Body Shop International Public Limited Company - Assignment Example

? Body Shop Body Shop Body Shop is the brand for Body Shop International Public Limited Company. The shop offers a wide varietyof products and it is widely distributed across the globe. It has 2,500 stores across 61 countries that shelve 1,200 products. Products Body Shop products are mostly beauty and body care products. The 1,200 products range from hair, skin, body and home care products (BodyShop, 2012, p. 1). Ingredients used when making such products come from nature. The organization tries to maintain them as natural as possible. Sesame oil and marula oil are the most common natural ingredients utilized by the company in making its products. Marula oil is obtained from kernels and some of its traditional use entailed body moistening as a lotion and massage treatment purposes. Sesame oil also acts as skin moisturizer and skin massage oil (Nitzsch & Rose, 2011, p. 23). Body shop obtains its ingredients via Community Fair Trade. The products fall under various categories depending on their use. The first category is fragrances that include varied products for men and women. Body butters include Meringa, strawberry, Shea, Satsuma, olive coconut and mango products. Skin care products contain a wide range of minerals including vitamin c, tea tree, seaweed and Aloe Vera. Under this category, Body shop has lotions approved by pediatricians for babies. Maca root and White musk are skin products for men. Make ups include eye shadow, lipstick, mineral make up and mascara. For hair care, they have banana conditioner and banana shampoo. The last category is bathing products that include soaps and gels. Antiperspirants are the latest products by Body Shop (Body Shop Business, 2011, p. 1). Market entry Initially, Body Shop was an environmental friendly single-store shop specializing in natural cosmetic products in Berkeley, California. Anita Roddick visited the shop as a customer. It inspired her to start her own shop of similar products. She opened a shop in 1976, UK and began producing the naturally scented products. In 1987, she bought naming rights for her shop consequently labeling it Body Shop (Haile, 2004, p. 24). It expanded at a steady rate of 50% quickly spreading to other countries. Initial investment and ownership Anita needed 4,000 sterling pounds to start her investment. She obtained the money from a bank as an investment loan for her first shop. Following success, she wanted to open another shop but funds remained a challenge. The bank refused to loan her the money. She obtained 4,000 sterling pounds for her second shop from a friend of one of the girls assisting at the first shop. However, the person demanded a 50% share in the shop she was to set up. Further funding for expansion was through informal arrangements with various businesspersons and businesses (Haile, 2004, p. 22). Body Shop offered its first public offing on April 1984. Anita Roddick and her husband Gordon Roddick owned the company for 30 years from the date of establishment until 2006, when L’Oreal corporate team purchased the company (Body Shop Business, 2011, p. 1). Body Shop’s Unique Selling Preposition Anita Roddick advocated for environmental friendly products to conserve the environment and maintain healthy bodies. As Gordon Brown, the English Prime Minister, acknowledge that after Anita Roddick’s death in 2007, she and her company campaigned for green issues long before it became a popular topic in the world (Assenmacher, 2012, p. 24). She is a pioneer in instilling the globe’s environmental concerns in people. This ultimately convinced people to use Body Shop products. Apart from environmental issues, Body Shop campaigned for other social issues that included enhancing self-esteem in women. In this campaign, the company contradicted the popular media concepts of women that depicted women as stereotype (Dutta, 2007). Body shop also engaged in community activities in which it funded various environmentalist and social groups. Consequently, it familiarized their products with interest topics that the company sponsored. These campaigns strategically increased the company’s uniqueness causing admiration from women across the continent. As a result, Body Shop’s products appealed to women causing them to shift from earlier used products to Body Shop’s environmental- and body friendly products. Consequently, the company expanded due to skyrocketing sales and widespread acceptance. Key strategic decisions Target market The initial target market for Body Shop was women. Cosmetic use was popular with women in the early 1970s than it was with men. Women needed cosmetics for enhancing their appearance in terms of hair, face and body beauty (Mennen, 2011, p. 73). Anita’s decision was influenced by the Body shop she visited in California prior to starting her own chain of shops. Anita is a woman and her choice of venture centered on women products. The company’s campaigns focused on improving the lives of women. The company, in its early stages, merged its economic motivations with social factors affecting its target market. The present target market for Body shop includes a majority of young teens and women in early 20’s. In addition to this group, it makes products for older women, men, elderly, children and toddlers (BodyShop, 2002, p. 1). This represents the company’s foundation flexibility and present ability to adapt to a changing world market. An entrepreneur must establish the product she wants to sell, determine the market availability and ways of strengthening the relationship. Anita successfully integrated these business principles to establish a business that would soon become an international company. Considering that cosmetic products are in high demand despite not falling under necessity commodities, Anita made a clever choice in selecting her target market. Fulfillment of needs The company focuses on beauty, environmental and social welfares. It considers several factors that should not compromise profit. For instance, women need hair care products such as conditioners and shampoos offered by the company. While the company interests itself in making profit by selling the hair products to the vast ready women market, it also takes into consideration their true needs, which is obtaining and maintaining higher self-esteem. To help them accomplish this, Body Shop employs two strategies. It embarks on utilizing natural ingredients to produce commodities that are natural in order to avoid the side effects that arise with intensive long-term use of chemicals. Secondly, it undertakes campaigns and sponsorships that directly empower women. An ethical business establishment anticipates social problems that may arise from its operations and participates in active efforts to counter the effects (Kurz, 2008, p. 4). Body Shop responds to environmental issues that would undermine the society’s well being. In doing so, they take care of the community needs before they emerge. Brand management Various decisions shape the company’s brand. From the preliminary investment, the company sought to produce and sell cosmetics. The company has been able to maintain the brands that started the company. However, others have been added. This acts to expand their market ground and target. Under brand management, a company should determine its target market for specific brand and available channels of availing the products to the consumer (Bruin & Dupuis, 2012). Then it chooses the best channel. This decision relies on the target market. Body shop has categorized its customers into three: online shoppers, retail shoppers and window shoppers (Body Shop Business, 2011). Each category is able to access the products they need because the company exploits the three sales strategies that match the above categories. The strategies include opening retail shops for their products, having an online purchase program and delivery system, and making promotional appearances during events and parties. Various distribution channels enable the products reach the customer in quantities desired. A company can avail their products to consumers through two channels. It may decide to use in-source services or out-source services. In-source services mean that the company will establish shop chain. The company has to purchase or rent stall and warehouses so that they can meet the needs of retail customers. The second channel is franchise. In franchise, the company allows a second party to do the retailing for them. The company distributes its products to the second party that utilizes the company’s name and fame in attracting consumers (Mennen, 2011). When Body Shop opened in 1976, it sold its products directly to the consumers. At its early stage, the workload and customer ground was small. Hence distributing to its stores entailed less labor and processes, in comparison to, the company’s present day status. As the company expanded and gained a wider consumer market across the globe, need to delegate, roles to first line management arose. Continued expansion made the company realize that outsourcing for retailers was vital. The company decided to contract franchisees. This move saved a considerable amount of funds for the company because it did not have to buy stores and remodel them to their liking. However, making the sales directly to the consumer increases the returns. The company receives profits that the franchisees receive in out-sourcing. Nevertheless, Body Shop had expanded. Consequently, processes involving production, distribution, marketing and retailing would overwhelm the company management. There was need to out-source. Pricing is another factor to consider in brand management (Bruin & Dupuis, 2012, p. 34). Prices vary depending on the product on sale. Different products carry different prices. Products may have dissimilar prices depending on two factors: taxation and quantity of package. Consumer group fragments into different sub-groups marked by difference in purchasing power of individual consumers (Kuratko, 2012). As such, Body Shop recognizes the difference and packs its products into packages of varying sizes. The smaller the packet is the cheaper it is. This strategy ensures that the company captures consumers at the very bottom of purchasing power pyramid. Thus, the decision to pack products into smaller packs increase the market ground for Body Shop. Luxury products are usually marketed in regions whose population is has a higher purchasing power. Taxation determines the prices as well (Kuratko, 2012, p. 33). Regions and governments have different taxation policies because a similar product may have varying prices at different locations on the globe. Highly taxed regions will sell at a higher price, in comparison to, lowly taxed regions. E-strategy The current business world is rapidly transforming its operations into internet-reliant processes. This is due to increased use of internet and computer services in all economic and social aspects (Kuratko, 2012, p. 35). Body Shop decided to employ e-strategy in managing and conducting its operations. In addition, they sell their products through the internet (BodyShop, 2012, p. 2). Use of e-services saves time for the company. The top management does not have to send and wait for reports concerning various aspects of its processes. With e-services, every user in the company accesses information they need promptly. The company saves money as well as money in form of reduced operational cost. Whether in marketing, sales or operations, e-services are cheaper than traditional practices. Funding As the company started, Anita faced capital constraints. She could not raise adequate funds to start the business by herself. A friend to her husband guided her in writing a business proposal, which won her a loan that she had previously failed to obtain of ? 4,000. For her second shop, she could not get a similar amount. However, she signed an agreement with a sponsor. The sponsor would give her money and in return, she would offer half of the shares of the specific shop to him. The agreement valued at ?2,000 later expanded to ?143,000. Anita did not regret her decision because as she said, “I would not have come this far without the funding” (Assenmacher, 2012, p. 23). Evaluation of the key decisions made by the company Decision-making is a vital part in management strategy. Poor decision-making affects business negatively. It may lead to large monetary loses or overall failure of the business. Therefore, making good decisions is important in ensuring that the business prospers (Assenmacher, 2012, p. 11). From establishment of the first Body Shop by the founder to the current time, Body Shop has made various decisions that have led to significant success. The decisions are real life examples of entrepreneurship environment. Evaluation of these decisions reveals entrepreneur’s qualities required in any business setting as well as virtues of entrepreneurship that ensure success. Vital entrepreneur qualities Passion for what they do Anita is the founder of a multi-million company that is now part of the multi-billion L’oreal corporate. As seen in her history, Anita visited a Body Shop that specialized in naturally scented- body products. This impressed her very much that she decided to start her own shop. She did this out of passion. It impressed her making her realize she could impress others as well. Entrepreneurs who venture into businesses they have passion for are destined for success (Kuratko, 2012). Anita’s success is a testimony of this fact. Taking work seriously and making careful plans In order to succeed one must be serious because obstacles mar the path to success. Motivation is vital in overcoming these obstacles but one must carefully go through their strategies and plan (Bruin & Dupuis, 2012 p. 45). Anita could not raise the adequate amount, yet she did not give up. She took what she did seriously. She eventually convinced other people, including her husband, friends and sponsors to support her. Her decision to revisit the bank after failing to acquire her first loan indicates that she was serious. Though she was not prepared with a business proposal during her first interview with the bank, she found out what she had to do. She made a better plan and went back to the bank to request a loan for the second time. She qualified and received ? 4,000. Entrepreneurs are risk takers There is no guarantee that venturing into business will reward promptly (Kuratko, 2012, p. 21). There are risks. Sometimes even the most carefully planned business plan can fail due to oversight of some facts. However, if one does not take risks and venture into new grounds, success does not follow (Kuratko, 2012, p. 53). Anita had tried businesses before. She and her husband had tried to run an 8-room bed and breakfast inn. This failed because the business was seasonal. They turned it into a full time hotel but the returns were not motivating either. It is then Anita decided to take a loan and start the first Body Shop. Despite frustration from earlier businesses, she did not fear failure. Instead, she forged forward until she turned her small cosmetic shop into a multi-million company. Wise management of money Funds are essential in buying inventory, promotion and marketing purposes, payment of services and other operational activities. Misuse of funds a leads to losses (Bruin & Dupuis, 2012). Likewise, stretching the budget in context of inadequate funds can lead to collapse of a business. Though successful with her first shop, Anita sought funds from other sources to start her second shop instead of overstretching the resources from the first shop. Customer in a business setting An entrepreneur needs to anticipate his or her customers’ needs and desires and to fulfill them in order to succeed in business (Bruin & Dupuis, 2012 p. 23). Body Shop realizes that consumers of its products want to attain a certain cosmetic value. There is a wide variety of products available in the market that customers can embrace. However, some or most of them may cause adverse side effects to the consumer. Body Shop decided to focus on giving their customers the best product. They made products from natural ingredients. In addition, the company participated in other activities that revolve around the social life of its customers. It sought to improve women’s’ self-esteem. Not only did the company offer products to enable them enhance their physical appearance but also gave additional support in shaping their social lives. In doing so, the company’s fame grew because it enjoyed a steadily growing customer base. Engaging in community work promoted the company’s business image as well. Self-marketing Anita and her management came out publicly and campaigned for their products. The company constantly engaged in activities that related to its products aim. It attended major functions and constantly reminded the public about the benefits of the company’s products. It also actively participated in creating awareness of negative consequences of not being careful with products that people use, especially when such products are not environmentally friendly. Reference List Assenmacher, K 2012, The Bodyshop - An Analysis of the Company ?s Actions towards Sustainability, New York: GRIN Verlag. Body Shop Business 2011, Body Shop Business, [online] Available at http://www.bodyshopbusiness.com Body Shop, 2006, The Body Shop Foundation, [online] Available at http://www.bodyshopfoundation.com BodyShop 2002, Body Shop. USA, [online] Available at http://www.thebodyshop-usa.com BodyShop 2012, The Body Shop - Beauty Products inspired by Nature and Ethically made [online] Available at http://www.thebodyshop.com/index.aspx Bodyshopfoundation 2001, Body Shop Foundation, [online] Available at http://thebodyshopfoundation.org Bruin, A & Dupuis, A 2012, Entrepreneurship: New Perspectives in a Global Age, New York: Ashgate Publishing, Ltd. Dutta, M 2007, Wonder Woman, [online] Available at http://d2.zedo.com Haile, T 2004, Berkeley's Body Time the Original Body Shop. Made In Berkeley , 12. Kuratko, D 2012, Entrepreneurship: Theory, Process, Practice, New York: Cengage, Learning. Kurz, D 2008, Success built on ethics - The Body Shop story [online] Available at http://www.mweb.co.za Mennen, M 2011, The Body Shop: Strategic Business Management, New York: GRIN Verlag. Nitzsch, B & Rose, K 2011, Bodyshop: The Photoshop Retouching Guide for the Face and Body. London: John Wiley & Sons. Older, J 1998, Anita!: The Woman Behind the Body Shop, New York, Charlesbridge Pub Incorporated Stephenson, J 2010, 25 Common Characteristics of Successful Entrepreneurs, [online] Available at http://www.entrepreneur.com/article/200730 Read More