Topics and Well Written Essays - 750 words

Loreal - Case Study Example Therefore, expansion became and necessity and acquisitions were the means to achieve this. Acquisitions allowed L’Oreal to operate globally, becoming part of the global economy. L’Oreal’s growth strategy was to acquire smaller companies that dealt in cosmetics and other beauty products, after which the acquired products would be assimilated and expanded from within the parent company. Acquisitions meant that the brands could be taken globally, benefiting L’Oreal’s overall brand portfolio. L’Oreal established that they lacked a competitive advantage over American rivals due to their shortage of resources in the cosmetics sector. Therefore, the cosmetics sector was a form of opportunity that would enable them to increase their returns beyond the average mark. Hence, improving the cosmetics portfolio was a major motivation for acquiring foreign cosmetics companies. The adoption began with company developed brands such as Club des Createurs de Beaute, L’Oreal Paris, L’Oreal Professional and Kerastase. L’Oreal adopted Garnier and Lancome Paris in the 1960s. In the 1980’s L’Oreal consumed popular American brands such as Redken, SoftSheen-Carson, Matrix, and Maybelline (which needed reinstallation). L’Oreal also strengthened its French brands by acquiring Ralph Lauren Fragrances, which enabled it to increase its international brand portfolio for customers of various demands and preferences. In the year 2000, L’Oreal acquired Kiehl’s, a company that dealt in high quality, expensive and highly demanded luxurious products. Kiehl’s was deemed a valuable acquisition that added authenticity to L’Oreal’s luxury collection. It also enabled L’Oreal to capture more opportunities in the Consumer Division. Due to its core competencies such as its R&D function and advertising campaigns, L’Oreal was able to reinstate Maybelline and many other smaller acquisitions, enabling it to develop a more attractively priced product that captured