Mona Carolina Frank

L'Oreal in China: How can L'Oreal S.A. increase its market share in the fragrances sector in China? Mona Carolina Frank

Scholarly Research Paper from the year 2012 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 1,9, Karlshochschule International University (BWL - International Marketing Strategy), course: BWL - International Marketing Strategy, language: English, abstract: 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.