Supporting Activities

These activities support the primary functions above in helping the firm to achieve its competitive advantage. These activities are classified as:

2.1 Infrastructure

Firm infrastructure refers to a structure from its management planning, control system accounting, financing to company culture…etc. It is believed to be essential that can help company to create more advantage. For L'Oréal's, organizational structure is important and necessary to ensure a sustainable development. However, it is quite complicated. Simplicity, L'Oréal makes a labor division into centralization and decentralization. Centralization is definitely for upper level manager of L'Oréal who often makes important decision. The workforce has been organized into head-quarters and six regional research centers.

Decentralization is defined as two levels. The first one is broad committees, the lower level region management. L'Oréal also processes departmentalization for decentralization level.

These are product departmentalization which is used for managing all brands of products of L'Oréal within the groups based on divisions, geographical departmentalization that the managers of different geographical zones in which L´Oréal is located. Research and development departmentalization is use to make customized products for all the diverse customers with diversity habit and lifestyles. Administration, Finance and Human resource

departments are divided base on division and region, but they have same function, that is to make a full connection for whole L´Oréal.

The second important for L'Oréal is Finance management. Together with the business units, the finance and management control are key important part for L'Oréal's performance, making valuable contribution to its dynamics of growth. Finance and Management control has some grass-root functions, such as the teams directly contact with the business units to provide accurate information for their need, and also help draw up appropriate predicts and recommendations. There are three kind of financial strategic management in L'Oréal. Those are corporate finance, finance management and business control, and internal audit.

In addition, L'Oréal is leader multinational cosmetic company. For them, raw material control is indispensable part, which requires to be managed well. How successful L'Oréal was as applying PRODAC system. All of data of raw material is now readily available and the entire production process is controlled through stringent quality control of raw materials.

2.2 Human resources management

People are a significant source of value. A good HR management is believed to support the attainment of strategic business plans and goals, then stimulating business development with a clear advantage in turn. With this in mind, L’Oréal HR works hard to reconcile three aspects. The first one is Global recruitment. In order to support L’Oréal’s managers worldwide, the HR team recognizes that individual talents are the root of all great ideas. The mission of them is to attract, identify, select, develop, reward and retain the finest talent.

Recruitment at L'Oréal is about the people and not a process. It is likely to be a long-term process which proactively detects individuals who are certain to enrich HR teams with their diversity, experience and perspectives. L'Oréal has widely use social networking sites to recruit in various countries worldwide. It means different country will have different platform for it. The jobs section of each website lists available positions in that country only. They also

take advantage of Facebook, LinkedIn and Twitter. The objective of those kind online platforms are to help each student or candidate to gain the deeper perspectives and the best define for career plan, those also help L’Oréal recruiters to detect high potential or talent as well. Besides that, L’Oréal has conducted many kinds of programs to achieve the talented candidates. The most two famous games which help L’Oréal identify experts, profession or potential candidate are Reveal and Brainstorm. Take L’Oréal brainstorm for instance, a groundbreaking business game, visits over 280 schools and universities over 40 countries worldwide. Thanks to the competition of this program, over 7000 international participants were attracted, and over 170 employees were employed every year.

A company definitely cannot be successful without creating favorable conditions for the development of talent. That is the reason why diversity management is important for L’Oréal.

Their ambition is to set up the standards for gender equality, non-discrimination, the inclusion of the disabled as well as providing opportunities to people of all ethnic and origins within the 140 countries where we operate. Furthermore, L’Oréal has implemented many specific diversity training programs for all level of employees.

The final one is fostering innovation of employees. Global dynamic competitive and diversity is not enough to stimulate innovation for each employee. Understand this issue L’Oréal is continuous improvement by creating many programs like global mentoring program, Employee resource groups, Multicultural talent management, Strategic partnership development, e-Learning modules. By running these programs, the connection of innovation could be maintained and nurtured effectively.

2.3 Technology development

This includes the use and development of technology to enhance the effectiveness of primary activities in terms of value creation such as R&D, product design, cutting edge application and process automation. For L’Oréal, beauty is all about a scientific adventure,

scientific knowledge of the skin, hair, active ingredients, formulation procedures, evaluation technologies where L’Oréal R&D constantly innovate new and unique products that meet customers need that adapt to local conditions around the world. L’Oréal invest a lot in technologies include the digital one which help them generate even greater innovation to satisfied customers. To make further progress, L'Oréal's researchers mostly rely on its advanced technology ─ medical imagery, robotics, 3D modeling that considerably enrich their approach to development of innovative products that enhance the consumer’s experience.

With its focus on technology development, L’Oréal is believed to accelerate its innovations and maintain its competitive edge.

2.4 Procurement

Procurement means purchasing the raw materials for the final products and other inputs used in the value creating activities. Variety of raw materials are used to produce cosmetics formulas where L'Oréal purchase those from specialized suppliers who are involved in a constant process of quality and safety research. L'Oréal works with several hundreds of suppliers worldwide whom are regularly evaluated on the basis of their key performances such as: social and environmental responsibility, innovation, quality, logistics and competitiveness to establish long term, transparent relationships with high quality, committed suppliers, thus engaging in a process of continuous improvement. L’Oréal has developed a sustainable sourcing policy for renewable raw materials and guaranteeing the high quality of supplies.