A Report on the Body Shop

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Summary of The Body Shop

The Body Shop was found by Anita Roddick in the year of 1976 which she opened the first store in United Kingdom using only £8000. In 1984, The Body Shop is floated on the London Stock Exchange. In 2006, The Body Shop won the PETA’s Proggy (progess) awards for its consistent commitment against animal testing. In the same year, L’Oreal acquire The Body Shop for £652m, thus The Body Shop was removed from the London Stock Exchange. Despite the acquisition, The Body Shop continues to be based in the UK. However in 2013, a CHOICE investigation triggered The Body Shop Australia CEO Mark Kindness to reinforce the company will not take exporting their products into China into consideration until China’s laws changes.

-Trouble faced-

-how they got through it-

conclusion

External Environment

External Environment meant that situations, objects, actions, and causes around an organisation that may affect its daily operations and varieties, and determine its prospects and probabilities. As for this report, it has been spilt into six external environment which are sociocultural component, technology component, demographic component, economic component, political component and lastly, global component. On top of that, the external environment of an organisation is also called operating environment.

(Reference from:http://www.businessdictionary.com/definition/external-environment.html#ixzz3E4QnZsTq)

SOCIOCULTURAL

In every organisation, there will be something called values that the organisation will follow. As for The Body Shop, there are five core values that keeps the organisation in track. The Body Shop is against animal testing and also protects the planet. This value is very significant to Anita Roddick as her vision was to sell quality skin-care products that were made from natural components and packaged in environmentally friendly containers. It was also promoted worldwide to end the unnecessary sufferings of animals and also the dedication to find and obtain organic resources and components, setting ecological goals. The Body Shop is also one of the first to stand against animal testing.

The Body Shop also supports community fair trade and defends human rights. Strives to treat everyone in a fair and open manner, to venerate and treasure their veracity. The Body Shop continues to fight for social justice and human rights, and have never been scared to fight for the weak and the underprivileged. The Body Shop also takes pride in the Community Trade programme, as the organisation makes a difference to the lives of the farmers, producers and their peoples.

Lastly, The Body Shop activates self-esteem by trying to bring out the natural beauty of a person. To The Body Shop, beauty is a belief, a natural way of being, where character, self-esteem and humour are freely expressed and celebrated. That’s the soul of beauty. It’s not just about looking beautiful. It’s about exuding a vibrant attitude to life.

(Reference from http://www.thebodyshop.com.sg/en/our_values.aspx)

TECHNOLOGY

In 21st century, technology is advanced and many platforms of improving the business is through technology. Many consumers now does online shopping instead of in-shop shopping due to time constrain as they can save more time during their transaction. With lesser than spent on each transaction, consumers are able to make more transactions. Ecommerce is also much more helpful as consumers can easily access to the catalogues without any difficulty, analyse prices between products, purchasing from other foreign countries, and above that, consumers can make transactions at home or at work. With online shopping, the consumers will not need to bother with the opening hours, pushy sales staff, or any other factors that may hinder the shopping trip.

(Source from http://webdesign.vinsign.com/what-is-ecommerce-importance.html)

The Body Shop isvery behind in terms of technology as their system were not automated but manual instead. However, their products can be found onvarious online shopping platforms such asRakutenand Qoo10 (previously known asGmarket) as there may be a middleperson that brought The Body Shop products into Ecommerce.The Body Shop advertises via social network such as Facebook and Twitter, to more traditional way of advertising such as posters or in-shop promotions.

As shown below, The Body Shop does not provide online shopping.

(Source from http://www.thebodyshop.com.sg/en/faq.aspx)

In Diagram 2.1 below, is the proportion of online shoppers by age group in 2012.

Diagram 2.1

(Source from http://www.johnnykoh.sg/2013/01/online-shopping-is-a-growing-trend-in-singapore)

In 2012, ages 15 to 34 years are the ones that does more online shopping as compared to the rest. Students or young adults that are studying thinks that it is more convenient to do online shopping as they can afford to wait for the products to reach the destination. The highest percentage are those in the age group 25 to 34 years old, which is mainly the working adults. Online shopping is convenient to them as they can beat the queue and with a credit card, transactions are made simpler.

Diagram 2.2

(Source from http://az598155.vo.msecnd.net/wp-uploads/2014/07/1.png)

In diagram 2.2, it was predicted that retail e-commerce in Singapore will have a climatic climb to $4.4 billion in 2015 despite global economic crisis.

Lastly, online shopping will become a necessity in our lives as they become more practical with each passing year.

DEMOGRAPHIC

The Body Shop definitely has many regular consumers or even new consumers. However with different geographic locations, there were bound to be many consumers from different ages,income,raceand marital status usingWismaAtria(Singapore)asthegeographic location.

Diagram 3.1

As shown in Diagram 3.1, many consumers come from the age group of 40-44 years and 65 years and above, whichcould meant that The Body Shopismore popular for the stated age groups.

Diagram 3.2

As shown in Diagram 3.2, there is a whoopingpercentage of 41.7% of consumers whose monthly income are above 6000 SGD.

Diagram 3.3

Diagram 3.4

For both Diagram 3.3 and 3.4, it's shown that races also affects the culture as a wide percentage of both Chinese males and females were seen to be the biggest consumers in the geographic location specified.

Diagram 3.5

Diagram 3.6

Despite being married, bothmales and females has the highest percentage as compared to widowed, divorced and single males and females. However, there's a lesser percentage of widowed males and divorced males as compared to widowed females and divorced females.

(Sources fromhttp://sg.shownearby.com/place/The-Body-Shop-Wisma-Atria/533908/demographics/marital-status)

ECONOMIC

The Body Shop's stock started on London's Unlisted Securities Market in 1984, with a stock price of 95 pounds. After given a full listing, the stock increased by more than 500%, thus was given the nickname "Shares that defy gravity".

An international controversy happened that whirred up stories in the international media that led to a temporary drop in the market value of 50% of the stock of The Body Shop.

Profit was lowalsodue to the consistent sales that kept ongoing all over the 61 countries. With thatconsistentongoing sales, their products became even cheaper yet they would still need to pay their staff as well as payment for bringing in more products or even to do research for new products.Thus, bringing the profit expectedly low.As profit hits expectedly low, there will be a higher risk thatlabourturnover will occur especially negatively.

Other than the low profit, there was a financial crisis in 2007-2008, which also named as Global Financial Crisis, stock markets dropped worldwide, bringing problems such as prolonged unemployment.

(Reference from http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308#Global_effects)

In 10 October 2008, Singapore’s economy shrank by 6.3% in the third quarter after an updated 5.7% recession in the second quarter, the first recession since 2002. Growth has wavered in Singapore as a result of lesser needs for exports, greatly affecting the income of businesses in Singapore.

(Reference from http://en.wikipedia.org/wiki/Timeline_of_the_Great_Recession)

As stated in Diagram 4.1 below, the diagram shows how much in general beauty products sales grow over the years.

Diagram 4.1

http://www.klinegroup.com/reports/emailings/newsletters/chemicals/december2009/chart.jpg

It is clear that skin care products has the biggest growth over the years as compared to the other products as people are becoming more beauty conscience especially the females.

Diagram 4.2

However according to diagram 4.2, in 2011, there was a growth of 4.4% of the worldwide cosmetics market. Although the highest percentage was before the 2008 recession, it is considered as positive after the lowest growth rate of 1% in 2009 as they managed to recover the growth rate quickly.

POLITICAL

The Body Shop was stuck in a controversy with China after being told all foreign-manufacturedcosmetics are required to undergo animal testing before it could be made available to the consumersin order to sell their products in China. Some Chinese insiders provided information that cosmetics sold in duty-free stores were not required to undergo a compulsory test before it's released in the market. However, after the products are released in the market, the Chinese government carried out testingwithout any given warnings. Definitely, according to the Chinese insiders, they were unable to guarantee that animal testing will not occur when the test is being conducted.After being informed about the possible animal testing that may be done by the Chinese authorities secretly, The Body Shop announced that they would withdraw their products from the China market if any risks of animal testing were to be done.(elaborate more)

(Reference: 11th March 2014, byZoyaSheftalovich.http://www.choice.com.au/reviews-and-tests/food-and-health/beauty-and-personal-care/cosmetics/the-body-shop-sells-out-on-animal-testing.aspx#ixzz3Dfu93XsR)

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