Optimization of an International Company Product Portfolio in Emerging Economies: the Case of L’Oréal

A product portfolio, which is a crucial component of a corporate strategy, is important for a success of an international company on the markets. In particular, in the cosmetics industry mergers and acquisitions is a common method to optimize the product portfolio. Today, the role of fast growing markets in international business is increasing, and many companies are striving to develop their activities there. For this goal a company should have a competitive product portfolio. The aim of the present paper is to develop ways to optimize the product portfolio of the largest cosmetics company L’Oreal in fast developing markets in order to improve its positions there. The BCG and McKinsey matrices analysis of the positions of L’Oreal product categories in the fast developing markets of China, India, South Korea, Brazil and Russia using will help to evaluate whether the company's product portfolio in these markets is optimal. The results of the matrix analysis and assess of the global position of the L’Oreal in categories will provide recommendations for optimization of the company's product portfolio. Business valuation of the main competitor of L’Oreal in South Korea using the capital market method will help to determine the cost of mergers and acquisitions for L’Oreal. The results of the study may be useful for companies that want to improve their product portfolio in emerging markets. Key words: corporate strategy, product portfolio, BCG and McKinsey matrices, mergers and acquisitions, L’Oreal, emerging markets