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.
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
Research Objectives and Topics
The research paper examines how L’Oréal S.A. can increase its market share in the fragrances sector in China by applying the theoretical framework of global strategy development according to Bartlett and Ghoshal (1989).
- Application of the Bartlett and Ghoshal global strategy theory to a specific case study.
- Analysis of the Chinese fragrances market trends and growth potential.
- Investigation of consumer behavior and cultural differences in the Chinese cosmetics industry.
- Evaluation of L'Oréal's current strategic positioning and local adaptation methods in China.
- Identification of growth opportunities, specifically within the male grooming and fragrance sector.
Excerpt from the Book
2.2.4 Explanation of other aspects of research that could influence results
The global trend of increasing sales of men’s cosmetics products is surely a reaction to increased competition in the workforce during global recessions, with physical attractiveness playing a more important role in success.62 The increased number of men taking a more active role in household shopping worldwide is surely an aspect that influenced this research as well. Additionally as men are outnumbered by women in China, more men use cosmetics to set themselves apart.63 One very important factor that influenced this research is the growing purchasing power of Chinese people and their willingness to spend a lot of money on beauty products.64 One likely reason why the cosmetics market in China is developing this fast just now is that authorities stopped discouraging cosmetics only about 20 years ago.65
Summary of Chapters
1 Introduction: This chapter introduces the theoretical approach of Bartlett and Ghoshal regarding multinational companies and defines the dilemma between global consistency and local responsiveness.
2 Body: This section covers the research question, the methodology used to analyze the market, and a discussion of the results based on industry data and theoretical frameworks.
3 Conclusion: The concluding chapter addresses the limitations of the research, discusses the practical business utility of the findings, and provides a final answer to the research question regarding market expansion.
Keywords
L’Oréal S.A., China, Fragrances, Global Strategy, Bartlett and Ghoshal, Multinational Companies, Market Share, Local Responsiveness, Cosmetics Industry, Consumer Behavior, Market Trends, Male Grooming, Business Strategy, International Marketing, Economic Growth.
Frequently Asked Questions
What is the fundamental focus of this research paper?
The paper examines how a multinational corporation, specifically L’Oréal S.A., can navigate the challenge of maintaining global brand consistency while successfully adapting to the specific demands of the Chinese fragrance market.
What are the central thematic fields covered in this study?
The study centers on international marketing strategies, the practical application of organizational typologies for multinational companies, and a detailed market analysis of the Chinese cosmetics and fragrance sectors.
What is the primary research question?
The primary research question asks: "How can L’Oréal S.A. increase its market share in the fragrances sector in China?"
Which scientific methodology is employed?
The research adopts a descriptive, deductive approach utilizing secondary data and the theoretical typologies of Bartlett and Ghoshal, as extended by Harzing, to analyze the company's organizational and strategic behavior.
What topics are addressed in the main body of the work?
The body addresses the research methodology, analyzes the Chinese fragrance market through current growth data, discusses local consumer trends, and links these findings to the "local responsiveness" strategic typology.
Which keywords best characterize this research?
Key terms include L’Oréal S.A., China, Fragrances, Global Strategy, Bartlett and Ghoshal, Multinational Companies, Local Responsiveness, and Male Grooming.
How does the author evaluate the "local responsiveness" of L'Oréal?
The author concludes that based on the observed data and Harzing’s typologies, L'Oréal operates as a transnational company, balancing global integration with the necessity of local market adaptation.
What specific recommendation does the author provide for market growth?
The author recommends that L’Oréal should invest heavily in the male fragrance sector, citing it as an underserved niche with strong growth potential due to changing social norms and increased purchasing power in China.
- Quote paper
- Mona Carolina Frank (Author), 2012, L'Oréal in China , Munich, GRIN Verlag, https://www.grin.com/document/231914
