L’Oréal once again added to its portfolio last week with the acquisition of Carol’s Daughter, a multicultural beauty brand that produces a line of natural hair care products for women of color. The purchase is the latest feather in the cosmetics company’s cap after the acquisitions of NYX, Decleon, Carita, and Magic Holdings International Ltd. earlier this year.

While the NYX acquisition was an attempt to widen L’Oréal’s mass-market appeal in the U.S., the acquisition of Carol’s Daughter is a next step for the beauty giant in a multicultural market that, according to a Bloomberg analyst, is “underserviced.”  According to a press release from L’Oréal, “this acquisition will enable [them] to build a new dedicated multi-cultural beauty division as part of [their] Consumer Products business.”

As the largest cosmetics company in the world, L’Oréal serves a wide audience that represents many cultures and styles. The U.S. multicultural market is only getting bigger — set to surpass the Caucasian marketplace around 2040, in fact — and their demand for great products is stronger by the day. This new division is a necessary forward-thinking transformation for L’Oréal to keep in the lead as the competition for the dollars of the diverse consumer heats up.

The acquisition of Carol’s Daughter has the added bonus of contributing to L’Oréal’s overall U.S. growth, something that the company has struggled with in a slow consumer products market despite optimistic estimates for 2014.

This kind of strategic transformation is one of the facets we champion for true Enterprise Wide Transformation, which aligns the commitments of the business with the requirements of the marketplace in order for a company to lead the pack in a competitive landscape.

And while some companies may succeed with a different approach, as with competitor Mary Kay, where 50 years of understated transformations have produced ravishing results, L’Oréal knows it cannot be complacent while other companies snap up niche brands and develop new ideas to widen their product offerings and appeal to a wider and more diverse audience. Acquiring a popular multicultural brand with a strong degree of customer loyalty is the kind of strategic move that is the necessary first step in transforming L’Oréal into a company that is poised to take the new market by storm.

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