The Body Shop International Case Study Business Essay
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Published: Mon, 5 Dec 2016
The Body Shop International (Body Shop) is a multinational company which is mainly producing ecological skin and hair products.The company offers over 1200 naturally produced healthy and beauty products generally target at woman. The products focus is shampoos, conditioners, bath products, soaps and skin creams but also includes fragrance, spa products, and beauty-related accessories. Their products are solely based on natural ingredients and manufactured according to an ethical code which is opposed to animal testing. The cosmetics franchise is considered to be one of the biggest around the globe with a well established reputation in 54 countries. L’Oreal, the dominant company in the beauty industry, acquired Body shop in 2006. Although Body Shop has become a subsidiary of L’Oreal S.A it still acts according to its own policy, values and ethical code. The acquisition has solved Body Shop’s financial problems and has provided the means for expansion to a bigger market share.(1***************)
The updations since the case study was written can be summarised as: In 2002 Anita Ruddick launched her own website “www.AnitaRoddick.com” in 2001 and an activism portal “www.TakeItPersonally.org” in 2004. At that time number of shops were were1500 Body shop but nowit exceeded over 2500. During 2003 The Body Shop launched a global campaign to raise awareness and funds to help those affected by domestic violence. The Stop Violence in the Home campaign builds on almost a decade of campaigning on the issue in a number of markets, including Canada, the USA, and West Malaysia. The campaign aims to highlight the issue, raise money to support the work of groups. . In 2007 The Body Shop join forces with MTV in a new brand partnership to raise funds and awareness about HIV and AIDS amongst young people, through the Spray to Change campaign. The money raised goes to the Staying Alive Foundation, a charity who fund with grass roots organizations raising awareness and educating young and at-risk groups about HIV and AIDS .(1***************)(2) .
A brief review and discussion on company’s key acheivements and significant changes over the last few years and how the company has adopted to emerging themes like corporate social responsibility ,ethical marketing, globalisation,etc.
Significant Changes: The first The Body Shop store was opened by Anita Rodrick on 26th March 1976 in Brighton, on the south coast of England. It was declared a public company in 1985 and soon after that it created an Environmental Projects Department of its own. The first Community Trade product of The Body Shop was a Footsie Roller which was produced in 1986 by a supplier in southern India. In 2006, as part of the ongoing Stop Violence in the Home and for conducting the study on domestic violence against children, The Body Shop created a partnership with UNICEF and the United Nations Secretary-General’s Study on Violence against Children. The Body Shop becomes part of the L’Oréal Group and de-listed from the London Stock Exchange on July 12 2006. It operates independently within the L’Oréal Group and was led by the current management team of The Body Shop.
The body shop was the first international cosmetics company to sign up to the Humane Cosmetics Standard, supported by leading international animal protection groups.
The Body Shop Values Reports are recognized (1995 & 1997) as trailblazing by United Nations Environmental Program and Sustainability, and ranked highest in their review of International Corporate Environmental Reports.
The Body Shop is the first global retailer to join the Board of the Roundtable for Sustainable Palm Oil, working with NGOs and plantations to protect tropical rainforests and improve the human rights of workers and indigenous people.
The Body Shop is the winner of PETA’s Proggy (progress) awards for its ongoing commitment to avoid animal testing.
During 2005 The Body Shop was awarded for achieving higher standards of animal welfare in the cosmetic category at the first annual awards of the Royal Society of Prevention of Cruelty to Animals in the UK(3***************)
Corporate & Social responsibility
Corporate social responsibility (CSR) or corporate citizenship entails companies behaving in a socially responsible manner, and dealing with other business parties who do the same.It imlpies:
An obligation, beyond that required by the law and economics, for a firm to pursue long term goals that are good for society
The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large
About how a company manages its business process to produce an overall positive impact on society.
The Body Shop is a manufacturer and retailer of naturally inspired, ethically produced beauty and cosmetics products. According to The Body Shop Corporate Social Responsibility website, “If business comes with no moral sympathy or honorable code of behaviors, then God help us all.” is The Body Shop’s mantra.
Let’s discuss few examples to see how does it is applied at Body Shop.
a)Sustainable Supply Chain Strategy
The Body Shop works with its suppliers to promote socially responsible practices in its supply chain as part of its supply chain strategy. This is part of its wider Framework for Corporate Social Responsibility .
The Body Shop launched Community Trade. It is a targeted supply chain strategy to purchase natural ingredients and accessories from socially or economically marginalized communities around the world. It gives these producers access to a market that would otherwise be out of reach and provides a fair and reliable income, as well as a commitment to creating a sustainable business.
For example, The Body Shop’s moisturizing socks produced by a Community Trade Supplier, Craft Aid in Mauritius, provides employment to 160 people, 40% of which have disabilities.
b)Engaging the Community through Community-based Projects
One approach to engaging in corporate social responsibility is through community-based development projects.
The Body Shop’s launch of the 2008 Stop Violence in the Home campaign on the theme of friendship. By providing practical tools to empower women to provide support to friends in need, the campaign aimed to be a source of inspiration and support for millions of women around the world.
. The Stop Violence in the Home campaign also raised £1.9 million by 2008 and reached 56 markets. In each market, all the funds raised were donated to the chosen non-profit charity organization, to help fund vital projects of prevention, support, and protection for women and children.
Body Shop and Compaigns
The campaign for UK-wide ban on animal testing of cosmetic products and ingredients started in November 1998, and the largest ever petition (four million signatures) being delivered to the European Commission in 1996.
Homeless people: The Big issue paper for homeless people began as a The Body Shop Foundation project launching in 1991.
Awareness of HIV and AIDS amongst young people: In 2007 The Body Shop joined hands with MTV to raise funds and awareness about HIV and AIDS amongst young people.
As a cosmetic retailer, The Body Shop defied most accepted marketing practices. In an industry where 30 cents on every dollar of sales was typically devoted to advertising, the company had no marketing or advertising department. They operate according to criteria, which places more emphasis on human values than on strictly commercial considerations. Anita Roddick spends most of her time doing the marketing activities such as campaigns and conferences.
The Body Shop never advertised in newspapers or magazines because this type of promotion would increase the cost of the product. For The Body Shop, the most effective and useful way of advertising is to use its shops and its staff, as well as using issues awareness, such as “Activate Self-Esteem”.
The Body Shop launched a campaign using the “Ruby Doll” – a realistic looking doll to promote real women. They used it in their stores, hosted debates, funded research, and held conferences all related to self-esteem, all activities that point back to The Body Shop.
Anita Roddick said about advertisement
“There’s no example of anyone doing what we’re doing in America and making it workâ€¦”
Globalization represents the increasing integration of economics, communications and culture across national boundaries. In today’s society, corporations and enterprises are expanding their businesses in the global markets. Globalization is necessary for success and survival in the worldwide market; however, global competition is not easy .
For BodyShop the opportunities are in wide array not only on the part of venturing into regions with much income and profit to gain but also an opportunity to share and provide quality products to fashion-conscious people with vogue to fashion lifestyle.Its successful and widely-known corporate culture,its organisational structure,its managements styles and its well-controled and regulated franchise system effectively support the global expansion of Body Shop,under the cosmetic giant L’Oreal along with its strong brand name,into more isolated , under-deveolped and less developing counbtries in Africa and Asia.
A critical evaluation of limitation and benefits of growing concept and popularity of ‘free market’ to body shop.
A free market is market without economic intervention and interference and regulation by government except to enforce ownership (“property rights”) and contracts. It is the opposite of a ,controlled market where the government regulates how the means of production, goods, and services are used, priced, or distributed. all markets within it are unregulated by any parties other than those players in the market.
A market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sells are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.
Free markets contrast sharply with regulated markets, in which governments directly or indirectly regulate prices or supplies, which according to free-market theory causes markets to be less efficient.
Advantageous of free market economy
1. market economies can adjust to change easily( If there is a demand for one thing, companies have the ability to change what they produce instead of having to go through too much government protocol first)
2. Rational self interest in market economies are also encouraged (allow freedom for people to do what they want, make what they want, and, sell what they want -to a certain extent-, this can also be described as being able to decide what is going to be produced , how it is going to be produced and for whom it is going to be produced). the government tries to stay out of the way of businesses- Although the government sets certain standards businesses must follow- for the most part businesses can do as they please.
3. there is a great variety of goods and services for consumers ( If there is a demand for a good or service, the demand will almost always be met in a market economy).
4. market economy encourage competitive environment, ( competition does encourage innovation, and the free market economy has produced well over a century of dizzying technical progress. At the same time productivity has also increased at a phenomenal rate. competition is one of the basic reasons why there are generally so many different varieties of goods for consumers to choose from .
Also Free economy promotes economic innovation in several ways:
By spurring product competition among companies in the same line of business
By exposing domestic firms to the best new ideas around the world
Enabling local firms to import high-technology capital equipment and know-how, so that they can manufacture products and deliver services at lower costs
Market economy has come to be accepted as a norm across the world with many developing countries like Africa, India and China moving towards a full-market oriented economy and we have seen the Body Shop ,based on strong ethical and corporate culture,widely benefits from the
availablity of free market without compromising its ethical standards and organisational
.Limitations of Free Market
As the government meddles and attempts to control the economy, it causes economic strife.
A countries interests aren’t taken care of, in a free market you vote with your dollars. If there is a russian speaking client base, you learn to speak russian.
Doesn’t work well for services such as health care.
: No goverment involved means some products could be harmful to people
It is not as disciplined and secured as regular market.
Sometimes this works, but as 2008 is showing, sometimes it doesn’t. Especially in a market-based economy, where people want to make a profit, some unscrupulous folks may enhance their own profit margin at the expense of others, such as the consumer. The tendency toward profit may weaken the self-policing aspects, and the consumer may not receive the best deal.
Strategy for Body Shop
Although Free market economies have been successful in developed economies, will not be so in developing countries and the only recourse for them is the model of the mixed economy or social market economy. The welfare role of the state is retained in a social market economy which cares for the poor. In cases where the poor countries are striving towards a free market economy, there should be certain segments controlled by the state but with prevalence of free enterprise such that efficiency is restored and the country moves towards economic prosperity. Free market economy under centralized political control is the most effective way for these countries.
In a mixed type economy, both the private ownership as well as the state takes part in the means of production, distribution and other types of economic activities.both free-market and regulatory forces are at work. Some see these forces as being at odds with each other; others feel that the economy works at its peak when both forces are working together. Whatever you believe, many countries, including the United States, have both systems at work simultaneously, and the balance between the two dictates how the economy, overall, will trend. In reality, all economies are mixed, though there are wide variations in the amount of mix and the balance between public and private sectors. For example, in Cuba the government allocates the vast majority of resources, while in Europe most economies have an even mix between markets and planning.
Economic systems can be evaluated in terms of how efficient they are in achieving economic objectives.
Free market available on
(accessed on 12june 2010)
As it has very strong corporate culture ,supply chain management ,community involvements across globe ,effective compaign against poverty and ethical issues,it has the potential to accommodate itself to needs of varing economies,whether free or regulated,or mixed economy, and sucessfully stay competitive.
Examination and Evaluation of organizational design and structure of Body shop and key management practices:
In 2006,The Body Shop becomes part of the L’Oréal Group . It retains its unique identity and Values and continues to be based in the United Kingdom. It operates independently within the L’Oréal Group and is led by the current management team of The Body Shop reporting directly to the CEO of L’Oréal, Jean-Paul Agon.
The organizational structureof Body Shop has five basic elements as per Henry Mintzberg’s definition of organisation.
The Operating Core: Employees who perform the basic work related to the production of products and services. In The Body Shop the operating core is product design and graphic design and production department.
The Strategic Core: Top level Management who are charged with the overall responsibility for the organization. In the case of The Body Shop its CEO and Top Line managers are its strategic core making policies and regulation for the management, execution and control. direction of the organization keeping in mind the factors of organization’s reputation, existence, expansion and growth.
The Middle Line: Managers, who contact the operating core to the strategic apex.
The Techno structure: Analyst who have the responsibility for affecting the certain forms of standardization in the organization e.g. In the case of Body Shop the techno team consists of its IT department, accountant, work scheduler, long range planner.
The Support Staff: People who fill the staff unit, who provide indirect support services for the organization. In the Body shop the following departments are basically main supporting department e.g. Public relation; marketing department including in store staff, warehouse department and distribution department, payroll department(6)(1***************)
Organizational Design of the Body Shop: As per the website of organization, the basic design of the Body shop includes the following  :
The Body Shop
Behind the scene
Marketing Department including selling staff
Product / Graphic design department
“Business organization are not just for the profit -their resources can be used to promote wider purposes .the inspiration and the set of values associated guide the trading principles of body shop management, which are :
They aim to ensure that human and civil rights, as set out in the universal declaration of human rights, are respected throughout their business activities.
They will support ling term, sustainable relationship with communities in need.
They will use environmentally sustainable resources wherever technically and economically viable
They will promote animal protection throughout their business activities and in many ways
The overall corporate culture and marketing stategies of Body Shop support these ethical values.
Body Shop organizational structure and global expansion
The Body Shop operates within a regional divisional structure. Centralized head offices in the United Kingdom (London and Littlehampton) maintain global corporate and support functions. The company is then divided into four regions: UK and the Republic of Ireland (ROI), the Americas, Europe, the Middle East, and South Africa, and Asia Pacific. Within each region are both company-owned stores and franchises as outlined.
The divisional nature of the structure allows regional managers to “focus efforts on improving operations in the (regions) for which they are responsible and the corporate officers can devote their time to overall strategic issues for the entire corporation” (Dess G., 2006, p. 297).
. This structure helps to accommodate rapid expansion . Within the divisional structure and critical to TBS’s international expansion strategy is master franchising, “whereby the franchisor (TBS) grants the master franchisee (the regional division) the right to franchise the franchisor’s concept to others within an exclusive territory, creating a tripartite agreement.” (Doherty, 1999)
“By appointing a head franchisee in each major national market,Roddick was able to concentrate on the development of new productlines and the company’s global vision, rather than worry about the complexities of administration or personnel management” (HBR p. 4).
Under this structure, there is a free-flow of information between headquarters and regions, however the regional divisions become responsible for providing information and monitoring the sub-franchisees. It also allows Body Shop head office to focus on corporate strategic issues.
Its stakeholder culture is its core competence. This culture includes everything from commitment to the community, to the environment and to the protection of animals. The use of stakeholder consultation in combination with public reporting is a great way to assure that that organization is maintaining their commitment of delivering value to the stakeholders.
Discuss entrepreneurship and leadership style of founder,Anita Roderick. 500 Words
Anita roddick- entrepreneur
An entrepreneur is one who organizes, manages, and assumes the risks of a business or enterprise. Entrepreneurs live in the future. They have creative personalities, are innovative, and thrive on change. Anita Roddick is certainly a great entrepreneur. Everything that embodies her exploits involves education and change.()—-definition.
Entrepreneurs have a vision of something new and they want to see how far it can go. Entrepreneurs find the best way of pushing ideas along. Entrepreneurs use money to oil the wheels of success. Entrepreneurship has three parts, the person, the idea and the resources
For example her “trade not aid” has invaluable consequences for nations and people around the world. But that is what entrepreneurs do! Entrepreneurs make change.
Lets discuss few qualities of Anita as an entrepreneur.
She prefered environments where they have maximum authority and responsibility and do not work well in traditionally structured organizations. Like Entrepreneurs she had a need to create and achieve by having control over events.it is important as it helps demonstrate the self-determination of an organisation, which helps determine a higher rate of entrepreneur activity.
Entrepreneurs are determined to engage in risky actions in order to come up with new prospects.Likewise she has the courage and the persistence to engage in her venture, even without the assurance of succeeding.. It may look like she is taking high risks, but in actuality she had assessed the risks thoroughly.
Entrepreneur’s value system
The third personal factor is the entrepreneur’s value system, which entails examination, understanding of one’s place in the society, and the individual’s idea about persons and things . They have a never-ending sense of urgency to do something. This corresponds with a high energy level.This includes the perception and the achievement motivations of the entrepreneur, for their values determine their attitude towards their dedication with their work.
Entrepreneur’s problem solving style
Innovation and problem solving capabilities are expected to be the core of the entrepreneurial capability of an entrepreneur, for they are faced with a number of challenges as they try to implement new ideas and solve problems, so their innovativeness counts. This helps entrepreneurs identify relationships in complex situations. Chaos does not bother them because they can conceptualize order. Problems are quickly identified and solutions offered.
”Most businesses focus all the time on profits, profits, profitsâ€¦I have to say I think that is deeply boring.I want to create an electricity and passion that bonds people to the company”.(Anita Roddick)
she always strived hard to provide and maintain healthy cultures, where employees felt the belief that they are part of an exciting future.They come to work with a fire inside them, a result of clearly stated leadership and business practices that everyone explicitly understands.Every person in the company knows how to individually contribute to its future.As an great entrpreneur Anita Selected Staff that Support the Vision of the Corporation.
Corporate Governance-Anita’s Decision -making
As part of the efficient qualities of Roddick entrepreneurship, the Body Shop is actually considering the concept of effective corporate governance as their competitive advantage.Anita Roddick, as head of the decision-making body of the company, created a good system not only in selling their products but also in maintaining expressive relationship to their overall stakeholders. The Board of Body Shop has been able to attain complete control of all matters regarding the company. Their self-perseverance and obligation to their duties and finally, their obedience to the company laws all contribute to the development of the corporation. The Board’s authority is clearly recognised within the company. And because of this, it is able to have a solid grip on the corporation’s actual operations, stakeholders and its financial concerns.
Clearly, these facts prove the strength of the company’s corporate governance structure which is actually reflection of entrepreneur skills of Anita Roddick.
External factors culture, role models, work experience, education, and environment also contribute to make great entrepreneur.
.Anita Roddick’s educational and professional career is fine instance in this regard.
These factors determine the success in business ventures by its interaction and interrelation, which brings good effects to the company . Continous Strategic growth and strong brand name of body shop is clear example of Anita ‘s skills as an entrepreneur.(10)
Dame Anita Roddick deserves the praises for her exemplary performance as an entrepreneur. She has become successful because of the clear goals that she wants her Body Shop to have and attain. In her case, risk undertaking, creativity and being innovative, and beliefs, are the factors that made her a successful entrepreneur. The first step is not to succeed in the marketplace, but to enter the marketplace with a strong identity. The Body Shop is just somebody’s body shop. Now, it is everybody else’s “body shop.”
” From product development to human resource management, The Body Shop has been described as “innovative,” “daring,” and even “radical”. But there is no question it was successful.”
(HBR p. 4)
A discussion on Body shop’s position in contemporary era-(discuss in relation to globalisation,emerging management theories,significant internal changes and emerging roles of free market. 800 words.
Body Shop has various competitors in cosmetic industry such as Proctor and Gamble, Unilever, Shiseido, L’Oreal, Avon , Revlon Boots ,Nectar ,Bath & Body Works, Origins, and Aveda etc.
Let’s use follwing competitive business model to analyse Body Shop’s competitive environment as general view.
Please see Appendex for Porter’s Five Forces Industry Competitive Analysis
The SWOT analysis helps to identify major factors in the internal and external environment of a company. A SWOT analysis of Body Shop identifies areas on which the company needs to focus on in order to improve company performance, so that we analysis and see the various stages of the SWOT analysis.
Brand Loyalty – Body Shop is greatly dependent on its brand reputation which is a critical factor in sales. Due to its unique products, it has come out to be seen as one of the most environmentally friendly retailers.
L’Oreal’s support – L’Oreal’s experience in advertisement,global brand development,investment capital and marketing can boost overall sales.
Community Trade -TBS sources low-cost raw material from disadvantaged communities worldwide. As commitment to this program increase, the company will be able to capitalize on these cost savings and value creating activities.
Global Position -TBS is located in 55 countries worldwide, reducing its exposure to market risks in one region. Due to this company in a good position and take advantages of growth opportunities in and around these region while increased global awareness of the company.
Niche marketing – Body Shop targets a niche market. By stating that it is not testing its products on animals and by appearing to have an ecological profile, it has appealed to customers with ethical issues. Being the only shop in the shopping centre that sells ecological products, has given it advantage in the local market.
Charity support – Body Shop provides financial aid in charities by giving small amount of money.
Management-it has very focused management and staff due to effective corporate culture.
Operation Cost- A decline in profitability was experienced in 2006, due to inefficient inventory supply management and increasing operating costs as a result of reorganization and franchise. Given the growth of the organization and its recent restructuring, it is critical for The Body Shop to focus on improving operational efficiency. Reducing inventory holdings and improving efficiencies within the supply chain are a great place to start in the context.
Untrust on L’Oreal- Body Shop ,unlike L’Oreal, has very strict policy on no animal testing for cosmetic products whci create potential environment of mistrust about new policy of L’Oreal after its acquiring of Body Shop. This indicated a loss of market share within this strategic regions. this decline is likely to be the backlash of TBS’loyal consumers to the change in ownership. That is the weakness in future.Body Shop has to make sure it values and environmental policies should be observed along with L’Oreal.
Expanding market – Emerging market in developing countries with the increase in consumers spending in developing countries, large markets with high population are emerging in the Russian and Jordanian markets and can now focus on other growing markets in countries such as Pakistan, China and India. The growth potential of these markets is what is driving the growth of entire industry.
Male Segmentation- with the growing number of men interested in health and beauty productsthere is expanding tendency for Male grooming products . For example In 2006 the total market for male grooming products reached to $3 billion .This segment has a great potential if the trends continue. They increase products access to customers, increasing awareness, sales.and profits.
Internet Channel- As consu
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