Vertical Brand Extension Strategy of L'Oreal Group

Abstract

To compete in the current cosmetics market, strategic changes are needed according to the target market. Therefore, in this study, L'Oreal Group, the No. 1 global sales company, was selected as the subject of the study to study vertical brand expansion strategies used within the cosmetics industry. The purpose of the study is to analyze the vertical brand expansion strategy of L'Oreal Group and examine its effectiveness. The method of research is qualitative research that considers degree papers, journals, related books, and accounting materials from 1995 to 2020 by the L'Oreal Group. The results of the study are as follows. First, after examining L'Oreal Group's vertical brand expansion strategy, it was found that it used strategies such as ‘Mergers and Acquisitions of Various Brands’, ‘Brand Management by Business Department’, and ‘Localization’. Second, looking at the vertical brand expansion effect of L'Oreal Group, it was found that it gained the effect of ‘Increasing Sales’, ‘Strengthening Brands’, and ‘Ease Market Access’. Therefore, it can be concluded that the effect of a differentiated vertical brand expansion strategy played a role in L'Oreal Group's growth into the world's No. 1 cosmetics company. This suggests that utilization based on success stories is important, not indiscriminate application of vertical brand expansion strategies. We hope that further research will be conducted on the vertical brand expansion and online business trends of cosmetics companies in the future.