The Body shop is among the largest firms dealing with personal care products. This firm was first established in the United Kingdom by Anita Roddick who became the chairperson in partnership with her husband, Gordon Roddick. These two individuals had a common goal of using only natural ingredients, supporting fair trade and refusing to test their products on animals. In addition, the founders were determined to ensure that they complied with the international human rights issues. This shop was established in 1976 but became public in 1985.
The body shop is inspired by the mission statement that was established by the founders. One of the issues contained in the mission statement is the pursuit of environmental and social change. In addition, the company is determined to balance the human and financial needs of all the stakeholders. Ecological sustainability is another issue that inspires the Body Shop community. The shop seeks to contribute to the international and domestic communities by promoting fairness, honesty and respect. Protection of animal and human rights is another mission for the Body Shop, as well as striving to narrow the gap between principle and practice.
One of the core values observed by the Body Shop is that testing products on animals is morally and scientifically wrong. In addition, the shop is in support of the small groups that provide ingredients and other accessories. Another common phrase present in the Shop values is treating all individuals in a unique way. The Shop also elaborates on the need to fight for those individuals whose human rights have been denied. The environment is another issue which the shop feels that it should be totally protected in both local and international levels.
The products that are present in The Body Shop are categorized according to their functions. The first category of products is in body care. Under this, there are moisturizers, lotions, sun care, creams and other care products. The other category is the bath skin care. This category has products like scrub cleaners, masks, eye care, toners and treatment eyes among others. In the make up category, there are all kinds of make up tools like palettes oils, face and lip tools among others. There are home fragrance and fragrance hair care which contains products like shampoo, body sprays, aroma jars, and dusting powder among others. Aroma therapy and men’s accessories are other categories which include products like shower bergamot, fragrance bags, and hair brushes among others.
The Body Shop had Anne and Gordon Roddick co-sharing the management roles of the company. Their tenure began from 1976 to 2002 when they stepped down. The current chairman of the Body Shop is Adrian Bellamy, who was appointed the chairman in February 2002. The CEO and director of the shop is Peter Saunders who joined the business in 2002, having served in the American business in 1998. The company now has its operations in 52 countries through affiliates and subsidiaries.
In the recent developments, the shop agreed on a deal to be taken over by LOreal, a giant French company for a $1.4 billion deal. The businesses are segmented across many continents but with the Western Europe having the largest share of the shops. Other areas include the Middle East, America, Asia-Pacific and the UK.
The Shop has had alliances with other organization with the most notable one being between Body Shop and Women’s Aid. The reason for forming the alliance was in fighting for an end to domestic violence. These alliances placed the Shop at a better position in its humanitarian and other social contributions than other retail shops.
The Body Shop has much strength that has enabled its success as one of the best shops dealing with beauty products. One of its strengths is in strong communication. One of the ways that the shop has used to increase and make communication effective is by the use of DODGI. Through the use of this method as well as the red letter, the shop has established a strong communication. Another aspect that has served as strength to the Body Shop is its commitment to the employees. The commitment to the employees increases the productivity as well as the trust of the employees. With increased trust and input, the productivity increases and this has helped to push the sales even higher. In addition to being committed towards the employees, the shop has also increased its encouragement campaigns towards its staff in social campaigns. This has ensured that the employees are well informed on matters related to social responsibilities and campaigns.
Strength in the shop’s commitment to accountability and transparency is another factor that has influenced success of the firm. These actions are all directed towards the firm’s performance and this has significantly affected the productivity and the functions of the firm. Through this commitment and good relations between the employees and the employers, there has developed a culture that drives up sales and customers. Due to its numerous contributions to social and environmental issues, the shop has influenced its rank among the top businesses, promoting its nomination to the UK marketing hall of fame.
Its global expansion has influenced its position among other investors. By increasing its sales and outlets, the company increases its financial stability as well as other potential gains in forms of shareholders and this has elevated the shop to greater heights than its competitors. The implementation of strong ethnical policies has enabled the firm to be accepted by many customers across the globe (Roy & Ghosh 2008). The Body shop has established its outlets in different parts of the world with different cultural and ethnic backgrounds. This has influenced the packaging language as well as enhancing an understanding of the different cultures in the world. the concept of having an understanding of the different cultural and ethnic backgrounds enhances the decision-making process especially while marketing and conducting sales.
The decision to engage in franchise business was inspired by the need of increased capital for expansion. Since franchising is less costly and demanding than whole scale expansion, the company decided to use this strategy in order to generate enough capital for expansion. In addition, the aspect of franchising is linked to the firm’s commitment to promote natural products. By increasing the franchise outlets, the shop offered the consumers a chance to familiarize with the natural products. The resultant effect of franchising was increased returns and popularity, which have helped in the development of the shop’s credibility across the world.
Another strategy which was adopted by the company was a change in the recognition (Grant 2005). The shop formulated ways of recognizing and understanding the product range in order to follow up on demand and supply. In addition, understating a product trend on and off the shelf has enabled the management to change marketing and production strategies in order to maintain a market advantage. The creation of new products has also enhanced sales as well as a change in packaging. These strategies coupled with redesigning of the store format have ensured that the shop is among the leading outlets of beauty products.
The aspect of being a leading player in the beauty market has influenced great returns for the shop. In addition, many people have adopted the products as their favorites, an issue that has influenced brand loyalty and increased purchases. The increased campaigns against conducting tests on animals as well as the shop’s commitment to engage in natural products have also influenced sales.
There are some weaknesses with the firm. One of the weaknesses is the high operating factor. This has resulted to bloated expenses of the firm and this has caused the firm to register reduced profits despite its great sales. The reason for the increased costs of operation is due to the many outlets being set up as well as the obligation to offer natural products which require a lot of natural resources to extract.
The major opportunity with The Body Shop is in its ability to engage in metro sexual products (Grant 2005). The metro sexual factor influences the number of purchases and sales since the target group consist of both men and women. For this reason, it is very easy to expand without any fear of gender restrictions and opportunities. In all places, there are expected to have ready customers irrespective of their gender affiliations.
The shop has several threats that require prompt address by the management in order to avoid reduction in sales and loss of popularity. One of the threats associated with the shop is strong competition from other shops engaging in similar businesses. There is also some negative publicity that is being associated with the shop’s operations. The negative publicity has affected greatly the operations of the shop especially on its increased campaigns to deal with natural products. With the increasing environmental campaigns, the shop is expected to make alteration in order to reduce over usage of natural resources.
The shop has embarked on increasing its IT roles to include real point of sale as well as invoice matching and authorization. These IT infrastructures enhance the sales as well as communication around the many corporations that have been started in many countries across the world (Mesure 2005). Some of the financial highlights are that the shop experienced positive income from the year 2004 to the year 2005. The profit margin was from 43.9% to 81.1% within a year. This increase in profit trends also affected the operating margin within the same duration.
From a margin of 7.6% in 2004, it rose to 9% in 2005. This thus illustrated a huge increase in productivity sales and overall returns by the shop. In addition, when the first five years of the last decade are evaluated, the company is seen to have increased its total assets from $338.14 to $501.53. This increase illustrates an important financial trend by the company which started as a retail outlet for beauty products to reach an extent of a leading giant in the beauty products.
The shop has been increasing substantially in revenue and more than 5% in growth by the year 2008, has been experienced (Shortell 2007). With the current business trends, founded on decisive and unique products, the shop is expected to make great returns in not only this year’s financial year, but also in the years to come. With its great campaigns against human and animal mistreatment, the consumer confidence has been won and this is increasing the number of sales and loyalty.
In conclusion, the Body Shop has struggled over many financial hurdles but succeeded due to its unique products. In addition, its great focus of metro sexual products provides for a better opportunity for growth and development by the shop. By analyzing its past financial data, The Body Shop is expected to make great earnings in years to come.
Grant, RM 2005, Contemporary strategy analysis, John Wiley & Sons, New York.
Mesure, S 2005, Business Analysis: Body Shop bucks the gloom on the high street, viewed 5 April, 2011 <http://www.independent.co.uk/news/business/analysis-and-features/business-analysis-body-shop-bucks-the-gloom-on-the-high-street-526616.html>
Roy S, & Ghosh L 2008, “Business as Unusual”: A Case Study on the Body Shop, Journal of Applied Case Research, Viewed 5 April, 2011 <http://www.swcrahome.org/Cases/Body_Shop>
Shortell, J 2007, Body Shop Business 2007 Industry Profile: An Analysis, viewed 5 April, 2011 <http://www.bodyshopsolutions.com/WordPress/?p=99>