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Loreal Porter 5 Forces Model
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Porter 5 Forces Model...about Loreal company...

Porter 5 Forces Model...about Loreal company...

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Loreal Porter 5 Forces Model Presentation Transcript

  • 1. UNIVERSITI TEKNOLOGI MARA MELAKA CITY CAMPUS MGT 657: STRATEGIC MANAGEMENT BY: NOOR AZUREN MOHD TAIB (2009611798) NORAZLINA IBRAHIM (2009688108) AFZA FAKHIRA MD NAJIB (2009454276) AMIRA MOHD ZULKIFLY (2009480838) MUNIRAH MUHAMAD ROSLI (2009169955) BBAM 5A
  • 2. HISTORY OF L’OREAL COMPANY OVERVIEW PORTER 5 FORCES MODEL
  • 3. HISTORY OF L’OREAL Founder: Eugene Schueller Career: Scientist, inventor, young chemist & natural entrepreneur Year founded: 1909 First step: The model takes shape 1909 - 1956 L’oreal on the road to greatness 1957 - 1983 Becoming number one in beauty industry 1984 - 2000 The diversty of beauty throughout the world 2001 - Present day
  • 4. HISTORY OF L’OREAL COMPANY OVERVIEW PORTER 5 FORCES MODEL
  • 5. COMPANY OVERVIEW ABOUT US MISSION THE CEO BRANDS
  • 6. ABOUT US ABOUT US MISSION THE CEO BRANDS At L'Oréal, we have made cosmetics the focus of all our energy and know-how for nearly a century. We are fully committed to putting all our expertise and research resources to work for the well-being of men and women, in all their diversity, around the world. WELCOME TO L’OREAL Products distributed in 130 countries Worldwide leader in cosmetics 23 global brands 5 key expertise: Hair colour, hair care, skincare, makeup & fragrances 66, 600 employees worldwide
  • 7. COMPANY OVERVIEW ABOUT US MISSION THE CEO BRANDS
  • 8. MISSION ABOUT US MISSION THE CEO BRANDS For more than a century L’Oréal has been pushing back the boundaries of science  to invent beauty and meet the aspirations of millions of women and men . Its vocation is universal: to offer everyone, all over the world,  the best of cosmetics  in terms of quality, efficacy and safety,  to give everyone access to beauty  by offering products in harmony with their needs, culture and expectations.  With the opening up of the emerging markets, L’Oréal’s mission is broadening in response to the vast diversity of populations . The whole company is focused on this new horizon: teams enriched by their cultural diversity, a  portfolio of international brands present in the different distribution channels, and research  that is capable of grasping the world’s complexity. The exploration of  new scientific and technological territories is being enriched by this global dimension .  Knowledge of different cultures and rituals worldwide enables the laboratories to anticipate and invent the products of the future. 
  • 9. COMPANY OVERVIEW ABOUT US MISSION THE CEO BRANDS
  • 10. THE CEO ABOUT US MISSION THE CEO BRANDS JEAN-PAUL AGON
  • 11. COMPANY OVERVIEW ABOUT US MISSION THE CEO BRANDS
  • 12. BRANDS ABOUT US MISSION THE CEO BRANDS CONSUMER PRODUTCS L’OREAL PARIS GARNIER MAYBELLINE NEW YORK PROFESIONAL PRODUTCS L’OREAL PROFESIONAL KERASTASE REDKEN GIORGIO ARMANI LANCOME RALPH LAUREN BIOTHERM DIESEL LUXURY PRODUTCS LUXURY PRODUTCS VICHY
  • 13. HISTORY OF L’OREAL COMPANY OVERVIEW PORTER 5 FORCES MODEL
  • 14. HISTORY OF L’OREAL COMPANY OVERVIEW PORTER 5 FORCES MODEL RIVALRY AMONG COMPETITIVE FIRMS POTENTIAL ENTRY OF NEW COMPETITORS POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS BARGAINING POWER OF SUPPLIERS BARGAINING POWER OF BUYERS
  • 15. RIVALRY AMONG COMPETING FIRMS
    • Focus on competitive advantage
    • Strategies by the firm
    • Conditions that cause high rivalry among competing firms:
    • High number of competing firms
    • Consumer switch brands easily
    • Barriers entering market low
    • Rival sells similar product/service
  • 16. POTENTIAL ENTRY OF NEW COMPETITORS
    • Barriers to entry are important
    • Quality, pricing, and marketing can overcome barriers
    • New firm sometimes easy to entry the industries because of high-quality products, lower price, and substantial marketing resources.
  • 17.  
  • 18.  
  • 19. POTENTIAL ENTRY OF NEW COMPETITORS
    • Loreal’s competitors are cover girls, avon, revlon, and so on
    • Besides, local competitors such as safi, sendayu tinggi, and so on.
    • The threats : Loreal’s products are luxuries that could be hurt by an economic downturn.
  • 20. POTENTIAL ENTRY OF NEW COMPETITORS
    • … however…
    • They are able to be global and to act local (market leader)
    • Suit Research & Development to different target groups
    • High quality
    • Effective distribution system
  • 21. POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS
    • Substitute products refer to products in other industries.
    • A threat of substitutes exists when a product’s demand is affected by the price change of a substitute product.
    • A product price elasticity is affected by substitute products.
  • 22. POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS
    •   The number of chemicals in shampoo and other bath and body products is frightening. Your skin is the largest organ on your body. Whatever gets put on your skin gets absorbed into your body, into your bloodstream and into your organs, as has been proven by many studies. Essentially, whatever is toxic to put in your mouth is toxic on your skin as well.
  • 23. Example : VS
  • 24. Example : vs
  • 25. BARGAINING POWER OF SUPPLIERS
    • Supplier are the business that supply material and other product into industry
    • If supplier have high bargaining power, company less attractive
  • 26. BARGAINING POWER OF SUPPLIERS
    • Bargaining power high when :
      • Many buyer and few dominant supplier
      • Undifferentiated, high valued product
      • Switching cost
      • Substitute product are unavailable in the market place
      • The powerful of supplier to an industry, the less profitable the industry tend to be
  • 27. Example
    • Raw Materials
    • Packaging
    • Point of sales (POS)
    • Equipments
    • Loreal has many suppliers in processing
    • their product. So, their supply bargaining
    • power is low
  • 28. BARGAINING POWER OF CONSUMERS Bargaining Leverage Buyer Volume Buyer Information Brand Identity Price Sensitivity Threat of Backward Integration Buyer Concentration vs. Industry Substitute availability
  • 29. BARGAINING POWER OF CONSUMERS Buyers are POWERFUL if: Buyer are WEAK if: Buyers are concentrated – few buyers with significant market share Producer can take over own distribution/retailing Product is standardized Unique product and buyer cannot easily switch to other product Buyer posses a credible backward integration threat – to buy producing firm or rival Many buyers – has no influence on product or price
  • 30.