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L'Oréal's Global Strategy Challenges

L'Oreal faces several disadvantages with its global approach. High competition from other cosmetics brands worldwide challenges L'Oreal to continuously innovate its products. Cultural differences across countries can also hinder L'Oreal's marketing efforts if local customs and languages aren't considered. Additionally, the significant costs of marketing research, hiring local experts, and ensuring regulatory compliance in each new market increase the challenges of operating globally.

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Vivienne Rozenn Layto
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1K views2 pages

L'Oréal's Global Strategy Challenges

L'Oreal faces several disadvantages with its global approach. High competition from other cosmetics brands worldwide challenges L'Oreal to continuously innovate its products. Cultural differences across countries can also hinder L'Oreal's marketing efforts if local customs and languages aren't considered. Additionally, the significant costs of marketing research, hiring local experts, and ensuring regulatory compliance in each new market increase the challenges of operating globally.

Uploaded by

Vivienne Rozenn Layto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

What are the disadvantages to L’Oréal’s global approach?

L'Oréal is a French company that sells cosmetics, hair care products, skin care
concoctions, and fragrances. The company’s global approach made it possible for them
to operate in 130 countries. According to Racoma (2019), the company is a worldwide
business leader. High competition is a major disadvantage to their global approach
since there are so many other brands all over the world that provides same quality
products. The beauty industry is very competitive. Other companies may produce
beauty products that are similar or maybe even better than L'Oréal. In this case, L'Oréal
must be able to continuously innovate and advance their products.
Another disadvantage is directed towards culture since they are operating
worldwide. They may an instance wherein their policies affect the operational risks
towards global opportunity. According to Quain (2019), cultural differences in other
countries can derail their marketing efforts. Some countries don’t allow certain types of
advertising which may limit the company’s ability to market their products. Language
differences may also be a problem in their marketing message if they won’t hire
language experts in the country, they are in.
Even though L'Oréal is now a rich company, one disadvantage that they might
have already encountered is the high cost investment in doing marketing research for
the global approach. Quain (2019) also stated that setting up their company overseas
required them a significant amount of time, effort, and research of the local market.
Another expense is hiring a local expert in that country to fully understand the culture.
They will also have to handle foreign employment contracts and compliance regulations
because they will high local employees
The last disadvantage is the compliance risk. In global approach, L'Oréal is
continuously expanding their business and operating to new countries. Entering a new
market is very complicated must adapt and operate accordingly to the country’s
regulations. Every country has its own regulation and L'Oréal must be able to follow it to
avoid any conflicts with the country they are operating in. Remaining compliant is key to
successful global approach. If ever the company has failed to remain compliant, serious
cases and costs that is vital to the company may happen. Thus, L'Oréal must partner
with the right people who will help them remain compliant and ensure the correct
procedures are in place from day one. (Arthur, 2019)
References:
Arthur, L. (2017, September 26). The Disadvantages of Organizations Going Global.
Retrieved from [Link]
[Link]

Quain, S. (2019, January 28). Advantages & Disadvantages of a Global Strategy.


Retrieved from [Link]
[Link]?
fbclid=IwAR28k78wv8Fx6dM_6r_NiS01n6DQ29M_DQ3irEXXfJ6FnWC844DusAF-ubQ

Racoma, B. (2019, August 21). How L’Oreal Adapts to Different Cultures. Retrieved
from [Link]

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