Body Shop analysis - Case Study Example

Body Shop Case analysis 1. Introduction In the current environment of highly competitive business, the success of the firms needs to be the major strategic goal. Indeed, in the fast changing dynamics of global business, the survival of the companies heavily relies on external contingencies and factors that significantly impact the performance outcome. The firms are therefore increasingly adopting creative mechanisms to become proactive participants of changes within and outside the society. Body Shop International has been one of the market leaders of the cosmetic industry that has created a niche market position. The various factors that have contributed to its success story have redefined business process across the globe. The paper would be analysing the various external and internal factors of the firm that have contributed to its success within the cut throat business. 2. Case summary The Body Shop was founded in 1976 by Anita Roddick, who strongly believed that natural ingredients are the best way to take care of the body and remain beautiful. She was a social activist and environmentalist who relentlessly worked towards the upliftment of the downtrodden and tried to improve the living standard of the poor by generating employment opportunities for them. She genuinely considered that business must become the major propellant of change and evolve with time. Her basic philosophy of social consciousness was the key principle that guided the strategic goals of Body Shop. The huge range of body care products are made from natural ingredients from across the world and cater to people of all strata. She has relentlessly fought for her principles and has ensured that Body Shop products are produced ethically. They not only endorse environment conservation but the natural ingredients within the products are obtained from people and places where employment opportunities have been created for the benefit of people. South east Asia, Africa, Brazl, Mexico etc have been major suppliers of the raw products for Body shop. Anita Roddick has been focused on its action plans and decision making processes that have highlighted its core competency of promoting natural ingredients in cosmetics. Indeed, her vision and mission have been aligned to the organizational strategic goals and objectives. The sustainable business practice, environment friendly products and effective corporate social responsibility has been its hallmark of success. Body Shop has also taken cudgels against animal testing in R&D. The company used strong corporate communication practices to promote awareness for environment through sustainable development and sustainable business practice. Indeed, it has become one of its key motivating elements for its customers who like to endorse its products and services. 3. Strategic issues in bullets 1. The products must be made from natural ingredients The natural ingredients are best things for rejuvenating body and soul. The use of only natural ingredients is important issue within the strategic goals of the company. 2. The business must follow sustainable business practice The company believes that raw materials for its huge range of beauty products must come from sustainable sources that promote social responsibility and sense of accountability towards society. Thus, it encourages a supply chain from poor countries who are rich in natural resources. 3. Committed to the environment conservation The company strongly encourages practices and process that promote environment conservation. BodyShop had not only provided bicycles at reduced cost to its employees but it also uses processes like refilling and recycling of goods. 4. Social responsibility The company believes that businesses must share their profits amongst civil society. Body Shop has significantly been proactive in contributing to the development of under privileged segment of society in the third world countries like India, Nepal, Somalia, Malaysia, Philippines Kenya, Brazil, Mexico etc. The company has also taken up social causes like AIDS awareness, education, homeless programs etc. 5. Against use of animals for testing new products Cruelty towards animals in R&D processes has been one of the most passionate causes of Anita Roddick. The body Shop products are never tested on animals and she has been vociferous against use of animals in laboratory for testing new products. 6. Honesty and ethical consideration within business processes Honesty and ethics are the hallmark of Body Shop products. The products display the actual ingredients used and all shops provide manual that give full details of the ingredients as well as that of products. The employees are trained to disseminate information about product and allay the doubts or queries of the customers. 4. Factors contributing to strategic issues The company exemplifies the process of entrepreneurial creativeness through new product development by observing people from across the globe. Anita Roddick once saw that Polynesian women use extract of cocoa seeds for rinsing their hair. Later cocoa extract was used in many Body Shop products and they also become the major importers of cocoa. Most of Body Shop products are creatively developed and tested on staff volunteers because have been used for hundreds of years. Body Shop has fundamentally relied on customers’ feedback and suggestion to the development of new products. Strong sense of accountability to the community and people at large has been the most vital element of the success of Body Shop. Environment conservation and cruelty against animal have been most prolific issues within the company that have considerably impacted its performance outcome. Anita Roddick has used women intuition and intuitiveness to promote products for women. While she has been vociferous for women causes and issues, she has also been their major supporter for their empowerment. More than 70% of Body Shop workforce comprises of women who are not only knowledgeable about the products but are equally passionate about the issues which are taken up by the company. Effective communication has been the highlight of Body Shop marketing. While traditional components of advertising are not used by the company, it nevertheless uses its modules of social consciousness to promote the causes that it empathises with. The issues are either taken up on regional compulsions or corporate basis by its shops across the world. Information is disseminated through pamphlets, brochures etc from the shops and public awareness is created. This also becomes the major enabling factors that attract customers and enhance its market credibility and position. Interestingly, Anita Roddick has been its own major advertising icon as she has been very popular with the media especially with the various social causes that she has taken up. Most importantly, Anita Roddick, the founder of the company has been most tenacious in its franchising programs. They have been primarily selected not on the basis of financial credibility but for their passionate belief in the Body Shop products. Indeed, in the longer run, the brand equity of Body shop has ensured success. T sends out the message of value and quality that are inherent part of the company and its products. The company has expanded its business across geographical boundary through franchises. The culture of honesty, integrity and innovative inputs are critical paradigms that greatly facilitate transparency and sustainable business practice. It also recognizes the importance of people’s participation in the overall strategy of having collective goals through shared learning. The learning environment provided by the Body shop for its workforce is essential feature of managerial leadership. Exchange of important information, ideas and ideologies between the management and workforce is decisive factor that coordinates and correlates myriad value system to redefine proactive participation of people for improved performance. The shared values have not only served as motivation to excel but also to participate in community development. 5. Alternatives and analysis The company has shown exemplary leadership in creating awareness of social issues vis-à-vis environment conservation, cruelty to animals in R&D, AIDS, development in third world countries etc. But it is observed that the enthusiasm for social causes has often cost the company in terms of its business targets and performance. The success of its campaigns for social issues in UK, European nations and South East Asia was difficult to emulate in United States. The major reasons cited were the stringent laws that clashed with the ideologies of Body Shop. It is also true that the passion for social causes and strong belief in the products are not the most vital ingredients of business success. The entrepreneurial success also depends on business acumen and creative ideas that can be implemented and enhanced to not only create but also to maintain its market position. The initial brand creation was not able to assure its success at later period because the core business goals were subverted by new social imperatives. Social consciousness of Anita Roddick was one of the major issues which had hitherto found it easy to use Body Shop as a platform to showcase her ideals. But the compulsions of expanding business require more stringent measures to inculcate uniformity of business planning and shared goals. The strategic planning is important tool that facilitates effective implementation of the action plans to achieve targets and long term and short term objectives. While it is true that changing dynamics of contemporary business make it essential for firms to incorporate strategies that go beyond the precincts of business goals, the incorporation of social issues within the business planning needs to be well demarcated for effective implementation of organizational strategic plans. 6. Recommendations The company must redefine its goals and objectives so as to realign its vision and mission with its strategic goals and action plans. The company must also promote a well defined market strategy that encompasses its socially responsible behavior. But at the same time, it must also ensure that it does not become obsessive with its social consciousness. It should moderate it by taking up one cause at a time contribute towards it financially rather than encouraging its staff to volunteer on a regular basis. Indeed, there are chances that the employee may lose its focus and neglect its duty to the company. It may not be deliberate but over enthusiasm often becomes the major reason for the downfall. In this case, the lower performance of the employee and thereby of the shop. Sustainable business practice through myriad processes of logistics and supply chain management must be inculcated within and outside Body Shop and its franchises. Use of recycled goods, reduce energy consumption and effective waste management must be made mandatory within the business processes. The company has increasing been involved into political controversies and needs to differentiate between business practice and social activities. The core competencies of the companies must remain the main focus of all its activities, including its activities that highlight its social responsibilities. Hence, the company must refrain from taking part in public campaigns, especially which are carried through its Body Shop premises. The company also needs to evolve new ways of testing new products because there is always an element of surprises which may sometime prove fatal for staff volunteer. Use of technology and robotics within its testing laboratories would not only enhance its capabilities of developing new products but it would also help it to expand its business interests in new areas with success. Changing business strategies in fast transforming business equations are vital issues that provide the business with competitive advantage. The cosmetic products made from natural ingredients were extremely important. The new idea collated with the changing perceptions of the people at large. But now the company needs to come up with fresh ideas that would add value to the existing products. Hence, in the recessive economy, feedback and brainstorming sessions must be accompanied by leadership initiatives that can test new ideas with the fear of failure. The established pattern of behavior must be replaced with flexibility that is able to test new avenues through dynamic process of creativity. The company needs to foray into new arena of products for house pets and probably develop new range of beauty products for them. It would not only ensure that animals are treated with more love and care but it would also send important message that animals have the same need as that of human being. (words: 2001) Reference Case Study. The Body Shop International. Harvard Business School. Read More