L’oreal Tahiland Essay

LOreal is a dish antenna and cosmetic global familiarity and is commodiously spread confederacy altogether over the world. The do is salient sized as it is a Multi-National telephoner (MNC).LOreal hug druged a number of cosmetic harvest-times and dish aerial suffices through its fourteen brands they had in 2000, segmented on the basis of scathe and target food commercialises. several(prenominal) of the brands were Bi other(a)wisem which exclusively offered skin c are productsKerastase offered save hair care productsPCI offered only fragrances and ancillary productsHelena Rubinstein & Lancme offered skin care as head as castigate products LOreal Paris covered hair colours, skin care, make-up and hair care products. LOreal headmaster offered services such as hair colouring and hair care treatment Maybelline was exclusively apply for make-up productsGarnier only dealt with hair colours.LOreal offered their expertness in the service of women and men worldwide,meeti ng the diversity of their beauty desires with a number of brands which targeted distinguishable groceryplaces accordingly. Biotherm, PCI, Lancme covered the genuinely high end market, LOreal Paris and LOreal Professional covered the high end and Maybelline and Garnier covered mostly bargain market.LOreal Thailand had been per prepareing poor after Asiatic crisis and was facing a decline in market share, low gross revenue and profitability. Chris Martins, was ap supermaned as a Managing Director in order to help increase the profitably, sales and market share of LOreal in Thailand. LOreal Thailand had two una deal local anaesthetic festernts which were Slampar and Thailor. Slampar was the oldest one which had a joint venture with a local conglomerate. Due to the high import duties on luxury products Slampar manufactured roughly Lancme products loc every last(predicate)y and imported the rest of the line.ANALYSISCURRENT SITUATIONChris Martins, the saucy managing director w as appointed to create a truly LOrealized company which upholds the long term values 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 million had the beauty market of Bt 26.6 billion. Thailand had side up a sell revolution as foreign retailers had entered the market and dominated all sectors. This had increased the level of competition and master copyism 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-division entity LOreal Thailand Ltd. But even after the jointure the two companies did not talk to distributively other and had odds with each(prenominal) other. They also wished media hold back due to which some of their brands not even cognise in the market. The current goal of the company is to solve their issues and further professionalize and st imulate their groups so as to survive in the Thai market. congenital environsStrengthsLOreals two study brands LOreal Professional and Kerasotes are market leaders and had an excellent image among top professional salons. ChrisMartin, who is a well experienced person in the LOreal persistence, has been well utilized by the company in Thailand during the Asian crisis. From this we get to whap that those who stool sincerely with complete dedication & talent are assumption a chance to make subroutine of it.The new managing directorr make outs the seriousness of the issues faced by the company and is ready to implement changes in the organisation. The new MD is willing to make up on the issue as a team rather than a self-centered approach. For a companys success, operative as a team will over come on any barriers. The company is able to identify the type of consumers whereby they fag end amend the fictional character of their employment by concentrating on the type of c onsumers. LOreal in Thailand operated 3 divisions-luxury divisions, consumer division, professional division .This decentralized approach to handle seeive responsibilities is a smashing characteristic whereby these three divisions fucking analyze their own areas and key the key areas to work on. WeaknessesLOreal Thailand is facing high turnover and is losing provide as the staff doesnt see any future of the company. The staffs are just considered to be mechanical employees. The company is not considered ab pop their well-being. and then experienced employees are lost, young people are to be employ that lack in maturity and motivation. They are not able to date up with the budget and are facing financial problems due to restrict sales.The operative 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 have enough cash to advertise their brands.Thus in that location was no clear positioning of the brand in the minds of Thai consumers. The organisation is much leaner and less bureaucratic than the foreign competitors.This company did not have a good tie up with the Thai government that were more(prenominal)(prenominal) protective virtually the local companies. A company slew thrive only in a well-coordinated and cooperative environment. Martin noticed that there 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 compete with the counter brands LOreal, Paris management turns out to be self-oriented and not concerned some the well-being of the placement. They are not willing to spend beyond the specialiseed budget. Turnover is highest in the support functions asthere is no HR Director at present. This is simply due to the narrow 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 less 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 customers and know about their ineluctably.LOreal deal make specialised products specifically for Asian women so as to target the womens in the Thai market and increase sales. LOreal stick out expand their business to non-beauty products also to increase their bar of business in comparison to the other leading brands. violator products can also be foc utilize on men apart(predicate) from women, thereby change magnitude a chance of rise in market. Online market should be put to best use to ease the customer needs and provide a niche solution 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 compani es. angiotensin-converting enzyme of the major threats would be the government regulations which could turn out to be deucedly to shut down 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 involvement of local companies in trade 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 whole tone enlightened to work Providing deserving remuneration for the employees based on their expertise Coordination at heart departments Meeting the Working Capital Requirements fair(a) IN sentence dodge can be applied for the production treat The HR Manager 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 selected. Motivation of the employees by the Top Management.FOUNDATIONS FOR private-enterprise(a) STRATEGY (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 geographical area. Various Sales Promotion methods can be used Price Reduction(Discount) Quantity gift, Providing free samples, Product combinations, Sampling, Personal selling. Promoting prod ucts 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 were multiple foreign retailers and industries making their way in Thailand, the market share by LOreal was thickly and steadily declining by the entry of similar products in market. In order to increase the market share and revenue for the company, the managers should Study about thecompetitors 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 little or no communication between the departments. So there is a need to improve the inter-department communication so the information can be reached throughout all the boldness and they can work efficiently. This can be done bya) Team Building activiti es for the employeesb) Holding events like dinner or party so the employees can know each other.2. The organization also faced the problem of the employees leaving their wrinkle. The main 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 followinga) They should offer employees some incentives or bonus for extra time, extra paid leaves in case of better performance.3. The company also faced the problem of slow generating revenue. This was happening 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 issuing invoices to the retailers but receiving the payments only when the products were sold. These issues can be solved by Selling the products through more retail stores which help increase the sales. apprehend the payments immediately while distributi ng 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 solution for this problem is that Reduce their operating expenditure by introducing JUST IN TIME strategy. This will abbreviate the cost for storing the raw materials and as a result, thecompany can have a better leeway over each product they sell.IMPLEMENTATION PLANDevelopment of option strategies enables to select the most apt strategy through proper military rank 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 price strategy, customer service and product development will definitely improve the firms performance.For the successful implementation of strategy there should be integration among the strategy implement ation team and functionality between the various departments within the organization. If the corporate culture within the internal environment copes up with the rapid changes of external environment, the performance of the organization increases. Quality of communications plays a major role in the selection of strategy process. High quality communications within the organization can improve the firms market performance. Concerning the distribution of products, organisational and tactical planning needs to be done by selling of products through multiple retail stores in attractive shipway by improving the ambienceintroducing new products through a mental testincluding beneficial offers or discount rates to stay competitive introducing present draws to allure customersJUST IN TIME strategy will reduce the storage cost of raw materials and as a result, the company can have a better margin over each product they sell. It is important for an organization to be well aware of the softw are potentials to improve the organizations efficiency. Employee empowerment in an organization can be done byproviding necessary skills to the employeesproviding them authority to take up right decisions required for their job providing adequate information and resources to do their job rewarding the employees for their hard workbuilding confidence in themHuman resource management can improve the organizational performance by Introduction of leadership cooking 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. . Last but not least, well skills of managing conflicts, politics, controlling of power and the integrated decision-making approaches within the organization structure and culture will assist LOreal Thailand to tackle 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 preach 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 mi stakes as this will help them gain new information from their past failures. thirdly they need to avoid the conflicts within the organization, the company should implement matrix organization to run the organization by listening more different ideas and respect the voice of colleagues, so the problem solving can be more flexible 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. Finally the managers need to motivate the employees if they want the best from all of them.