PESTLE Analysis of L’Oreal
When it comes to personal care products and cosmetics, some brands automatically come into our minds, and L’Oreal is one of them. It is one of the most famous and recognized brands in the world right now. They have achieved cult status in a brief period of time from cosmetics lovers. They offer a fantastic variety of perfumes, skincare, haircare, hair color, and sun protection. L’Oreal is the more prominent brand in the cosmetics market. It was originated in Paris in 1909. The current CEO of L’Oreal is Jean-Paul Agon. With more than 88,000 employees worldwide, L’Oreal is a successful cosmetics brand. This PESTLE analysis of L’Oreal contains political, economic, socio-cultural, technological, legal, and environmental factors. Let’s discuss each factor one by one.
Political Factors | PESTLE analysis of L’Oreal
When a company decides to expand its operations to other countries of the world, its decision and work are affected by that country’s political scenarios. It involves the company in negative ways mostly, and it is because of the different political cultures. But, L’Oreal is very concerned about its rules, regulations, and policies. They watch the varying political situations of every country in which they are operating. The impact of the European Union is very huge on L’Oreal, and the recent Brexit deal has affected the company in the wrong way. L’Oreal must follow proper rules and regulations to remain competitive.
Moreover, they have to ensure their customers’ safety of ingredients they are using in their products. It is very tough for L’Oreal to remain functional in the Middle Eastern region because these countries are a little conservative and have different cultural values. Their advertising strategy is not helpful in these traditional countries because of their women’s representation and attires. In this advanced era, people are becoming more aware of the political system and events. It is a common practice that people follow those brands that synchronize with their culture and needs.
Economic Factors | PESTLE analysis L’Oreal
The economic downturn is one of the significant reasons for the downfall of many companies. The current global economic conditions are not so well, and every economy is fluctuating, which is not a positive sign for L’Oreal. It is a constant challenge that every company is experiencing, and L’Oreal is one of them. Like any other business, L’Oreal was hugely impacted by the novel Covid-19 due to the import and export restrictions. But, they remain constant in their performance due to their exceptional strategies and implementation. Well, the credit goes to online sales or E-commerce. L’Oreal used many online platforms to sell its products. On the other hand, they have an incredible opportunity to grow their business with the help of online platforms in developing countries like China, India, and Pakistan. They need to work hard to expand their reach in other regions of the world.
Socio-Cultural Factors | PESTLE analysis of L’Oreal
In the socio-cultural department, L’Oreal is an established brand and it is because they donated millions of sanitizers and lotions to the doctors and front-line workers. It means they have reached every corner of the world, and it is the right time to establish as a global cosmetics brand. The company fulfills the demands of millions of customers all around the globe. Nowadays, people are really conscious about their hair and skin. Plus, makeup is an evergreen product for girls. Basically, L’Oreal is a vegan cosmetics brand, and its products are cruelty-free. They are against animal testing, but they have performed many animal testing procedures in different regions where it is legal, like china.
In short, L’Oreal is currently going strong in ethical practices. On the recent issue of “Black Lives Matter,” the company’s stance was unequivocal, and it gives them a positive recognition. In 2020, the company decided to remove the “whitening” word officially after the case of George Floyd. Many people admired this action.
Technological Factors | PESTLE analysis L’Oreal
L’Oreal is one of the oldest cosmetics brands globally, with more than 100 years of working. They are continuously introducing innovation to their products. L’Oreal also believes in digital technology and green science. They are trying to provide natural and sustainable beauty and cosmetics to their consumers. They have an intense research and technology system. L’Oreal also gives virtual try-on for their items before you pay. In offering customized solutions, they also provide profound diagnoses to interested customers. Perso’s Smart Skincare is one of the most advanced and remarkable technologies that L’Oreal has right now. Basically, it is a device that is connected to an app. You can type your requirements on this app, and you will get a complete skincare guide about pigmentation, wrinkles, fine lines, and more.
In this way, you can easily decide on the right product for your skin concern. You can also upload your photo to get a full assessment of your skin. It also provides valuable solutions. This is the innovation that L’Oreal has successfully managed to conjure up. This device is completely portable and you can also adjust your morning and night skincare routine in it. This thing can make L’Oreal a global leader in beauty tech.
Legal Factors | PESTLE analysis of L’Oreal
It is really tempting for any company to be known as a global leader in the relative industry. But, it is taxing too. Nowadays, every company is facing the same problem and that is counterfeit brands and products. The beauty and cosmetics market is overcrowded with a lot of fake brands and they are constantly threatening the profitability of each other. They are big problems for authentic brands and can hurt the credibility of the original brand. Price is also a significant factor because so many companies offer the same products at competitive prices.
Many fake products of L’Oreal are selling on different online platforms like Alibaba. They requested the Chinese government to fix this fraud. Finally, they removed these counterfeit products, but there are so many cases. To be honest, it is almost impossible to track every fake product. Moreover, L’Oreal has faced many lawsuits and court cases over several issues that hurt its reputation.
Environmental Factors | PESTLE analysis L’Oreal
The big goal for every company nowadays is to start sustainable practices. L’Oreal is trying to reduce its CO2 emission and environmental waste. For this purpose, they are constantly discussing important things with stakeholders to achieve sustainable goals. They are also reducing their chemical use in cosmetics like parabens, sulfates, and other toxins. The brand is focusing on increasing its sustainable practices and reducing plastic usage. They are developing biodegradable, refillable, and recyclable packages.
After reading this PESTLE analysis of L’Oreal, you can easily understand the company’s current standing, and you can evaluate its operations, working, and business strategies. In short, L’Oreal is a leading cosmetics brand and successfully managing its functionality. The company is doing well due to its strong online presence, and they have so many unique opportunities for growth.
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