Strategic Management Report

Strategic Management Report

Table of Contents:
Description of Company-----------------------------------------------------------

Pp 4

Current Strategies
Mission Statement------------------------------------------------------------------

Pp 6

Analysis and improvement

Key Members of Management----------------------------------------------------

Pp 9

Organizational Structure------------------------------------------------------------- Pp 12
Distinctive Competencies----------------------------------------------------------- Pp 13
Financial Three-Year Summary----------------------------------------------------- Pp 14
Income statement
Balance sheet
Key Competitors-------------------------------------------------------------------- Pp 17
Key Ratios--------------------------------------------------------------------------- Pp 19
Situation Analysis------------------------------------------------------------------- Pp 22
General environment
Industry analysis
Internal environment

Functional Units- Resources & Capabilities

Current Issues
SWOT Analysis---------------------------------------------------------------------

Pp 32

Recommendations-----------------------------------------------------------------

Pp 37

Description of Company
L'Oral is the world's largest cosmetics and beauty products company that
manufactures products ranging from cosmetics, perfume, hair and skincare items.
L'Orals success is built on a strong foundation, which began in 1909 when Eugene
Schueller, a young chemist and entrepreneur, established the company. Its brands
include

L'Oral

Paris,

Maybelline

(mass-market),

Lancme

(luxury),

Redken

and SoftSheen/Carson (retail and salon). L'Oral is a publicly listed company, but the
founders (Eugne Schuellers) daughter, Liliane Bettencourt, and the Swiss food
company, Nestl, have over a quarter of the shares as well as voting rights. In 2010,
the companys overall consolidated sales were 19,5 billion. L'Oral has 23 global
brands among 66 countries with approximately 66,600 employees. There are 38
factories around the world and 5.7 billion units manufactured in 2010.
L'Oral, who owns Dallas-based SkinCeuticals, also conducts cosmetology and
dermatology research. With more than 50% of sales generated outside Europe,
L'Oral has focused on acquiring brands in those markets. L'Oral also owns the UKbased natural cosmetics retailer The Body Shop International, which accumulated
about 2,550 stores worldwide. The firm's dermatology branch, Galderma, is a joint
venture between L'Oral and Nestl. Their company motto is Savoir saisir ce qui
commence, which translates to seize new opportunities, results to their emphasis
on expansion into larger market segments.
L'Oral holds 10.41% of the shares of Sanofi-Aventis, Europes first
pharmaceutical company. In our culture, the brands come first. Weve always been
more active in marketing each of our brands and their culture. That is very deep at

L'Oral, explained Sandrine Michard, Vice President of corporate communications at

L'Oral Canada.i
L'Oral has three current strategies: broadening its customer base, changing
business operations and functions, increasing expense in research & development
and promotion & advertising.

/ Broadening Customer Base

The recent economic crisis has brought this strategy into focus. To counter
the deficit, broadening the consumer base will allow the company to concentrate on
accessible innovation. L'Oral is also expanding geographically. The company is
moving into the Latin American and Eastern European markets for deodorants and
fragrances, which have been an outstanding success.

/ Changing Business Operations and Functions

L'Oral has been focusing on streamlining, focusing, simplifying and making
their business more efficient. These changes have resulted in continued industrial reengineering of the business in every aspect, including closure of inefficient
production facilities, centralization of purchasing processes, better utilization of
equipment and major advances in productivity.

Increasing

Expense

in

Research

&

Development

and

Promotion & Advertising

In 2009, the company started to actively increase R&D. This contributes
invaluably to the innovation efficacy, quality and safety of the products, which in
return gives the company a competitive advantage. LOreal supports its sales growth
by increasing expenses in promotions and advertising. We intend to maintain a
high level of investment in P&A, at the same time as undertaking an in depth
analysis of our operations in this area to ensure that every euro generate maximum
additional growth,iiJean-Paul Agon, the CEO of the company, stated in their 2010
financial presentation.

Company Mission Statement

Cosmetics Are Part Of The Universal Quest For Beauty.
As a form of self-expression, they are personal in the fullest sense - just as they are
part of social life, serving a daily need for self-confidence and contact with others.
At LOreal, we are fully committed to meeting that need, putting all our expertise
and research resources to work for the well being of men and women, in al their
diversity, around the world. That commitment is what gives meaning to our
business.

/ Additional Mission Values

BEAUTY FOR EVERYONE
For more than a century LOral has been pushing back the boundaries of
science to invent beauty and meet the aspirations of millions of women and men. Its
vocation is universal: to offer everyone, all over the world, the best of cosmetics in
terms of quality, efficacy and safety, to give everyone access to beauty by offering
products in harmony with their needs, culture and expectations.
With the opening up of the emerging markets, LOrals mission is broadening
in response to the vast diversity of populations. The whole company is focused on
this new horizon: teams enriched by their cultural diversity, a portfolio of
international brands present in the different distribution channels, and research that
7

is capable of grasping the worlds complexity. The exploration of new scientific and
technological territories is being enriched by this global dimension. Knowledge of
different cultures and rituals worldwide enables the laboratories to anticipate and
invent the products of the future.
LOral is committed to carrying out its mission to make beauty universal in a
sustainable and responsible way. A highly exacting challenge, which the group is
taking up step by step, in a long-term perspective, with the active involvement of all
its employees. Ranked amongst the 100 most sustainable and ethical companies in
the world, LOrals ambition is to be an exemplary corporate citizen. To help make
the world a more beautiful place.iii

/ Values

Striving For Excellence

Perfection is our goal. We are determined to continue enhancing or brand
portfolio with innovative products and to meet the most demanding standards of
quality and product safety at all times.

A Passion For Adventure

Our expertise drives our passion for new discoveries and innovation in
cosmetics. Each new achievement each step forward is in itself a new beginning.

 Enrichment Through Diversity

Understanding and valuing each individual is an essential part of our
corporate culture. Our staff members come from many different backgrounds and
work together to offer a full range of products through varied distribution channels.
Our goal is to serve the beauty and well-being of our consumers in all cultures
throughout the world.

Valuing Individual Talent

Just as we are dedicated to enhancing the well-being of our consumers, we
also make it a priority to ensure that each employee has the opportunity to develop
his or her potential through personal and professional growth.

Leading Innovation In Beauty

Research is as much a part of our business as marketing, sensitivity to
consumer needs is as important as scientific rigor, and know-how and expertise are
as essential as intuition. Building on our unrivalled experience and expertise,
fundamental research is a specific focus of investment that drives creativity and
contributes to developing the cosmetics of tomorrow.

iv

/ Evaluating LOreals Mission

Customers

YES men and women in all their

diversity

Product and Service

YES Cosmetics

Markets

YES around the world

Techonology

YES but vague, our expertise and

research resources

Concern for growth

NO, not in mission. But in Values:

opening up to emerging markets

Philosophy

YES The Universal Quest for Beauty

Self-Concept

YES but vague in mission: fully

committed. But in Values: Quality,
Efficacy, Safety

Concern for Public Image

NO, not in mission. But in Values:

sustainable and responsible way

Concern for employees

YES and NO, it is implied: we are fully

committed, but YES in values: active
involvement

Thus, LOreal achieves 7 out of 9 for its mission alone. If it were to incorporate
some of its mentioned values in its mission, it would possess the perfect mission.

10

/ Suggested Revised Mission

BEAUTY FOR ALL
At LOreal, we are fully committed to meeting the need for high quality
cosmetics to make beauty universal in a safe, efficient and sustainable way; putting
all our expertise and research resources to work for the well-being of men and
women, in all their diversity around the world. For that purpose we strive to grow by
opening up to emerging markets, exploring new scientific and technological
territories, while ensuring that each of our employees had the opportunity to
develop his or her potential growth.
That commitment is what gives meaning to our business.

11

Key Members of Management

CEO / Jean-Paul Agon
Agon joined the group in 1978. He previously had an international career as
General Manager of Consumer Products in Greece, and of LOral Paris in France,
International Managing Director of Biotherm, Managing Director of LOral in
Germany, Managing Director of the Asia zone, President and CEO of LOral USA,
appointed Deputy Chief Executive Officer of LOral in 2005, Chief Executive Officer
in April 2006 and then Chairman and Chief Executive Officer in March 2011. LOral
Board member since 2006 (term of office renewed in 2010). Board member of the
LOral Corporate Foundation and Air Liquide.

Chairman / Lindsay Owen-Jones

Joined the group in 1969. After starting his career in France, he was Chief
Executive Officer of LOral in Italy from 1978 to 1981 and President (CEO) of LOral
USA from 1981 to 1984. He was appointed Chief Executive Officer of LOral in 1984,
then Chairman and Chief Executive Officer in 1988, non-executive Chairman of the
group from April 2006 to March 2011, and Honorary Chairman thereafter. LOral
Board member since 1984 (term of office renewed in 2010). Director and Chairman

12

of the LOral Corporate Foundation. Board member of Sanofi-Aventis and Ferrari

(Italy).

Vice Chairman of the Board / Peter Brabeck-Letmathe

He was with the Nestl group since 1968, appointed General Manager in
1992, then Chief Executive Officer of Nestl SA (Switzerland) in 1997, Vice-Chairman
of the Board in 2001 and Chairman in 2005. LOral Board member since 1997 (term
of office renewed in 2009), Vice-Chairman of the Board. Vice-Chairman of the Board
of Crdit Suisse Group (Switzerland), Boardmember of Delta Topco Limited (Jersey)
and Exxon Mobil (United States).

Director / Werner Bauer

With the Nestl group since 1990, appointed General Manager in 2002.
LOral Board member since 2005 (term of office renewed in 2010)

Director / Louis Schweitzer

Joined Renault in 1986, Chairman and Chief Executive Officer from 1992 to
2005, Chairman of the Board until 2009. LOral Board member since 2005 (term of
office renewed in 2009). Chairman of the Board of AB Volvo (Sweden) and

13

AstraZeneca (United Kingdom). Board member of BNP Paribas and Veolia

Environnement. Member of the Consultative Board of Allianz AG (Germany).

Director / Annette Roux

Joined Bnteau in 1964, Chairperson and Chief Executive Officer from 1976
to 2005, Vice-Chairperson of the Supervisory Board thereafter. LOral Board
member since 2007. She is also the President of the Bnteau Corporate Foundation.

Director / Bernard Kasriel

With the Institut du dveloppement industriel from 1970 to 1975. Chief
Executive Officer of Braud from 1972 to 1974. Executive Vice-President of the
Socit phocenne de mtallurgie from 1975 to 1977. Joined Lafarge in 1977,
appointed Deputy General Manager in 1982. Assigned to the United States from
1987 to 1989, appointed Vice-Chairman and Chief Executive Officer from 1989 to
2003, and then Chief Executive Officer from 2003 to 2005. LOral Board member
since 2004 (term of office renewed in 2008).

14

Director / Charles-Henri Filippi

French civil service from 1979 to 1987. Worked for CCF (which became HSBC
France in 2000) from 1987 to 2008. Chief Executive Officer of CCF in 1995, HSBC
Group Executive Committee member from 2001 to 2004, Chairman and Chief
Executive Officer of
HSBC France from 2004 to 2007 and Chairman of the Board from September 2007
to December 2008. Chairman of Octagones and Alfina. Chairman of Citigroup for
France since January 2011. LOral Board member since 2007 (term of office
renewed in
2010(8)). France Telecom Board member, Supervisory Board member of Euris and
Censor of Nexity.

Director / Xavier Fontanet

Appointed Chief Executive Officer of Essilor in 1991, Vice-Chairman and Chief
Executive Officer in 1995, Chairman and Chief Executive Officer from 1996 to 2009,
Chairman of the Board of Directors since January 2010. LOral Board member since
2002 (term of
office renewed in 2010). Board member of Crdit Agricole SA and Fonds Stratgique
dInvestissement (FSI).

15

Director / Liliane Bettencourt

Daughter of Eugne Schueller, the founder of LOral. LOral Board member
since1995 (term of office renewed in 2007).

Director / Francoise Bettencourt Meyers

Daughter of Mrs Bettencourt. LOral Board member since 1997 (term of
office renewed in 2009).

Director / Francisco Castaner Basco

With the Nestl group since 1964, General Manager from 1997 to 2009.
LOral Board member since1998 (term of office renewed in 2010(8)).

Director / Marc Ladreit de Lacharriere

Member of the Institut. With LOral from 1976 to 1991, former Executive
Vice-President in charge of Administration and Finance, Deputy Chief Executive
Officer from 1984 to 1991.
Chairman and Chief Executive Officer of Fimalac. Chairman of Fitch (United
States). LOral Board member since 1984 (term of office renewed in 2010). Board

16

member of the LOral Corporate Foundation. Board member of Casino and

Renault.

17

Organizational Structure

CEO
Jean- Paul Agon

Chairman
Lindsay Owens-Jones

CEO
CIO
Jean- Paul Agon

Research &
Innovation

Business
Development &
External Affairs

Active Cosmetics
Henric Sark

Roger Dolden

Finance &
Administration

North America
Fedric Rose

Consumer
Products
Joseph Campinell

Communication
& Public Affairs

Latin America &

MEA

Luxury Products

LOreal Paris

Carol Hamilton

Karen Fondu

Luxury Products

Maybelline
New York-Garnier
David Greenberg

Africa &
Middle East

Asia

Human Resources

Operations

Sarah Hibberson

Vince Serpico

Operations

Professional
Products
& Salon Products
Patrick Parenty

Professional
Products

Research &
Development
Eric Bone

As you can see from the above diagram, the corporate organizational
structure of LOreal is too complicated to be categorized as a functional, divisional

18

or a metrics structure. LOreals organizational structure can be considered a hybrid

of both divisional and functional structures, as it is organized both through functions
of work and divisions.

The functional aspect can be seen though the titles- CIO, Finance &
Administration, Operations and so forth. However, the structure also satisfies the
divisional organizational structure through titles of the following- Luxury Products,
Consumer Products and so forth. It is essential to also point out that LOreal not
only divides its organization through products, but it also utilizes the divisional
organization through geographical divisions such as North America, Africa & Middle
East, Asia and so forth. Therefore, the organizational structure of LOreal is of a
rather sophisticated one, mainly due to its global influence and the fact that LOreal
is of an extremely established organization. LOreal achieves organizational structure
through combining both functional and divisional structures to ensure efficiency
throughout the world.

19

Distinctive Competencies
LOreal has several core competencies that create value, giving it a
competitive advantage to its competitors. LOreal achieves product innovation by
creating new and innovative products at their advanced dermatological research
facilities. The company invests 3% of their sales in research and development and
introduces one or two new products each year. Another core competency is
achieved within their marketing campaign by using high profile celebrities in ad
campaigns. LOreal is able to greatly enhance its global image through marketing.
Lastly, LOreal offers a diverse range of products including make up, perfume, hair
and skin products that caters to various ethnic groups.

20

Financial Summary
/ Consolidated Profit & Loss Statement
Millions

2010

2009

2008

Net Sales

19,495.8

17,472.6

17,541.8

Cost of Sales

-5,696.5

-5,161.6

-5,187.2

Gross Profit

13,799.3

12,311

12,354.6

Research & Development

-664.7

-609.2

-587.5

Advertising and Promotion

-6,029.1

-5,388.7

-5,269.1

Selling, general & administrative expenses

-4,048.6

-3,735.5

-3,773.4

Operating Profit

3,056.9

2,577.6

2,724.6

Other income and expenses

-153.2

-277.6

-156.3

Operational Profit

2,903.7

2,299.9

2,568.3

Finance costs on gross debt

-43.8

-92.0

-208.8

Finance income on cash and cash equivalents

17.2

16.0

34.6

Finance costs, net

-26.6

-76.0

-174.2

Other financial income (expenses)

-9.0

-13.0

-7.2

Sanofi-Aventis dividends

283.8

260.1

244.7

Profit before tax and non-controlling interests

3,151.9

2,471.0

2,631.6

Income tax

-909.9

-676.1

-680.7

Net Profit

2,242.0

1,794.9

1,950.9

-owners of the company

2,239.7

1,792.2

1,948.3

-non-controlling interest

2.3

2.7

2.6

Earnings per share attributable to owners of the

3.82

3.07

3.31

attributable to:

company

The consolidated financial statements of L'Oral and its subsidiaries published for 2010 have been
prepared in accordance with International Financial Reporting Standards (IFRS).

21

/ Analysis of the Profit & Loss Statement

L'Oral has gradually increased profits throughout the last three years.
However, net sales decreased 6.9 million from 2008 to 2009 due to the instability
of the economy. According to the article, Report slams L'Oral management and

predicts tough 2009, L'Oral has been trading on past glories and is beginning to
pay the price for years of mismanagement. L'Oral has already seen a slowdown in
top line expansion in recent times with organic growth for the past 5 years
averaging out at 5.7 per cent compared to 8.5 per cent for the five previous years.
The company has also missed sales target in three out of the last four years.v

One of their largest costs are allocated in advertising and promotion, L'Oral
has used various actresses or different personalities of all ages that best exudes the
vision of the company. Famous personalities enable average individuals to relate to
their personal lives, allowing them to feel good and thus increase higher sales.

L'Oral has gross profit margin of 71% in 2010, an increase of 1% over last
year, which is a healthy growth. In addition, there is a 12% increase in gross sales,

22

which is most likely due to sales in L'Orals new emerging markets from 2008 to
2010.

Their net income also grew 1% over last year, indicating an insignificant
growth. However, with their dedication in the growth of the company, L'Oral has
spent more on operational expenses to restructure the company, invest in R&D, and
devote more money towards promoting strategies. Therefore, the company was not
able to retain money within the company.

23

/ Consolidated Balance Sheet

Millions

2010

2009

2008

Non-current assets

17,048.2

17,350.4

16,380.3

Goodwill

5,729.6

5,446.0

5,532.5

Other intangible assets

2,177.5

2,042.4

2,038.2

Tangible assets

2,677.5

2,599.0

2,753.3

Non-current financial assets

5,837.5

6,672.2

5,557.4

Deferred tax assets

626.1

570.8

498.9

Current assets

6996.3

5,941.1

6,526.5

Inventories

1,810.1

1,476.7

1,635.5

Trade accounts receivable

2,685.2

2,443.3

2,694.6

Other current assets

846.0

732.8

985.8

Current tax assets

104.5

115.2

133.6

Cash and cash equivalents

1,550.4

1,173.1

1,077.1

Total assets

24,044.5

23,291.5

22,906.9

Equity

14,865.8

13,598.3

11,562.5

Non-current liabilities

2,596.6

4,306.6

3,978.0

Current liabilities

6,582.1

5,386.5

7,366.4

Accounts Payable

3,153.5

2,603.1

2,656.6

Provisions for liabilities and charges 536.9

510.0

431.1

Other current liabilities

1,958.1

1,750.5

1,848.4

Income tax

166.6

133.2

159.7

Current borrowings and debt

767.0

389.7

2,270.6

Total liabilities

9,178.7

9,693.2

11,344.4

TOTAL

24,044.5

23,291.5

22,906.9

As of 12/31

24

/ Analysis on The Balance Sheet

L'Orals total liabilities have gradually decreased over the last three years. It
seems as though they have been able to pay off their long-term liabilities such as
bank loans and mortgage loans. In addition, L'Orals current borrowings and debt
amount of 767 million is significantly higher than 2009, indicating that L'Oral may
be borrowing large amounts of money to feul R&D for new inventories. These
numbers all suggest the emphasis of L'Orals expansion and growth to become the
front-runner in the industry.

25

Key competitors
Because of the major market share LOreal has in the cosmetics and personal
care industry, the key competitors of LOreal are the biggest beauty and skincare
manufacturers. Below are six of its major competitors:

Estee Lauder, a beauty, hair and skin care company with more than 25 brands
and distributes to over 150 countries. Its brands are catered towards the higher end
and luxury market, including Aveda, Bobbi Brown, Michael Kors, Coach, Tom Ford,
Smashbox, Clinique, Donna Karan, La Mer and M.A.C.

Revlon, a cosmetics, hair color, deodorant and beauty tools company that
distributes to about 100 countries worldwide. Brands are catered towards the mass
market - the middle to lower class market, and include Almay, Revlon products and
Mitchum deodorants.

Avon Products, a cosmetics and skin care company that distributes through
representatives throughout 100 countries. Unlike other companies, Avon does not
sell through brick and mortar stores or distribute to third party vendors, but instead

26

through their website, and employs representatives to promote and sell their
products. Some brands under Avon are Mark, Liz Earle and Silpada.

Alberto Culver, a personal care and beauty company that focuses on lower
end and value products that are distributed through the mass market worldwide,
mostly at drugstores and value stores. Brands include Tresemme, St Ives, Noxzema
and Vo5. Unilever acquired the company in May 2011.

Procter & Gamble, a personal care, beauty and household product company
that has a wide range of brands from high to low end. Brands include SK-II, Vidal
Sassoon, Wella, Anna Sui, Gilette, Herbal Essences, Clairol and Head & Shoulders.

27

/ Competitive Profile Matrix

Critical Success
Factor

L'Oreal

P&G

Avon

Estee Lauder

Weight Rating Score Rating Score Rating Score Rating Score

Advertising

0.15

0.6

0.6

0.15

0.45

Product Quality

0.1

0.3

0.3

0.4

0.4

Innovation

0.05

0.2

0.1

0.1

0.15

Competitiveness

0.1

0.3

0.3

0.3

0.2

Management

0.1

0.3

0.3

0.4

0.3

Market Share

0.1

0.4

0.3

0.2

0.2

Global Expansion

0.05

0.15

0.1

0.15

0.15

Distribution

0.05

0.15

0.15

0.1

0.1

Customer Loyalty

0.1

0.3

0.2

0.4

0.4

Financial positioning

0.1

0.4

0.3

0.4

0.4

Product Selection

0.05

0.2

0.2

0.2

0.2

Social Responsibility

0.05

0.2

0.2

0.2

0.2

Total

Price

3.5

3.05

3.15

As we can see, LOreal is the leading company for the cosmetics and skin care
industry, with Estee Lauder behind, and then Proctor and Gamble, and then Avon.
Proctor & Gamble is as big in size as LOreal, however, in terms of cosmetics and
skin care, LOreal triumphs over them. Avon loses in terms of advertising and market

28

share, and Estee Lauder comes in second due to its product selection as well as
product quality.

29

Key Ratios

LIQUIDITY
Current Ratio
Quick Ratio
LEVERAGE RATIOS
Debt to Assets Ratio
Debt to Equity Ratio
Long Term Debt to Equity Ratio
ACTIVITY RATIOS
Inventory Turnover
Fixed Assets Turnover
Total Assets Turnover
Accounts Receivable Turnover
PROFITABILITY RATIOS
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Assets
Return on Equity
Earnings Per Share
Price Earnings Ratio (MS based on
11/08/10)
GROWTH RATIOS
Sales
Net Income

L'OREAL

AVON

REVLON

ESTEE LAUDER

1.0x
0.6x

1.4x
0.7x

1.5x
0.7x

1.8x
1.1x

0.4x
0.6x
0.06x

0.8x
4x
1.5x

1.6x
(3)x
(1.7)x

0.6x
4x
0.4x

3 Days
7 Days
Under1 Day
6 Days

3 Days
7 Days
1 Day
14 Days

3 Days
13 Days
1 Day
7 Days

2 Days
8 Days
1 Day
7 Days

70.80%
15%
11%
7.92%
15.76%
$3.79

63.52%
10%
6%
10.25%
43.96%
$1.39

64.95%
14%
25%
12.91%
-37.28%
$6.26

78.49%
16%
6%
14.17%
34.25%
$2.38

21

31

12%
25%

6%
-3%

2%
571%

13%
47%

30

/ Analysis on Key Ratios:

Liquidity Ratios
LOreal is not as liquid then the competitors. LOreal is not able to pay off
their short-term debts and liabilities as well as their competitors. This ratio indicates
their ability to turn short term assets into cash to cover debt. Liquidity ratios are
very important, as it can be one of the main indicators of whether a company will
survive in the long term. LOreal has almost 1 million (euros) more accounts payable
in 2010 indicating one of the reasons why they have higher liability to their assets.
This may account to the lower current ratio.

Leverage Ratios

L'Oreal is less levered compared to its competitors. They have low Debt to
Assets ratio meaning that they have low liabilities and more assets, which is a good
sign. However, we can also argue that this could result to less growth in the future
since they are not investing as much as other competitors to buy assets to grow the
company. Their low Debt to Equity ratio is also lower than competitors meaning
31

they are less of a risky company than competitors. This might mean that L'Oreal can
take advantage of issuing more debt and use the cash to buyback some of its
outstanding shares to return some money to investors.

Activity Ratios
Inventory turnover: In line with competitors. They can try to improve to match
Estee Lauder but they are in healthy shape.

Fixed asset turnover: Very healthy number and in line with competitors. They
have a low number, meaning their fixed assets are used very efficiently.

A/R turnover: Better than competitors, which mean the company is able to
collect money from its customers faster than its competitors. This is good for
liquidity.

Profitability Ratios
Gross Margin Ratio: LOreal has a relatively high gross margin ratios
compared to its competitors, which is a good sign. They are left with more
money for the company.

32

 Return On Equity: LOreals ROE is low compared to its competitors. They are
less able to generate return for its shareholders. Since LOreal has a high
gross margin, assuming that the company perhaps spends more on
advertising or something below the gross profit line that would lead the
company to have lower net earnings. The best guess is their investment on
equipment, restructuring of the company, and promoting efforts that was
indicated by the CEO are some of the reasons why the ROE is a bit lower than
others.

Growth Ratios
Growth ratios are very strong compared to its competitors. Sales are very
strong in 2010 probably because in 2010, they acquired Yves Saint Laurent as one of
their companies to produce cosmetics from. Their net income ratio is in line with
competitors. Revlon recently came out of bankruptcy, therefore they have a very
high net income but it is a skewed ratio. We would like to see the net income ratio
to be a little bit higher, however they have increased their advertising in 2010. This
may be a factor in the net income ratio results, however, 25% is a very good
number.

33

Situation Analysis
/ General Environment

INDUSTRY TRENDS
The following are current trends in the cosmetics industry that are driving the
markets:

Due to the increasing awareness of environmental and health issues, natural

cosmetics and green cosmetics that are better for the environment are trending.
People are leaning towards a more natural look and feel, and more nature inspired
products. People care more about what is in their cosmetics, and prefer less
preservatives and chemicals on their skin. Consumers are also caring more about the
environment, and prefer greener and more basic packaging, eco friendly materials
used in packaging, as well as less waste and pollution while manufacturing the
products. Organic and fair trade are also emphasized.

34

Another trend in cosmetics, contrary to the green trend, are bright, ever
changing trendy colors. The trends in previous years were that women wear makeup
to look like they werent wearing make up at all, but now, cosmetic companies are
pushing more vibrant and bright colors. This would drive customers to change
colors more often and purchase more cosmetic products.

Anti-aging and sun protection are also trends in the industry. Women are
starting their anti-aging regiment from as young as 25, and there is an increasing
popularity in using ingredients such as retinoid, fillers, antioxidants and chemical
peels. FDA is also requiring warning for all sunscreen products, as well as a rating
system for sunscreens. There is also an increased amount of products in the market,
such as moisturizers and other skin care regiments, containing SPF in them.
Collaborations,

licensing

technologies

and

working

with

raw

material

companies are becoming more common in the industry. Companies are also
beginning to sell their intellectual property and selling other companies rights to use
their intellectual property to generate more income.

REGULATIONS
The cosmetics industry is mostly a self-regulating industry. The CTFA,
Cosmetics Toiletry Fragrance Association, monitors the industry. FDA does not pre35

approve cosmetics to see if they are effective or not, and companies cannot label
their products as FDA approved. It is the manufacturers responsibility to ensure that
the product is safe and effective for consumers. There are, however, FDA rules for
labeling cosmetics. The product label must contain the following:

Identity statement The nature and use of product

Net quantity of contents Weight
Name & place of business
Distributor statement Where its manufactured, and by who
Material facts
Warning and caution statements If used incorrectly may cause harm, or if

product contain flammable ingredients

Ingredients

The product cannot contain poisonous ingredients that can injure users, and
cannot contain decomposed substance. The product must be packaged in sanitary
conditions where it cannot be contaminated, and the FDA is responsible for
inspecting these cosmetics manufacturing plants. The labels must contain true facts,
and cannot be false or misleading, and in order for the label to be approved, it must
contain all of the above information. If the product turns out to be hazardous, the
FDA cannot recall them. It is the manufacturers responsibility to do so.
36

/ Industry Analysis

PORTERS FIVE FORCES MODEL

Industry

The cosmetic industry sells traditional cosmetics such as make-up and

perfume, as well as products of personal hygiene such as tooth-care products,
shampoos and soaps. Today, the cosmetic market is driven by innovation including
new color pallets, treatments targeted to specific skin types and unique formulas
concentrating on different needs. Most cosmetic types have a lifespan of less than
five years, and manufacturers reformulate 25% of their products every year.

LOreals competitive advantage is product differentiation, requiring the company

to have strong marketing abilities, product engineering, creative flair, strong capacity
in basic research, corporate reputation for quality and technological leadership, long
tradition in the industry, and strong cooperation from channels. Moreover, they

37

need strong coordination among functions of R&D, product development and

marketing and amenities to attract highly skilled labor, scientists and creative talent.

Suppliers
Bargaining Power of suppliers HIGH
In the cosmetic industry, the power suppliers have upon cosmetic companies
is high because products sold by cosmetic companies require expensive research
and expertise. Thus, cosmetic companies are dependent on their suppliers that have
developed the formulas of their products.

Bargaining Power of suppliers at LOreal LOW

LOreal owns most of its suppliers through its different brands (forward
integration). Very few brands compete with LOreal and thus its suppliers are
dependent on them. The cost of suppliers relative to the cost of its products is
actually quite low.

Substitute Products
Potential development of substitute products - MEDIUM to LOW

38

Because LOreal is a much-diversified company in cosmetic products ranging

from makeup, crmes to hair products, it is difficult to find a substitute product that
LOreal is not already selling. The only substitute that has arisen today is plastic
surgery, which could replace their cosmetics and aging products. However, the
performance of surgery as compared to cosmetics may be a threat to LOreal.
Nevertheless, the switching cost (money-wise and health-wise) is very high, and
most customers are unlikely to switch to surgery.
Another potential substitute is a trend towards no makeup and natural looks.
That trend usually goes hand in hand with that of anti-consumerist group that view
cosmetic products as superfluous.

Competitors
Rivalry among competing firms - HIGH to MEDIUM
The number of competitors in this industry is quite high. Some include, but
are not limited to, Avon Products, Inc. and Alticor Inc. Moreover, most of LOreals
competitors are specialized in a certain type of cosmetic, giving them an expert
image advantage over LOreal. The industry growth rate is also relatively high, as we
make constant improvements in aging and other product innovation. However, fixed
and storage costs are also high, but not as high as in other industries: products are
relatively small and easy to store. Moreover, LOreal caters to higher end customers,

39

producing its products in lower quantities. Product differentiation for LOreal is also
quite high because of its brand image; however in the cosmetic industry, such as the
perfume industry, it is often difficult to differentiate yourself from competitors.

Buyers
Bargaining power of consumers/buyers - MEDIUM to LOW
Customer profile of the luxury cosmetic industry:

Age 16 to 60 years old

Middle to upper class

Higher education, and cultural knowledge

Higher income level

Influence on the world in general

Man and woman, the majority of women

Have leisure time

Is critical, and informed consumer

Not afraid to complain, not tolerant of mistakes and failures in

products

40

Consumers have increasing power over companies because of the increased

accessibility of company information. However, LOreal is considered a high-end and
high-tech leader in its industry that directs demand rather than follows it. Volume of
purchase is quite low as a consequence, and product quality and differentiation of
suppliers is high. Since prices are high (luxury products), there is not a need for a lot
of buyers. Incentives for better quality and products with a strong brand identity
make the bargaining power of consumer relatively low at LOreal and in the luxury
cosmetic industry in general.

Entry of New Competitors

Potential entry of new competitors - LOW
LOreal offers products that are different and benefit from economies of scale
for

its

production.

In

the

cosmetic

industry,

brand

identity

and

product

differentiation is very high. High capital is required because of the heavy R&D
needed to create cosmetic products. Indeed, it is very expensive to start a new
cosmetic company in this industry with the need of high investment in product
development/testing, and advertising. Switching cost is not very high, but the cost of
switching to a new type of cosmetics that the customer might be allergic to is high.
There is high control of the distribution channels, and the access to raw materials is

41

limited because of specific chemicals needed to produce the cosmetic products.

Finally, government policies and regulations continue to get stricter in the cosmetic
industry for consumer protection, creating capital and social barriers to the entry of
new competitors.

/ Internal Environment

Tangible Resources

The tangible resources of LOreal would be first and foremost its financial
position and capital. How much profit does LOreal make? What is LOreals
borrowing power? From the year 2009 to 2010, LOreals net profit rose from 1997
million Euros to 2371 million Euros. The company was able to lower its net financial
debt/equity ratio from 14.4% in 2009 to a staggering low of 0.3% in 2010, meaning
that the company was almost covering all of its debts with its equity. LOreals net
financial debt lowered from 1985 million Euros in 2009 to 41 million Euros in 2010.
As LOreals debt lowers, it gives the company more borrowing capacity.

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Physical resources are another component of LOreals tangible resources. The

total worth of the companys assets rose from 23,291 million Euros in 2009 to 24,044
million Euros in 2010, of which 17,048 million is non-current assets, 5,446 million is
current assets, and 1,550 million is cash and cash equivalents.

Intangible Resources

For a cosmetics company like LOreal, a majority of its resources are

intangible. Some of the companys major intangible assets are its technological
patents. In 2010, LOreal has 612 patents, 18 research centers across the world, and
12 evaluation centers, of which specific ones are dedicated towards the studying of
Chinese, Japanese and African hair and skin. They call this Geocosmetics, and prize
their focus on studying ethnic skin types and tapping into global markets. In 2010
alone, LOreal spent 665 millions Euros in research and development.

Reputation is another important resource LOreal has. LOreal has the most
globally known brands as well as brand image, and its diverse brands and products
serve a wide range of customers. It has both accessible, mass marketed brands, as
well as high end, luxury brands for worldwide markets. They are also tapping into
the BRIC markets such as India and Brazil. LOreal has some of the top selling

43

products in the U.S., for example their Maybelline Falsies Mascaras, and are seen as
an environmentally friendly and socially responsible company.

In 2010, LOreal employed 66,619 people across the globe, and their mission
is to continue to diversify their human resources as much as possible. They
published a diversity report of its employees in 2010 the first ever published in
France and pushed the importance of acceptance of diversity in a workplace,
creating value and enrichment in their working environment. LOreal also recruited
young graduates from BRIC markets which are Brazil, Russia, India and China, and
created My Learning, an internet platform which trains employees in tailor-made
ways with specific requirements for each individual job.

Resource and Capabilities

Some of LOreals main capabilities are its ability to cater products to different
ethnic backgrounds, as well as its advanced R&D in these skin types. For this reason,
they are able to venture into untapped markets. LOreals constant innovation and
cutting edge technology puts them at the top of the market. They have recently
conducted the first ever stem cell research for makeup purposes. They also triumph
over other companies in terms of marketing and brand management they are able

44

to keep marketing its best products to keep them at their customers favorites lists.
Also, last but not least, its financial capabilities are also astounding they reduced
their debt/equity ratio by 14.1% in a year, as well as reduce its net debt from 1950
million Euros to 41 million in a year.

Current Issues

LOreal USA acquire Clarisonic owner (November 11th, 2011)

LOral subsidiary, LOral USA, is planning to buy Pacific Bioscience
Laboratories Inc (PBL), the company behind Clarisonic.

Established in 2001, PBL is

headquartered in Redmond, Washington. Its Clarisonic range of electronic skin care

devices based on sonically oscillating brushes and infusion technology comprises
of Clarisonic Classic, Clarisonic Mia, Clarisonic PLUS and PRO, and the Clarisonic
Opal Sonic Infusion System. This is a strategic acquisition for LOral, said Frdric
Roz, president and CEO of LOral USA. Devices are rapidly emerging globally as
an important new skin care category. Clarisonic is successful and the fastest growing
premium brand in this segment. We think that together with PBL, we will create in
Redmond an outstanding centre of innovation for LOral. Upon the closing of the
transaction, the Clarisonic brand will join the portfolio of LOral Luxe and benefit

45

from its worldwide presence. LOral brings powerful marketing, distribution and
R&D synergy to the Clarisonic agenda, added David Giuliani, CEO and co-founder
of PBL. LOral shares our vision for ingenuity and dedication to quality. Combining
forces, were confident Clarisonic will rapidly achieve its global mission to provide
the power to change the future of your skin. The merger is subject to approval of
PBLs shareholders and other conditions, and is expected to close in December.

Decisive Court Ruling in Bettencourt- LOreal Saga (October 18th, 2011)

A French court has ruled decisively in the long running Bettencourt-L'Oral
saga. Liliane Bettencourt, the major shareholder in L'Oral and suffering from
dementia, has been placed under the guardianship of family members. The family's
voting rights in the company will continue to be exercised through the family
holding group.

Bettencourt's daughter, Francoise, has re-emphasized the family's

strong attachment to the cosmetics major group and its future development. The
family controls 30.9% of L'Oral's capital with Nestl holding 29.7%. Francoise
Bettencourt said the court's decision regarding her mother in no way affected the
agreement reached in 2004 between the family and Nestl. The 2004 accord
envisaged that up to 2014, each would have a right of pre-emption over the shares
of the other. Following the court ruling, L'Oral's shares moved up 2.1%.

46

 Sustainable Cosmetic Summit to focus on sustainable ingredients and

distribution innovations (September 13th, 2011)

Sustainable ingredients and distribution innovations are the focal themes of
the

European

edition

of

the

Sustainable

Cosmetics

Summit

(www.sustainablecosmeticssummit.com/Europe). Taking place in Paris from the 28th30th of November, the summit will bring together leading organizations involved in
sustainability in the beauty industry to debate key industry issues. Rising oil prices
and dwindling supply are leading many companies to turn to plant-based feedstock
for cosmetic ingredients. However, this development raises many questions about
sustainable harvesting, processing and use of such ingredients. The Sourcing and
Using Sustainable Ingredients session discusses such concerns. Romain Ruth, CEO of
Florame, discusses the pitfalls and challenges of sourcing raw materials from
developing countries. Another paper by AAK looks at the complexities of sustainable
sourcing of commodities, such as vegetables oils. Other speakers will discuss the
sustainable use of plant feedstock, deriving novel actives from food crops, and major
green certification schemes.

A conference session and workshop is devoted to

Marketing & Distribution Innovations. Although growth in the sustainable cosmetics

market is continuing, market conditions have changed considerably in recent years.
The entry of large multinationals, retailer private labels and other new brands are
raising the competitive stakes. Marketing has come to the forefront, with many
brands competing on communications, positioning and distribution.
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The opening session of the summit - Sustainability Best-Practices - features

some of the pioneering sustainability initiatives in the beauty industry. The first
paper will give case studies of cosmetic and ingredient companies creating positive
impacts on the environment and society. LOral will discuss some of the challenges
faced by large cosmetic companies when devising and implementing sustainability
programs. With French legislation possibly banning the use of parabens in cosmetic
products, the workshop goes through the green preservative options and assesses
the related adoption issues.

48

SWOT Matrix & Analysis

/ Internal Environment

Strengths

Strong Brand Image, locally and Internationally

Perceived high quality standards and products
High Brand Awareness among men and women
Knowledge of different cultures and rituals worldwide: can adapt its products
Portfolio of International brands in different distribution channels (23 global
brands, including LOreal Paris, Garnier, Maybelline NY, YSL Beauty, Biotherm)
Strong Research and Development departments- constant innovation (612
patents filed in 2010)
Strong advertising: through product placement, television ads, social medias,
and books.
Diversity of beauty products and services: skin care products, cosmetics, hair
color, hair care, styling, hair-dressers. Mens line means more selling
opportunities, and meeting the needs of more people.
49

 Positive social responsibility image: campaign for the fight against ovarian
cancer, partnership with WIN (women in need) to help women achieve their
goals through workshops
Increase in operating profit from 2009 to 2010: they are doing well, despite
the economy.
Dividends have increased by 20 percent in 5 years: attractive to shareholders

Weaknesses

Internal family disputes on heritage and company control

High investment in constant innovation means high risk of failure (loss of
money)
Their smallest cosmetic production and sales is in North America
Decentralized organizational structure: with so many brands under its name,
the company is hard to control: slowing down the production of the company
Hard to know who is accountable/responsible for problems relating to one or
another brand of the company

50

 Worldwide marketing strategy that adapts to the culture:

blurring of the

company image

/ External Environment

Opportunities

Market development in untapped countries such as Korea and the South East
Technological advancement creates new markets and advertising medium
opportunities: social media, online website
Growing demand for beauty products (trend): hairstyling, color, skin care, and
perfumeries
Growing affluent market
Growing aging market in Western countries
Growing market in developing countries (Asia): aspiring customers in
emerging markets
Men growing interest in beauty
Cultural growing interest in aesthetic beauty
Growing concern for UV protection and minimize aging of skin

51

 Growing concern for the environment and environmentally friendly products

Growing demand for toxic-free, quality products that last
Life expectancy rate increase
Attitude towards France in positive

Threats

Increasing competition from pharmaceuticals

Cosmetic surgeons, and trend towards cosmetic surgery with TV shows, etc.
Image of beauty is changing towards a more natural look, makeup-free
On-going, lasting recession
Unemployment rate keeps increasing, meaning people have less disposable
income, are more conservative
Bank issues right now: Wall Street campaign is one of them
Wars and conflicts in developing countries: hard to approach these markets
Increase government policies and regulations on cosmetics: may increase
production price
Increase in price of oil and transportation: global distribution gets expensive

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/ TOWS MATRIX

Strengths

Weaknesses

S1 strong brand image and brand awareness W1 Internal family disputes on heritage and
locally, and internationally.

company control

S2 Perceived high quality standards and

W2 Weak in the North American market: smallest

products.

production and sales

S3 Knowledge of different cultures and

W3 Decentralized company structure means hard

rituals worldwide and so can adapt its

to control: slows down company production and

products.

weaken image.

S4 Portfolio of international brands: more

W4 Hard to know who is accountable for

markets.

problems with all these different brands in one

S5 Strong advertising

company.

S6 Diversity of beauty products to answer

W5 Worldwide marketing strategy that adapts

the needs of more markets.

product and advertising to the culture: blurs image

S7 Positive social responsibility image.

of company.

S8 Increase in operating profit means strong W6 Continuous innovative ideas and products
management.

required: high R&D costs, and so high risk

S9 Dividends have increased, meaning they

attract more investors.
S10 Custom-tailored individual training of
employees through Internet platform

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Opportunities

SO Strategies

WO Strategies

O1 Market development in untapped

1. Use worldwide brands and distribution to

1. Restructure company to better understand who

countries such as Korea and the South

expand to other countries such as Korea

East

(market development)

O2 Technological advancement creates

2. Invest in development of environmentally- 2. Target new market in developing countries: will

new markets and advertising medium

friendly products (product development)

opportunities: social media, online

3. Invest in development of cosmetics for the development)

website

aging populations (product development)

3. Refocus the brand image by re-centering on

O3 Growing demand for beauty

4. Use strong advertising to reach to male

French roots

is accountable for what, increase communication

between different divisions
not require more investment in R&D (market

products (trend): hairstyling, colour, skin market (market penetration)

4. Increase marketing in North America, especially

care, and perfumeries

to the aging, and male population (market

O4 Growing affluent market

penetration)

O5 Growing aging market in Western

5. Reorganize authority of different divisions by

countries

geography to speed up production and decision-

O6 Growing markets in developing

making (decentralize but more communication)

countries of Asia: aspiring customers

O7 Male growing interest in beauty
O8 Growing concern for UV protection
and minimizing aging
O9 Growing concern for environmentally
friendly products
O10 Positive attitude towards France
(LOreal)
O11 Life expectancy rate increase

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Threats

ST Strategies

WT Strategies

T1 Increasing competition from

1. Use strong advertising in campaign against 1. Sell-off some brands that are less profitable

pharmaceuticals

plastic surgery

(Divestiture)

T2 Trend towards cosmetic surgery has

2. Acquire competitors (pharmaceutical

2. Emphasize cost-reduction without losing quality:

increased with TV shows, etc.

companies) to increase Western market share economies of scale, domestic production, and

T3 Image of beauty if changing towards are reduce threat (horizontal integration)

better management.

a more natural, makeup free look

3. Develop products/cosmetic for natural

3. Increase communication and combination of

T4 Lingering recession and slow

look (product development)

expertise of different brands to reduce redundancy

economic growth: reduced consumer

4. Bring back some of the manufacturing

of some roles and costs.

spending

domestically by acquiring domestic

T5 unemployment rates keep increasing, distributors/manufacturers (forward

people have less disposable income and integration)
are more conservative

5. Develop products that last longer, so

T6 Bank issues such as Occupy Wall

customers feel like they get more for their

street: makes people scared of spending money

T7 Wars and conflicts in developing
countries makes it hard to approach
those markets
T8 Increase government policies and
regulations on cosmetics may increase
prices.
T9 Exchange rate fluctuations
T10 Increase in oil and transportation
price: global distribution gets expensive.

55

Recommendations

According to the SWOT analysis and Matrix, here is an analysis of each

recommended strategy:

/ Market Development
Use worldwide brands and distribution to expand to other countries
such as Thailand, Saudi Arabia, and Vietnam.

Advantages & Benefits

Increase in untapped market share abroad.

Increase in international brand awareness.
Economies of scale: quickly, by expanding the number of stores and
distribution, it will become cheaper to sell to the growth markets.
Use strong knowledge and adaptation of products to culture.

56

 Expansion of one brand helps the expansion of the other brands in the
market easier.
Can attract investors and shareholders from the new markets: Saudi Arabia
shareholders for example.
Online training means no need for people from headquarters to relocate to
growth markets.
Can market existing products, no need for additional innovation and R&D
since those products will already be new to these markets.

Disadvantages & Costs

Expensive market research before entering the market

Market and government regulations may be costly or hard to meet
Distribution to these markets will increase transportation and distribution
costs
Risk of failure to meet demand of new markets

57

/ Market Penetration

Examples of such are as follows, use strong advertising to reach male

market, promote environmentally friendly products, or campaign against
plastic surgery.

Advantages & Benefits

No additional investment in R&D expenses needed

Will generally improve the image of LOreal and brand awareness
Increase male market share
Target environmentally responsible people
Improve public relations
Secure market share against substitutes as this industry has relatively high
buyers bargaining power due to similar product offerings within the industry.

Disadvantages & Costs

Risk of diluted perception of LOreals brand image.

Risk of blurring the image of the company further by opening to new markets
58

 Costs of heavy advertising in magazines and TV spots

/ Reorganize & Restructure

Restructure the company and the authoritative hierarchy of each division

within LOreal. Continue to decentralize and implement divisional
organization structure by geography in order to optimize production
time and efficiency.
Increase communication between all product divisions through
mandatory divisional meetings to decrease unnecessary costs and share
expertise between all LOreal products.

Advantages & Benefits

Will speed up production and give innovation leadership to LOreal

Will give competitive advantage over companies that do not possess several
brands
Will avoid redundant costs; therefore utilize the additional funds towards
investing in R&D.

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Disadvantages & Costs

This means there will be a need for a change strategy: for such a big
company with so many different divisions the change strategy approach will
need at least two phases:

The first phase will be the Board of Directors that will need to agree on
the strategy and then impose a schedule (force strategy) to implement
the strategy for all the different division heads.

The second phase constitutes the head of divisions using a rational

strategy approach to implement the change in their divisions, by
meeting with all the managers and come up with the best
implementation.

This type of reorganization needs a lot of communication and organization

between the different divisions, which may be costly and time-consuming in
the short-term.
It may be hard to convince the different divisions of the long-term benefits of
this strategy.

60

/ Implementing Change

LOreal has a highly complex structure, with numerous brands and

decentralized branches. Thus, implementing change throughout the whole company
will have to be done using several change strategies at each stage and level of the
company.
CEO and board members will have to come together and discuss the changes to be
implemented using EDUCATIVE CHANGE strategy.
Then, they will use a RATIONAL and FORCE CHANGE approaches to directing
to managers and heads of the different brands about what the changes will be.
The managers will then use EDUCATIVE and FORCE CHANGE strategies to
implement those changes at the operational level of the different brands.
A tight but realistic schedule will have to be set up, to make sure all brands
make the changes necessary relatively concurrently. In such a huge company, for
strategy implementation to be effective and not too slow, force change approaches
will be necessary on some levels of the company.

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Citations
i

http://strategyonline.ca/2008/06/01/tributeloreal-20080601/

ii

http://www.cosmeticsdesign-europe.com/Business-Financial/L-Oreal-unveils-three-pronged-

strategy-for-future-growth
iii

http://www.loreal.com/_en/_ww/html/our-company/mission.aspx?

iv

http://www.csrglobe.com/login/companies/loreal.html

http://www.cosmeticsdesign-europe.com/Business-Financial/Report-slams-L-Oreal-

management-and-predicts-tough-2009
http://www.article13.com/A13_ContentList.asp?strAction=GetPublication&PNID=112
http://www.article13.com/A13_ContentList.asp?strAction=GetPublication&PNID=191
http://www.greenbook.org/marketing-research.cfm/high-end-cosmetics-trends-in-china
http://www.skininc.com/spabusiness/trends/27240294.html?page=1
http://beauty.about.com/od/makeuptrickstips/a/beautrend.htm
http://www.sltrib.com/sltrib/money/51028456-79/cosmetics-industry-marketproducts.html.csp
http://www.fda.gov/Cosmetics/default.htm
http://www.csrglobe.com/login/companies/loreal.html
http://www.loreal.com/_en/_ww/html/our-company/mission.aspx?

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