Unit 38 Business And Economic Environment P5 M3 European And Global Factors
European & Global Factors
In this report, I will be exploring the European and global factors that occur within the economic environment. The business I have chosen to refer to is L’Oreal.
The European Union is a union consisting of 27 countries that have an agreement of free trade. This is when the countries within the EU can trade with each other without any tariffs. They all use the same currency which is Euros apart from the UK and Gibraltar who use GBP (Great British Pound). The advantage of this for L’Oreal is that it allows them to expand in other countries such as France, Spain and Italy without being charged any extra fees for selling and trading within that country. It also allows L’Oreal to invest in other EU countries if they wanted to when the interest rates are higher for a larger return. On the other hand, because they would be trading and selling in other countries, they would have more competition within their market. So if L’Oreal were trading and selling in Spain, there may be a better known and more established hair care brand that L’Oreal would have to compete with. Another disadvantage is that some EU countries may have a weaker currency or could be in debt so L’Oreal would need to invest at a good time. L’Oreal may need to use marketing techniques such as using a Spanish celebrity to promote their products in order for them to appeal to the Spanish.
Globalisation is the process of the world becoming interconnected due to increased trade and cultural exchange throughout different countries. I will now explore the advantages and disadvantages of L’Oreal globalising their brand.
The advantage of globalisation is that L’Oreal would have an increase in sales and more purchases since they would be expanding to a different country. They would also become globally recognised as a brand which will also contribute to an increase in sales. However, if the state of the economy in the country they have chosen to expand to may fail which would mean that
In this report, I will be exploring the European and global factors that occur within the economic environment. The business I have chosen to refer to is L’Oreal.
The European Union is a union consisting of 27 countries that have an agreement of free trade. This is when the countries within the EU can trade with each other without any tariffs. They all use the same currency which is Euros apart from the UK and Gibraltar who use GBP (Great British Pound). The advantage of this for L’Oreal is that it allows them to expand in other countries such as France, Spain and Italy without being charged any extra fees for selling and trading within that country. It also allows L’Oreal to invest in other EU countries if they wanted to when the interest rates are higher for a larger return. On the other hand, because they would be trading and selling in other countries, they would have more competition within their market. So if L’Oreal were trading and selling in Spain, there may be a better known and more established hair care brand that L’Oreal would have to compete with. Another disadvantage is that some EU countries may have a weaker currency or could be in debt so L’Oreal would need to invest at a good time. L’Oreal may need to use marketing techniques such as using a Spanish celebrity to promote their products in order for them to appeal to the Spanish.
Globalisation is the process of the world becoming interconnected due to increased trade and cultural exchange throughout different countries. I will now explore the advantages and disadvantages of L’Oreal globalising their brand.
The advantage of globalisation is that L’Oreal would have an increase in sales and more purchases since they would be expanding to a different country. They would also become globally recognised as a brand which will also contribute to an increase in sales. However, if the state of the economy in the country they have chosen to expand to may fail which would mean that