SECTOR RESEARCH PROJECT
For our Sector Research Project we had to choose two companies in the same industry. We wanted to choose a sector concerning us as customers. That’s why we have chosen cosmetics. But the two companies need to be different enough in order to be compared clearly. That’s why we thoughtabout L’Oreal and Chanel. Even if they sell the same kind of products, they don’t concern the same customers. Indeed Chanel’s products are more expensive and are part of the luxury sector.
To obtain informations about the two firms, the first things we searched for were their Head office and web site. For Chanel we have found: 135 av. Charles de Gaulle 92521 Neuilly sur Seine France,www.chanel.com; and for L’Oreal: Centre Eugene Schuller 41 rue Martre 92117 Clichy France, www.loreal.com.
I) COMPANIES’ HISTORY
Born in 1883, Gabrielle Chanel is nicknamed « Coco » because of a song. She opens her first shop in 1910 in Paris. Ernest Beaux helps her to create Chanel n°5 in 1912. The famous answer of Marilyn Monroe to which a journalist required what she was wearingat night: “Some drops of Number 5” is an excellent slogan. Since then, Number 5 has become a key product of Chanel. After the creation of some other fragrances, Mrs Chanel established herself at Ritz. Between 1983 and 1996, Karl Lagerfeld old from Balmain and from Patou, is seen entrusting the fashion clothing and Jacques Polge deals with perfumes. Nowadays, fashion glasses and jewellery are partof the key products too. Chanel has become a legend, and there is even a film about Gabrielle Chanel’s life.
In 1907, Eugene Schueller, a young chemist, develops the first colouring for hair (called Auréole). He sells his product to the hairdressers in Paris. In 1909 he names his company “Société française de teintures inoffensives pour cheveux” which will become Oréal later.In 1920 their were three chemists, into 1950 the teams of research counted 100 people, 1000 in 1984 and more than 2500 nowadays. Since 1912 Eugene Schueller exports his products. Today the group Oréal is present in all the countries of the world. In 1933 he creates the magazine “Your Beauty”. Since 1937 the famous “réclame” DOP on the radio makes swing the whole France. And in 1953, L’Oréal wonits first Oscar of publicity, the first of a long series. But L’Oréal is well-known thanks to a lot of key products too: Immédia(1929), Dop(1934), Ambre Solaire(1936), Oréol(1945), Elnett(1960), Dercos(1964), Récital(1966), Maquimat(1966), Minivagues(1967), Elsève(1972), Eau Jeune(1977), Anaïs Anaïs(1978), Dakkar Noir(1982), Plénitude(1983), Studio Line(1985), Trésor(1990), Capital Soleil(1993),Amor Amor(2003).
II) INTERNAL ORGANIZATION
The legal structure of Chanel is a SAS (Société par Actions Simplifiés) in French, versus L’Oréal , which is a SA (société anonyme). The difference between both is the presence on the stock exchange market, indeed L’Oréal is divided in shares which cost 56.65$ each.
L’oréal is on the stock exchange market becauseit is a bigger firm, indeed, there are more employees in L’Oréal than in Chanel:
In L’Oréal there are 50500 employees of 98 nationalities around the world, however, in Chanel are working more than 3,000 employees just in France.
There is also quite a difference of structure between the two companies.
Chanel’s corporate structure is more traditional than the corporate structureof l’Oréal; Chanel has chosen a corporate structure divided into different departments like financial department, human resources department…
L’Oréal prefers a different structure: their departments are divided by consumer targets and products: there is a division for luxury production, another for only the cosmetics , the consumer product department and the professional product department....