L’oreal Tahiland Essay

LOreal is a dish and cosmetic global party and is vastly spread caller all everywhere the world. The company is large surface as it is a Multi-National Company (MNC).LOreal offered a crook of cosmetic products and beauty services through its fourteen brands they had in 2000, segmented on the root of price and target trades. Some of the brands were Biotherm which exclusively offered peel cargon productsKerastase offered except bull c atomic number 18 productsPCI offered only(prenominal) fragrances and ancillary productsHelena Rubinstein & adenosine monophosphate Lancme offered skin care as well as touch on-up products LOreal capital of France covered cop colours, skin care, make-up and hair care products. LOreal Professional offered services such as hair colouring and hair care treatment Maybelline was exclusively used for make-up productsGarnier only dealt with hair colours.LOreal offered their expertise in the service of women and men worldwide, meeting the ch ange of their beauty desires with a number of brands which targeted variant trades accordingly. Biotherm, PCI, Lancme covered the very extravagantly gear end mart place, LOreal Paris and LOreal Professional covered the high end and Maybelline and Garnier covered mostly mass commercialise.LOreal Thailand had been performing low after Asian crisis and was facing a decline in commercialise pct, low gross gross sales and profitability. Chris Martins, was appointed as a Managing Director in stray to help increase the profitably, sales and market share of LOreal in Thailand. LOreal Thailand had dickens diametrical local agents which were Slampar and Thailor. Slampar was the oldest one which had a joint venture with a local conglomerate. Due to the high upshot duties on luxury products Slampar manufactured most Lancme products locally and imported the balance wheel of the line.ANALYSISCURRENT SITUATIONChris Martins, the new managing director was appointed to get to a trul y LOrealized company which upholds the long term set and deliver healthy profitable growth. The Asian crisis had negatively affected the market share, sales and profitability of LOreal Thailand. Thailand with a population of 63 meg had the beauty market of Bt 26.6 billion. Thailand had faced a retail revolution as foreign retailers had entered the market and dominated all sectors. This had increased the level of controversy and professionalism for LOreal Thailand as well as local companies.LOreal had two entities in Thailand, Siampar and Thailor which were later merged to form a single multi- representative entity LOreal Thailand Ltd. But even after the merger the two companies did non piffle to each other and had odds with each other. They withal wanted media support im dropable to which some of their brands not even known in the market. The current finish of the company is to solve their issues and further professionalize and stimulate their teams so as to survive in the Thai market. indwelling environmentStrengthsLOreals two major brands LOreal Professional and Kerasotes are market leaders and had an excellent image among top professional salons. Chris Martin, who is a well see person in the LOreal industry, has been well utilized by the company in Thailand during the Asian crisis. From this we get to know that those who make for sincerely with collar dedication & talent are given a fortuity to make use of it.The new managing directorr knows the seriousness of the issues faced by the company and is ready to implement changes in the formation. The new MD is go awaying to progress to on the issue as a team rather than a self-centered approach. For a companys victor, working as a team will overcome any barriers. The company is able to rate the type of consumers w presentby they feces mend the part of their air by concentrating on the type of consumers. LOreal in Thailand operated three divisions-luxury divisions, consumer divisio n, professional division .This decentralized approach to handle respective responsibilities is a good trace whereby these three divisions lav analyze their own areas and find the key areas to work on. WeaknessesLOreal Thailand is facing high turnover and is losing supply as the staff doesnt see any future of the company. The staffs are just considered to be mechanical employees. The company is not considered closely their well- be. Thus experienced employees are lost, young people are to be hired that lack in maturity and motivation. They are not able to catch up with the cypher and are facing financial lines collect to limited sales.The working milieu in the organistaton is not inspiring and motivating for the employees as well as the reward system is out of touch with the market. They lack media support as they do not crap enough funds to advertise their brands.Thus thither was no clear government agencying of the brand in the minds of Thai consumers. The organisation is much leaner and less bureaucratic than the international competitors.This company did not have a good tie up with the Thai validation that were much protective about the local companies. A company can thrive only in a well-coordinated and cooperative environment. Martin noticed that in that location was bitter rivalry among most of the retail sectors. The business was restricted to beauty products only.The company had to think out of the box in order to manage with the counter brands LOreal, Paris management turns out to be self-oriented and not concerned about the well-being of the organization. They are not willing to overhaul beyond the assigned figure. Turnover is highest in the support functions as in that location is no HR Director at present. This is solely due to the trap hiring criteria.External EnvironmentOpportunitiesLOreal Thailand has the opportunity to come up in the market as it has a number of good quality brands which lack awareness among consumers due to l ess advertising They could use direct sales for make-up and skin care products instead of retail sales as this would help them to have direct interaction with their clients and know about their rents.LOreal can make specialised products specifically for Asian women so as to target the womens in the Thai market and increase sales. LOreal can expand their business to non-beauty products also to increase their bar of business in comparison to the other leading brands. Beauty products can also be focused on men apart from women, thereby increase a chance of rise in market. Online marketing should be put to best use to ease the node needs and provide a niche stem in this technology driven generation. ThreatsLOreal Thailand has a lot of intensive competition in the beauty market due to the entrance of many strong foreign companies. One of the major curses would be the government regulations which could turn out to be deadly to shut carry out the business as the government tends to be more protective about their local companies. When similar products are introduced in market by different companies, consumers tend to choose the product with minimal price to satisfy their needs. The meshing of local companies in marketing of cosmetics can be a threat to the mass-cosmetic marketing.STRATERGIC CHOICEMethods of Pursuing StrategyExternal Environment AnalysisAnalysing & Studying the current market situation Current competitors in the market (Existing companies and new foreign companies) Finding out the Current Trends in the market The Current Pays based on the market condition Identifying the customer needs, what is being sold in the market and the products having high demand in the market. internal Environment AnalysisAnalysing the Internal Environment Improving the working Environment of the employees i.e. creating a positive office ambience in which the employees feel initiate to work Providing deserving remuneration for the employees based on their expertis e Coordination indoors segments Meeting the Working Capital Requirements JUST IN TIME dodging can be applied for the production process The HR jitney should be broad minded and should recruit new staffs and assign their position in the organisation based on their area of expertise and only skilled workers should be apportioned. Motivation of the employees by the Top Management.FOUNDATIONS FOR COMPETITIVE schema (Marketing Strategy)Promoting their products with the help of mediaSpecifically advertisements in televisions through which a large number of people can be reached over a vast geographic area. Various Sales Promotion methods can be used impairment Reduction(Discount) Quantity gift, Providing free samples, Product combinations, Sampling, Personal sell. Promoting products based on the customer needs (selected products having demand in the current market and excluding other products that are least preferred by the customers)STRATERGIC GAPExternal EnvironmentAs there we re multiple foreign retailers and industries making their way in Thailand, the market share by LOreal was slowly and steadily declining by the insertion of similar products in market. In order to increase the market share and revenue for the company, the managers should Study about the competitors strategy for sales and try to study the consumption of their products by different age groups. This can help them gain an additional advantage over other competitors. Internal Environment1. LOreal has different departments but there was very diminutive or no communication amongst the departments. So there is a need to improve the inter-department communication so the information can be reached throughout all the organization and they can work efficiently. This can be done bya) Team Building activities for the employeesb) Holding events like dinner party or party so the employees can know each other.2. The organization also faced the problem of the employees leaving their job. The ma in point here is that the employees didnt have a satisfying work environment and adding to that the un-satisfying wages. This problem can be solved by the questa) They should offer employees some incentives or bonus for extra time, extra paid leaves in courting of better performance.3. The company also faced the problem of slow generating revenue. This was adventure due to various factors. a) They were selling their products only through 2 types of retail outlets. This was not helping them to make the products in everyones reach. b)The company was exit invoices to the retailers but receiving the payments only when the products were sold. These issues can be solved by marketing the products through more retail stores which help increase the sales. Collect the payments without delay while distributing the products to the retailers. Marketing StrategyThe problem in marketing department was that it didnt have the sufficient funds for promoting more about their products. The solut ion for this problem is that Reduce their operating expenditure by introducing JUST IN TIME strategy. This will reduce the cost for storing the raw materials and as a result, thecompany can have a better margin over each product they sell.IMPLEMENTATION PLANDevelopment of alternative strategies enables to select the most apt strategy through proper evaluation of the success rate of each strategy. To make the selection of strategic process more effective, team members should have a clear understanding about the strategic goals thereby reducing uncertainties in decision making. Implementation of the pricing strategy, customer service and product development will definitely improve the unassailables performance.For the successful implementation of strategy there should be consolidation among the strategy implementation team and functionality between the various departments in spite of appearance the organization. If the incarnate culture at heart the internal environment copes up with the rapid changes of external environment, the performance of the organization increases. Quality of communications plays a major place in the selection of strategy process. High quality communications indoors the organization can improve the firms market performance. Concerning the scattering of products, organisational and tactical planning needs to be done by selling of products through multiple retail stores in attractive ways by improving the ambienceintroducing new products through a trialincluding right offers or discount rates to stay competitive introducing raffle draws to entice customersJUST IN TIME strategy will reduce the terminus cost of raw materials and as a result, the company can have a better margin over each product they sell. It is most-valuable for an organization to be well aware of the software potentials to improve the organizations efficiency. Employee potency in an organization can be done byproviding prerequisite skills to the employeesprovi ding them authority to slang up right decisions required for their job providing qualified information and resources to do their job rewarding the employees for their hard work structure confidence in themHuman resource management can improve the organizational performance by Introduction of leadership training programs and enhancing the skills and capabilities of the employees mentoring by the senior employees to give deep insight to the kind of work they are doing promoting positive attitudes and increasing motivation and job satisfaction increasing budget scales to allow experimentation within the company in order to take risks to meet the rapid changes of the external environment Allotting responsibilities to the employees so that they can make full use of their capabilities.These are the ways to improve the relationship of the employees within the company, thus producing highly committed employees in the development of the company.CONCLUSIONS AND RECOMMENDATIONSIn conclusion, LOreal is still the market leader in the cosmetic industry of Thailand because it is providing quality products to its customers. They need to pay more attention to the relationships within the organization and between Tailor and Siampar as this will help them achieve their goals in the future. . destruction but not least, well skills of managing conflicts, politics, controlling of power and the structured decision-making approaches within the organization structure and culture will assist LOreal Thailand to contract with the challenges and come with a positive financial performance in order to remain the leader of cosmetics industry in Thailand.We would like to recommend the following to LOreal Thailand, firstly that each department should have a different decision making processes. Secondly the Managers should and need to learn from their mistakes as this will help them gain new information from their past failures. Thirdly they need to avoid the conflicts within the organizati on, the company should implement matrix organization to onslaught the organization by listening more different ideas and respect the voice of colleagues, so the problem solving can be more negotiable and objective. Next the company should find out the current trends in the market and try to differentiate their product in order to face competitions. ultimately the managers need to motivate the employees if they want the best from all of them.