The Business Report Of Strategic Management Assignment (Lab Report Sample)

Running Head: Strategic Management
Strategic Management
[Name of the Writer]
[Name of the Institution]
Biz Environment and Strategic Management
Introduction
The purpose of this business report is to focus on the strategic capabilities and core competencies of Loreal and to understand the importance of strategic management and incorporate strategies by considering resource based view of Loreal. Loreal is the one of the most well-known company that has its operation worldwide. The company produces largest products related to cosmetics and beauty products with a wide variety of options for the customers that includes hair and skincare products, perfumes and all cosmetics products. The company generated sales of €19.5 billion in the last year. Loreal is a global brands that has its production line among different countries in both domestic and international market. Loreal has greater market share in UK and in other international market. The company is operating worldwide and owns 39 factories in the international market. The company produces 6 billons products in the year globally. Therefore, Loreal Company are incorporating strategic management tactics in order to achieve competitive advantage CITATION Rot15 \l 1033 (Rothaermel, 2015). It is important for the managers to develop strategies and execute them into the actions to create long term competitive advantage that help the firms to achieve its long term goals and objectives.
As a senior manager, there are many recommendations and suggestions for the company to build strong brand image and obtain competitive edge in the market in order to compete with the competitors in the highly competitive business environment. In order to utilised the core competencies and strategic capabilities and acquire greater market share, the company has identified different strategies. In this report, the strategic management and strategic capabilities are focused in order to identify the core competencies and competitive advantage of Loreal in the cosmetics and beauty care products industry CITATION Sch14 \p 179-203 \l 1033 (Schilke, 2014, pp. 179-203).
By incorporating the strategic management tactics and utilizing strategic capabilities, the company are able to utilize the resources effectively. An example of strategic capability includes a Loreal capability to launch a product in the market before its competitors. This helps the company to get upper hand in the consumer market as it makes difficult for the competitors to replicate the product that are already launched in the market CITATION Bha13 \p 471-482 \l 1033 (Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013, pp. 471-482). The strategic management tactics and Loreal capabilities jointly form the differentiation strategies and help the company to achieve the competencies that includes cost advantage and differentiation advantages.
Discussion
Loreal Company has recognised that the strategic capabilities and strategic management tactics are significantly important for the company to compete in the highly competitive business environment. The Resource based view of Loreal are the most powerful methodology that helps the managers to understand the company’s operation and their distinctive competencies that helps them to develop competitive strategies in the future to achieve long term objectives CITATION Bar12 \p 3-6 \l 1033 (Barney, 2012, pp. 3-6). The basic objective of Resource based view is to focus on the strategic capabilities of Loreal Company that provide them with the competitive edge in the market.
Resource Based View (RBV) of Loreal Company
The importance of the Resource based view of the firms to the managers is that it provides opportunity to the management to focus on the entire operations and activities of the firms in the global environment. In order to identify the competencies of a firm, it is important to classify the strength and weakness of the firm. The managers need to analyse and examine the external environment to discover the opportunities and threats that helps the firm to gain the competitive advantage. Loreal has three current techniques: expanding its client base, evolving business operations and capacities, expanding cost in examination and improvement furthermore, advancement and publicizing CITATION Ham13 \p 5-39 \l 1033 (Hamel & Prahalad, 2013, pp. 5-39). The resource based view of Loreal Company allows managers to develop and identify the firm resources, internal capabilities and competencies that help them to obtain the long term objectives.
In order to obtain the competitive advantage has brought this system into core interest. To counter the deficiency, expanding the buyer base will permit the organization to focus on available advancement. Loreal is additionally extending topographically. The organization is moving into the Latin American and Eastern European markets for body spray’s and scents, which have been an exceptional achievement CITATION McG13 \l 1033 (McGrath, 2013). The resource based view helps the managers to classify and managed the firm’s capabilities and resources to develop the strengths and weaknesses. The managers can use this resource based view approach to unite the firm’s potential and strengths into core competencies and strategic capabilities.
Loreal has been concentrating on streamlining, directing, rearranging and making their business more effective. These progressions have brought about proceeded with mechanical reengineering of the business in each angle, including conclusion of wasteful generation offices, centralization of obtaining procedures, better use of gear and significant advances in efficiency CITATION LiD14 \p 2793-2799 \l 1033 (Li & Liu, 2014, pp. 2793-2799). In order to obtain competitive edge in the market, the resource based view help the managers to implement the strategic management tactics that takes advantage of the capabilities and competencies of the firm’s and associate them with the external opportunities.
The resource based view helps the Loreal Company to discover the loopholes within the firms and its resources. The resource based view techniques are significantly important for the managers to utilise the strategic capabilities in eliminating the threats and weaknesses that Loreal Company encounter. To gain competitive edge in the market and obtain greater market share, the resource based view helps the mangers of Loreal Company to identify the distinctive competencies that is beneficial for the survival of the firm due to global competition in the business environment CITATION Tee14 \p 8-37 \l 1033 (Teece, 2014, pp. 8-37). And thus the resource based view methods are essential for Loreal Company to ensure the sustainability of internal and external capabilities and distinctive competencies of a firm.
In the last year, the Loreal Company began to effectively expand R&D. This contributes significantly to the development viability, quality and security of the items, which in return gives the organization an upper hand. Loreal underpins its business development by expanding costs in advancements and publicizing CITATION Sla15 \l 1033 (Slack, 2015). Thus, the resource base theory helps the managers to achieve more success within the emerging market in the business environment.
The managers of Loreal Company can use resource based theory as a framework to utilise the strategic capabilities and resources as the foundation for a long term goals of the company. The resource based approach help the Loreal Company by providing direction for firms that can be used as a strategic management tactics to capture the consumer market and obtain greater market share. Thus the framework facilitates Loreal Company to boost the level of sales and increase profitability CITATION War16 \l 1033 (Ward & Peppard, 2016). The resource based theory facilitates the managers of Loreal Company to utilise the value-added capabilities efficiently and to make use of the core competencies of the firms as strengths and opportunities in order to achieve efficiency and effectiveness in the performance of firm.
The Loreal Company can take several advantages by emphasising on the research based theory as a guideline to develop the strategies that help the firms in the future to achieve its vision and goals. It allows the Loreal Company of the firms to compete in the international market and to focus on the market driven requirement that is generated by the demands of the customers CITATION Hil14 \l 1033 (Hill, Jones, & Schilling, 2014). It facilitates the managers to repeat the methods and procedures that led to successful tasks in the past. And it also helps the managers in order to avoid the repetition of the same mistakes in the past. Thus the resource based theory help out the Loreal Company to benefit from the distinctive competencies that lead to greater profitability and increase in the level of performance.
Importance of Capabilities Driven Strategy
Due to global competition in the business market, Loreal Company follow capabilities driven strategies. The managers of Loreal Company associate the firm’s capabilities with their strategic direction that facilitate them to acquire distinctive competencies that make them unique and are able to utilise the differentiations strategies effectively CITATION Wes15 \l 1033 (West, Ford, & Ibrahim, 2015). There are three factors that need to be considered in order to understand the significance of the capabilities driven strategy of a Loreal Company.
Way to Play
It is important for a Loreal Company and the management to have a clear objective regarding the ways of how to create a value for the customers and to acquire greater market share of the consumer market.
Capabilities System
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