The Case Analysis of L’Oreal Corp. as Market Leader

Abstract

Purpose The purpose of this paper is to describe how one company built and sustained market leadership by implementing a market-oriented business strategy and focuses on the use of real financial data for financial ratio analysis. With an historical approach, this case study examines L'Oreal's financial ratio analysis and industry analysis. The objective of this study is that to describe about the performance of the L'Oreal by using the ratio & industry analysis. Financial ratio analysis, trend analysis, common size analysis and DuPont analysis are applied for 9 years financial data of L'Oreal. It discovered that the reason of L'Oreal as market leader in its industry diversified cosmetics products that have different characteristics. It is managing effectively and efficiently in their operations. It also discovered that strong short and long term solvency position, high profitability, highly loyal customer, broader network expansion and the highly innovative products are major factors of its success. This case demonstrates the tricky situations of financial analysis of the L'Oreal and offers a practical example that can help companies reconsider how they differentiate themselves from competitors with respect to market conditions.