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L’Oréal SWOT Analysis: Beauty Brand’s Strategy Breakdown

October 20, 2023 in Case Studies

Have you ever wondered about the origin of your favorite hair care/beauty product? How did the company’s strengths and weaknesses add to the company’s success and downfall? This article will analyze the brand’s strategy through the L’Oréal SWOT analysis.

We will look at a company breakdown of L’Oréal’s SWOT analysis. The hair beauty brand has a bunch of factors and strategies that contribute to its success in the cosmetic industry.

Continue sticking around to find out more about the SWOT analysis of L’Oréal. Today, we will list some of L’Oréal’s top competitors. Continuing to read this analysis will give you a better understanding of the company if you plan to compete against it in the same field.

About L’Oréal

Who created L’Oréal? Eugène Schueller created L’Oréal in 1909. Its headquarters are in Clichy, France. L’Oréal is one of the world’s largest and most well-known beauty and makeup labels.

L'Oréal SWOT Analysis

Starting with a small hair dye formula, L’Oréal is now one of the leading beauty companies. L’Oréal now has a wide range of products laid out for you based on various factors such as hair types, type of damage control for your hair, multiple color hair dyes, and so much more.

Over the many years, L’Oréal has expanded its range of products and reached many countries worldwide. The company has earned immense success in haircare, skincare, and cosmetics.

Visit: L’Oréal

Check this out: Gucci’s Marketing Strategy: How Did it Win Fashion?

L’Oréal SWOT Analysis: Strengths

They Create And Sell Great Quality Products

L’Oréal does not only sell local products that you can easily find at a departmental store, but they have evolved into creating luxury products for people who fancy owning or using luxury items from well-recognized brands.

L'Oréal products

Their products are not only of high quality but they are also cheap. The company assures that only its customers use the finest grade of products, which helps build trust. Building trust in the company and its products enables more sales to take place, benefiting the company.

Target Audience And Advertising

Since L’Oréal is such a big beauty brand, they can easily afford great professionals to shoot commercials for their products. Their editing skills are tremendous and minimalistic, which adds to the advertisement’s appeal.

L'Oréal SWOT Analysis

Not to mention, they also have celebrities like Aishwarya Rai Bachchan have been hired to represent the brand and influence potential customers to start buying it. Despite stiff competition, L’Oréal is leading in the industry regarding sales, etc.

They Have A Good Reach

Thanks to the brand’s popularity, it has grown over the years. L’Oréal is spread over 150 countries and is the parent company of a few well-known luxury staples brands. The more the brands, the more they reach, as they offer a vast range of products.

They create and sell products in large quantities, which makes it cheaper than spending your money on small amounts separately.

L’Oréal SWOT Analysis: Weaknesses

Prices Are Claimed To Be Unreasonable

Although most of L’Oréal’s products are reasonably priced, some premium or luxury items are highly-priced. This adds to their weaknesses because compared to L’Oréal rivals, these high prices may be less appealing to price-conscious potential customers.

L’Oréal works in a worldwide market, and foreign exchange rates can fluctuate without warning if it isn’t predicted correctly. These shifts might have an impact on the company’s pricing strategy.

They Have Tough Competition

You will have competition everywhere, especially if you are a brand as big as L’Oréal. Many of their competitors have similar products to those that L’Oréal offers. This makes it a possibility for the rival companies to have an advantage over L’Oréal.

The advantage they get is that they offer similar products at a cheaper rate. This marketing strategy of theirs affects that of L’Oréal, diverting the potential customers of L’Oréal to these rival companies.

Slow Moving And Big Expenses

Because the company has so many branches, its functioning is slow compared to when it was a small company.

loreal employees

Also, because this company has over 60,000 employees, it has to spend a lot on their salaries.

L’Oréal SWOT Analysis: Opportunities

Demand For Beauty Products

Since people constantly need to look their best to look youthful, the demand for beauty products will never go down anytime soon. Grooming and beauty-related products will only increase marketing and sales for the company.

Opportunity To Create New Products

This is also seen as a disadvantage for the business. Since L’oreal also concentrates on all skin tones and hair types, they compete with companies that only focus on the less included people.

loreal Advertising

However, because L’Oreal operates in practically every industry area, some people hesitate to work with these other companies.

Read also: Top 5 Successful Colgate Marketing Strategy

L’Oréal SWOT Analysis: Threats

Competition Continues To Heighten

In this industry, there is constantly increasing competition. If you are going crazy over one product, within the next few weeks, a newer one will be launched by some other rival company. This will keep L’oreal on their toes to constantly develop something to stand out.

loreal competitors

Changes In Customer Preferences

Humans are very fidgety with our preferences, and we tend to change our choices when we find something trendier or new. This unstable state of customers will also pose a challenge to L’oreal as they always have to come up with satisfactory things to keep their regular customers.

Who Are L’oreal’s Competitors?

Here are a few companies that are similar to L’oreal that are also the company’s competitors/rivals.

  • COTY– a cosmetic company like Loreal with scents, hairstyle, shade, skin, and body care products.
  • Revlon– is a significant competitor in the beauty business when placed with L’Oréal. The company is recognized for its extensive line of cosmetics, skincare, and hair care products.
  • Avon– is a well-known direct-selling beauty brand that allows the company to connect with customers and provide various cosmetic and skincare items.

See Also: Dove SWOT Analysis: Everything to Know

FAQs

Has L'Oréal products affected skin badly?

L'Oréal's products claim to be of excellent quality, but recently, there has been an issue with one of the products from the company. L'Oréal is currently facing pressed charges for causing cancer in the customers who have used the product.

What gives L'Oréal an advantage in the industry?

L'Oréal mainly focuses on one line of products with a wide range that fits your needs. This builds up trust in potential or pre-existing customers, making them think that they specialize in this field and encouraging them to buy from them.

What are some future goals of L'Oréal?

According to their official website– By 2025, all of their facilities will be environmentally friendly thanks to increased energy efficiency and 100% renewable energy use. By 2030, they aim to assist their customers to lower their greenhouse gas emissions from using their products by 25%.

What is the tagline of L'Oréal?

It is pretty women-empowering and brings them together. The company's famous tagline is 'Because We're Worth It.'

Conclusion

In this article, we talked about the SWOT analysis of L’Oréal. We reviewed all the factors that add to the company’s strengths and weaknesses, what opportunities they have in front of them, and the threats they need to be aware of.

See also: Dior’s Marketing Strategy: Full Breakdown

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Vitor Peçanha One of the most recognized digital marketing leaders in Brazil, published author, and content marketer. More posts by Vitor Peçanha