L'Oréal in China

How can L’Oréal S.A. increase its market share in the fragrances sector in China?

This research paper is dealing with the issue of multinational companies (MNCs) which want to operate successfully by using the theoretical approach of Bartlett and Ghoshal. Begley and Boyd go on from Bartlett and Ghoshal’s scientific findings and describe this challenge as the dilemma of “global consistency versus local responsiveness”. Therefore there is no general best global strategy.

The best way to operate in a certain market depends on the company’s environment and on its aim. The Globalization Strategy seeks for efficiency whereas the Multidomestic Strategy seeks for effectiveness. To be more precisely: according to Gupta and Govindarajan the general aim of the Globalization Strategy is expanding the economies of scale and scope and the general aim of the Multidomestic Strategy is the local adaption of products, services and processes. Consequently by using this strategy a company can increase market share, improve price realization and be able to compete better against local competition. But with the Globalization Strategy it can spread fixed costs, reduce capital and operating costs per unit and gain price advantage of suppliers.

While MNCs have to take into consideration a number of disadvantages when using one of these strategies, Bartlett and Ghoshal who were the first ones to provide a useful typology of MNCs, are sure that for most worldwide companies the key to global success is, being able to manage and coordinate their operations without losing flexibility. A MNC should be able to “think globally and act locally”. This requires the combination of both mentioned strategies and corresponds to the Transnational Strategy.

Inhaltsverzeichnis (Table of Contents)

• 1 Introduction
• 2 Body
  • 2.1 Research Question
  • 2.2 Methodology
    • 2.2.1 References to previous use
    • 2.2.2 Description of how theoretical approach was used
    • 2.2.3 Explanation of how data was analysed or theories were applied
    • 2.2.4 Explanation of other aspects of research that could influence results
  • 2.3 Discussion of results
• 3 Conclusion
  • 3.1 Weaknesses
  • 3.2 Usefulness for society and business.
  • 3.3 Indication or areas where further research could be applied
  • 3.4 Answer question

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This research paper examines the strategies multinational companies (MNCs) can utilize to achieve success in the global market, specifically focusing on the theoretical framework of Bartlett and Ghoshal. The paper explores the challenge of balancing global consistency with local responsiveness, highlighting the dilemma of choosing between a Globalization Strategy emphasizing efficiency and a Multidomestic Strategy focusing on effectiveness.

• The dilemma of global consistency versus local responsiveness.
• The effectiveness of different global strategies (Globalization, Multidomestic, Transnational).
• The application of Bartlett and Ghoshal's framework in the context of the cosmetics industry.
• The specific case of L'Oréal S.A. and its market share in the fragrances sector in China.
• The challenges and opportunities associated with operating in the Chinese market.

Zusammenfassung der Kapitel (Chapter Summaries)

The introduction provides a concise overview of the research paper's objectives, introducing the theoretical framework of Bartlett and Ghoshal and highlighting the concept of global consistency versus local responsiveness. Chapter 2 delves into the research methodology, including references to previous research, a description of the chosen theoretical approach, and an explanation of how data was analyzed. This chapter also discusses the aspects of the research that could influence results. Finally, the discussion of results section offers an analysis of the findings.

Schlüsselwörter (Keywords)

The research paper focuses on global business strategies, multinational companies, globalization, multidomestic strategy, transnational strategy, Bartlett and Ghoshal's framework, global consistency, local responsiveness, market share, cosmetics industry, fragrances sector, and China.

Details

• College: Karlshochschule International University (BWL - International Marketing Strategy)
• Course: BWL - International Marketing Strategy
• Grade: 1,9
• Author: Mona Carolina Frank (Author)
• Publication Year: 2012
• Pages: 17
• Catalog Number: V231914
• ISBN (eBook): 9783656486800
• ISBN (Book): 9783656491231
• Language: English
• Tags: oréal china l’oréal