Mass market leadership and shampoo wars: the L'Oréal strategy

Purpose – The purpose of this paper is to describe how one company built and sustained market leadership by implementing a market‐oriented business strategy involving defensive and offensive management. Design/methodology/approach – With an historical approach, this article examines how L'Oréal's Consumer Products Division increased its dominance in its domestic cosmetics industry. Data were extracted from the IRI Census Database (retail panel data). Some data, as they remain confidential, were not included in the paper. Findings – The transition from an offensive to a defensive management style (and vice versa) is part of the dialectic in relations between the company and its environment, including consumers (demand), competitors (their behaviour in the market) and market conditions (growth, stability, decline) in an extended sense (see Kohli and Jaworski). Research limitations/implications – The joint management of offensive and defensive market‐oriented strategies leads to enhanced competitive positioning and increased market share of a portfolio of brands and products. Practical implications – The trade‐off between offensive and defensive management, involving whether managers are influenced by or influence the structure and the behaviour of market players, depends on their mental disposition toward challenges in increasingly competitive mass markets. Originality/value – Prior discussions of offensive and defensive management approaches have remained mainly theoretical. Through the illustration of the undisputable leader of the cosmetics sector, this study offers a practical example that can help companies reconsider how they differentiate themselves from competitors with respect to market conditions. This case offers an initial investigation of offensive and defensive management.