The Body Shop International PLC - Essay Example

The Body Shop Introduction The Body Shop International PLC is one of the leading cosmetic product manufacturers in the world. Originated in England,it is currently operating in more than 61 countries with around 2400 outlets and 1200 different types of products. (The Body Shop International PLC Strategic Analysis Review, 2009) The body shop company is mainly concentrating in manufacturing the skin and hair care products with natural ingredients. It engaged in direct selling of the products through it outlets and also online selling. The company claims that its products are selling in every 4 seconds in the world because of the innovative marketing strategies and the popularity of the product. The body shop international is also popular in the world because of their social commitments. They have established higher standards in protecting the environment and also recycling the waste materials after manufacturing the products. In fact its method of setting high standards of ethics in businesses is widely debated all over the world. But the globalization and liberalization policies have started to affect the sales of ‘The Body Shop’ products as more competitors with different attractive products with cheaper prices entered in the market. The performance of the company shows mixed and these fluctuating results forced the founder chairman Anita and her husband Gordon Roddick, to step down from the responsibilities of the body shop in 2002. Business start up of the body shop The very first ‘The Body Shop’ store opens on 26th March 1976 in Brighton, on the south coast of England by its founder, Anita Roddick. “Roddick entered the industry in 1976 when she used £4,000 to open a small stand-alone shop of natural-ingredient cosmetics and personal care products” (The Body Shop International plc, 2003) She has started her business with a simple intention of supporting her husband and two daughters in financial matters. She has only one intention to economize the business in all possible ways which encouraged her to use cheaper materials and also to recycle materials for reuse. Watching the success of her business her husband also joined her in developing the business after one year from the starting of the business. He has joined the business as the chair person of the company along with his wife as the managing director of the company. They have started to expand their business internationally immediately after experiencing the success and identifying the potential of this business in international market. By 1982, new shops were opened at a rate of at least two per month all over the world. The demand for franchising the body shop outlets poured into the head office. “By 1990, just one year after launching in the USA, there are 2,500 applications for a franchise” (The body shop- Our history, 2008) The Body Shop SWOT Analysis Strengths Lack of Marketing is one the main strength of the body shop. The Body Shop has no belief in traditional marketing strategies. Instead, their focus rests on a viral marketing strategy where consumers/customers take the burden of advertising upon The Body Shop and tell their friends (Body Shop International - SWOT Analysis, 2007). Marketing expenses are considerably less for the body shop products. The body shop products does not need the conventional methods of marketing since the users of the product take control of the marketing activities by giving mouth publicity to the products. In fact majority of the customers are 100% satisfied by the result of the products and they act as the market ambassadors for the body shop product. The body shop company is one of the first companies in the world which enters the market with such a wide range of body care products with natural ingredients. All the other companies of similar products established later only. The early entry of body shop products made them the leaders in this category. Moreover the body shop management can take decisions and work independently because of the lack of share holders in the company. The Body Shop has an international reputation in its ethical standards. Unlike other competitors they never used the ingredients that are tested on animals in their products. Most of the other companies test their products on animals before sending it to the market. The company is well established and has a strong financial backup which again serve as the strength of the company. Weaknesses The main weakness of the company is that the power is concentrated on two persons alone; Anita and her husband Gordon Roddick. This centralized control prevents the company to function in a democratic manner. Opinions from other corners is often neglected by the company chair person and managing director. Moreover the company is connected to many political issues which forced them to act as per the needs of the politicians. The body shop company has a positive attitude towards charity work of helping the poor people in the communities in which it works and for that purpose they were forced to sell their product at a comparatively higher price. Charity work is a compulsory policy. The competitors on the other hand have no such charity works in the community in which they operate were able to reduce the price of their product. This resulted in loss of market for the body shop in many countries. Severe competition from all over the world is another weakness for the body shop. Principal Competitors are Bath & Body Works Inc.; The Boots Company plc; The Estee Lauder Companies Inc. etc. (The Body Shop International plc, 2003) The competition has weakened the market share of the body shop in many countries. Moreover they were not flexible enough to adjust with the new challenges raised by globalization and liberalization. Opportunities The increased awareness of men about their appearance is definitely an opportunity for the body shop. Previously only the females were more bothered about their appearances compared to men, but as per the current trends show that even men are more conscious in their appearances and beauty concepts. The increased number of online buyers has opened another opportunity for the body shop. The advanced internet technologies enabled the customers to purchase online more freely. The increased willingness of the aged people to utilize anti ageing products is another opportunity for the body shop. Moreover the falling interest rates also play a vital role in favor of the companies franchise business. Ban on the sale and marketing of animal tested cosmetic products throughout the EU is an opportunity for the body shop since they were against the animal tested cosmetic products. Threats Unstable political system in the Aloe Vera supplier country Guatemala, Unstable political system in the Brazil nut oil supplier country Peru, collapse of banking sector, the fall of pound increases the price for imported gradients, slower distribution and unstable supplies of ingredients are the main threats for the future operations of the body shop (The BODY SHOP Marketing Plan, n.d). Conclusions The body shop is one of the oldest cosmetic product manufacturing companies in the world which utilizes natural ingredients to manufacture body care products. It is more popular in the world because of their stands on ethical and environmental issues. They were engaged in more charity works in the communities in which they operates. Their main strength is the lack of conventional marketing and main weakness is the power structure in the organization. Increased awareness of men in their appearances is an opportunity for them while the lack of material availability is a major threat for their future operations. Globalization and liberalization has increased the competition in the market share of the body shop gets reduced considerably as per the latest trends. References 1. Body Shop International - SWOT Analysis, (2007), Retrieved on June 22, 2009 from http://www.termpapersmonthly.com/essays/102162.html 2. The Body Shop International PLC Strategic Analysis Review , (2009), Retrieved on June 22, 2009 from http://www.bharatbook.com/Market-Research-Reports/The-Body-Shop-International-PLC-Strategic-Analysis-Review.html 3. The BODY SHOP Marketing Plan, (n.d), Retrieved on June 22, 2009 from http://www.scribd.com/doc/10326152/1-the-BODY-SHOP-Marketing-Plan1 4. The Body Shop International plc, (2003) Retrieved on June 22, 2009 from http://www.fundinguniverse.com/company-histories/The-Body-Shop-International-plc-Company-History.html 5. The body shop- Our history, (2008), Retrieved on June 22, 2009 from http://www.thebodyshop.com/_en/_ww/services/aboutus_history.aspx Read More