The second pillar of the strategy is innovation

In the male popular imagination, the ideal woman is often the opposite. More fantasy that it is remote, inaccessible, or even incomprehensible. American rave in the sophistication of the Parisian tour, the French before the ardour of the Italian, the Chinese before the submission of the Japanese. L ' Oréal, the top, are the Brazilian hair of amber. Step for their impeccable plastic, but because that it took at least two showers a day! And for Taming the rebel mane they use a minimum of three products each time. A challenge such as loves them the French champion of beauty. As he loved passionately previously for other women also interested. The Japanese, for example, with six layers of cream which they would coat every day to to make a skin of porcelain. The dream woman "loréalienne" CAP as a Brazilian, is treated as a Japanese and scented like a French. In short, it consumes and spares no expense on being beautiful.

This dream of teenager resist the crisis It is the question that arise in these great poets that are financial analysts. Since a few months they worry. Their value honey, able to grow in double digits for more than twenty years, knows weaknesses first. Over the past year, the objectives are regularly reviewed downward. A world of cosmetics number patina with the crisis, and sometimes harder than some of its competitors, such as German Beiersdorf (Nivea) or the American Procter & Gamble. And then there is this fundamental uncertainty on the future of the group. Nestlé holds more than a quarter of the Group and will have the right in a month to buy the part of the family Bettencourt (28), very busy at this time to send the crockery in figure.

To understand what is happening, he must go back to the source of the Group and its strategy. It is based on two main principles, erected from the foundation of the company in 1909: focusing on the trades of the beauty and the innovation bonus. Unlike most of its competitors, l ' Oréal has made the choice that explore a single territory, that of cosmetics, wide of more than 100 billion dollars in the world, but to explore thoroughly. Party colour of hair, specialty of the inventor-founder-entrepreneur Eugène Schueller, the l ' Oréal range and his twenty-five marks cover the entire spectrum of the beauty. The care of the hair for hairdressers, course (15 of sales), consumer products, which now provide half of the turnover and of the world market. This is where you will find the most impressive competitors such as Procter & Gamble, Unilever or Beiersdorf, and then the luxury (20), battle of Estée Lauder, LVMH and Chanel, and finally the parapharmacy or even The Body Shop.

This complete coverage of the range to limit the risks since these different business cycles are very different. Luxury is for example more capricious, it plunges into crisis, but gets more quickly and strongly as the rest. To further dilute the risk and find growth relays, the firm is naturally a party to the conquest of the international: Europe in the 1980s, America in the 1990s, the emerging countries in the 2000s. And here is the first explanation of the current crisis. These two, the United States and Europe, first victims of the economic crisis, almost represent three quarters of global sales.

The second pillar of the strategy is innovation. When a "loréalien" wants imager it, it convenes emergency Eugène Schueller, the foster father. He said: "A penny of cost more, it is a huge addition to public price." Translation, it is the money invested in upstream (on the research and marketing) which allows more expensive to sell its product. L ' Oréal sells not (assigned in the 1960s) SOAP or even vulgar shampoo, but "technical products". Those that require research and are sold with the famous "premium Award", these 10 to 20 more that allow the company to show rates of margin of 16 to 18 on all its products. The firm is investing 3 of its turnover in research and produces almost all of its products in its factories.

The development in music of this strategy is based itself on two solid pillars: a policy of targeted acquisitions and an exceptional managerial culture. Each new explored territory is the purchase of a brand. Garnier for the care of public hair, Lancôme, Armani, Ralph Lauren luxury and then Biotherm, La Roche Posay, Vichy for the skin. The mystery of Japanese skin required the purchase of Shu Uemura, that the acquisition of Maybelline and Redken American beauty. Last acquired brand, Yves Saint Laurent beauty in 2008. A jewel with high potential. Each time, the mark is integrated, digested and globalized, keeping its original identity. Therefore the Chinese have the choice between l ' Oréal Paris, the Maybelline New York or the Shu Uemura Tokyo.

This complex mechanical needs lot of oil to operate smoothly. It is the managerial culture that ensures the proper functioning. In their book on the l ' Oréal, two researchers of the ESCP-EAP model (1) to have dissected the workings. It relies on a few values keys, such as the passion of the product, the curiosity of others, customers or competitors, internal sharing, external discretion and the cult of entrepreneurship which gives autonomy to the leaders of division or subsidiary and resemble the Group an assemblage of SMEs. L ' Oréal does not hunting the brain drain among competitors. It is on the campus of schools that the firm operates to find spirits, talented but blank of any influence in shaping time of training and mobility within the group. Here is passionate, stressed out, well paid and faithful.

Says Daniel Rouach ESCP, one of the main limitations of the l ' Oréal model lies precisely in this very informal culture, which more resembles that of a clan, blood relationship and oral tradition, as that of a multinational where everything is written and is based on the contract. The l ' Oréal vat culture - it to dilute that she met cultures more remote from its core values Aware of the risk, the firm was reorganized its functioning, appointed officials from area, established unified management software (SAP). It gradually enters a little boring order large structures. A form of normalization inevitable but which puts an end to the magic of the l ' Oréal growth. The French notabilise from where also the slowdown in growth. The conquest of the Brazilian and the Vietnamese, Indonesian or Senegalese women tomorrow is the price.