Strategic Management help on: The body shop
- Executive Summary
This report takes into consideration the strategic evaluation of the organization The Body Shop. The report highlights the background i.e. about the organization, followed by an in depth analyses of the external environment with the help of the Five Forces Porter’s Model.
The internal analysis of the organization i.e. The Body Shop is done with the help of the Strength, Weakness, Opportunity & Threats of the enterprise. Critical evaluation of the mission, vision, values of the organization is being done in the report. The future opportunities of – The Body Shop in the Chinese market is being highlighted in this report. The marketing channels, promotional activities & pricing strategy is being done.
- Introduction
The Body Shop has been referred to as the second largest cosmetics brand all across the globe. The enterprise i.e. The Body Shop is headquartered in West Sussex (England). The organization was originated in the year 1976 by Ms Anita Roddick. The organization was engaged in production of various vegetables goods such as Foot Lotion, Body Butter, etc. In the subsequent years, the growth of the organization could be seen. The stocks of the organization were raised & approximately 1200 products were sold. The products line of the organization increased & many other products such as products for hair, foot, body, home were also added. In the year 2007, The Body Shop was regarded as one of the most vegetarian enterprise. In the year 2006, this organization was merged with L’oreal.
The founder of the organization i.e. Anita Roddick visited one of the stores in San Francisco which was named as The Body Shop. This shop consists of body lotions, creams, shampoos, etc. The shop was owned & controlled by two businessmen. The organization encouraged the people to visit their store as by bringing their old bottles & procure heavy discounts on the same. In the year 1986, the company became listed with LSE. The different products offered by the enterprise were Body Lotions, Shampoos, Skin Creams, Hair, wide range of make-up, gifts, perfumes, soap bars, etc.
The Body Shop has many social as well as environmental issues all across the world. The body shop has been rendered to as a foundation which is a charitable trust & was originated in the year 1990. This organization refers to the first organization which was covered under the Cosmetics Standards. This company was the first enterprise which helped in breaking the entire market by not testing the products on the animals. In the year 1986, The Body Shop was termed with Greenpeace (Policy of Donations, 2006).
Based upon the various surveys as well as tests, it has been noticed that, The Body Shop refers to one of the organization which does not test its product on animals. The company carry forwards one of the most important program known as the Community Trade program. This is only cosmetic organization amongst the entire cosmetic industry which practice trade in a well defined manner. The program is applicable in 24 countries keeping in mind the 31 suppliers. By undertaking such type of program, approximately 15000 people were employed. The major aim of this program is to employ as many people as possible.
Some of the essential facts of body shop have been discussed as under. They are as follows:
Þ The number of stores of The Body Shop has been estimated to be approximately 2100 in number.
Þ The presence of The Body Shop could be seen in 55 countries.
Þ The organization i.e. The Body Shop operates its trade programs in approximately 24 countries.
- Body
2.1 External Analysis
In order to perform the external analysis of The Body Shop, Five forces porter’s model could be used. This marketing model would help in order to see the organization from five different perspectives i.e. competitive rivalry, threat of competition, bargaining power of buyer & sellers & threat of substitute goods.
This would help the organization i.e. The Body Shop to forecast the attractiveness of the cosmetics industry & locate the various factors which should be kept in mind in the years to come.
Þ Threat of new competitors
The first aspect which should be kept in mind would refer to the threat of the new competitors which are arising & increasing day by day. With an increase in the competitors, the profitability or the revues generated by the organization would tend to decrease.
Some of the aspects which should be kept in mind in case of the threat of new competitors for The Body Shop would be as follows:
Þ The barriers to entry for the new companies should be made high. This means that only few organizations would be able to enter the cosmetics industry.
Þ Economies of scale
Þ Switching or Sunk Cost
Þ Requirements of the capital should be kept in mind
Þ Various advantages should be attached with it
Þ Brand equity would also play one of the crucial roles
Þ Government policies should be given due consideration
Þ The intensity of competitive rivalry
For most successful organizations, the level of rivalry increases with an increase in number of competitors in a particular industry. Some of the aspects which should be kept in mind by The Body Shop which would help to overpower its competitors would be as under:
Þ High levels of advertising should be done. This would help in feeling the presence of the Body Shop.
Þ Attractive slogans, offline & online innovations strategies should be kept in mind
Þ To prepare a strong & a powerful strategy to overpower its competitors
Þ The technology used in the manufacturing of the products should be upgraded. This would help to build pressures for the competitors
Þ Vertical integration should be used. This would help the Body Shop to strengthen the rivalry amongst the various players in the market.
Þ The threat of substitute products or services:
Some of the aspects which should be kept in mind in case of threat of the substitute products for The Body Shop would be as follows. This would help in order to reduce the threats as well as decrease in the switching cost of the buyers:
Þ Differentiation amongst the products
Þ Propensity of substitutes
Þ Providing sub standard products
Þ Switching cost of the buyer should be kept in mind
Þ Number of substitute products available in the market
Þ The bargaining power of customers (buyers):
The bargaining power of the customer refers to the second aspect which should be kept in mind while conducting the five forces porter’s model for The Body Shop.
Some of the aspects which should be kept in mind in case of bargaining power of buyers for The Body Shop would be as follows:
Þ To keep a note of the volume of the buyers
Þ Appropriate information should be made available to its customers
Þ Proper knowledge regarding the substitute goods should be made available to its buyers
Þ The buyers are price sensitive; therefore the prices should be kept in a manner which would not increase the switching cost (Policy of Donations, 2006).
Þ To have certain types of differences amongst the products being offered to the buyers
Þ The products should be differentiated in some or the other manner
Þ Bargaining leverage
Þ The bargaining power of suppliers
In case of the cosmetics industry the bargaining power of the suppliers could be referred to as the inputs which would be used in order to produce a particular thing, the raw materials, labor, services offered would also come under this head. This would help the organization to keep in mind the various factors of production.
Some of the aspects which should be kept in mind in case of bargaining power of suppliers for The Body Shop would be as follows:
Þ Differentiation in the inputs used
Þ Switching cost would be relative
Þ Effect of inputs on the differentiated inputs
Þ Substitute goods
Þ Competition amongst the suppliers
2.2 Internal evaluation – SWOT Analysis
SWOT analysis refers to one of the marketing tool which would be undertaken in order to analyze the various internal factors of the organization. This marketing tool would help in order to make an in depth understanding of the strengths, opportunities, threats & weakness.
| Strengths |
Þ The major strength of The Body Shop refers to the brand name i.e. L’oreal associated with it.
Þ The Body Shop’s major ingredient refers to the nature’s delight. This means that all the products offered by the same would consist of natural ingredients. This would help in order to satisfy the customers with the best of its ability.
Þ The brand name L’oreal leads to an increase in the level of brand equity as well as retention of the customers.
Þ 89% of the products do not comprise of chemicals in the personal care goods.
Þ The mission statement mentioned in the report also refers to one of the major strengths of the organization.
Þ The products offered by the same were the products who led to break the entire cosmetics market.
Þ The shareholder’s connection with this enterprise was absent.
Þ Major target audience was the Niche Market.
Þ The organization shares an eco friendly reputation in the cosmetics market.
Þ Customers were associated with the brand.Opportunities
Þ One of the major opportunities for The Body Shop was to launch a product for the men’s as well.
Þ The men’s section would also include the metro sexual.
Þ Increase in the number of stores of the same would help in order to enhance its presence in the various other countries as well.
Þ Different variants of the existing products should be introduced in the market.
Þ The future opportunity for The Body Shop could be seen with the establishment of a store in the Chinese Market.
Þ Various sponsorships & donations should be used which would help to upgrade the image of the organization
Þ The marketing channel which should be adopted by The Body Shop in case of the Chinese Market would be through Direct Channel i.e. “Body Shop at Home”, online marketing “The Body Shop.com”. 
Weakness
Þ The products offered in the US market are not up to the mark.
Þ People lack trust in the products offered by The Body Shop.
Þ Supply Chain management of this organization was not regarded up to the mark.
Threats
Þ Fall in the prices of Pound would refer to one of the major threats for The Body Shop,
Þ Economic slowdown in the economy would also affect any of the industry on high street.
Þ Lack of distribution of the products.
Þ Legislation in banning the products tested on animals as well as formulating a marketing policy would lead to high levels of completion amongst the various players in the market.
Þ Unstable number of suppliers along with unstable exchange rate would adversely affect the cosmetic industry.
2.3 Mission
The mission statement refers to the statement which would help the customers to have a clear insight regarding the products & services offered by the same. The mission statement of The Body Shop assumes that – “the enterprise would offer our customers one of the best products along with high levels of commitment attached to it” (Policy of Donations, 2006). The organization would operate in such an environment which would help in order to preserve the planet Earth.
The Body Shop has set its levels of commitments & act upon the same in the most structured manner. Such type of commitments would be attached with the various types of principles, actions, and contributions in forms of charity either in cash or kind. Donations of any type would not be accepted as it would lead to various types of conflicts in the same.
The organization i.e. Body Shop would channelize all its donations with the help of bug foundations, groups or institutions, etc. The committee would be operated along with the various types of donations.
2.4 Vision
The vision statement of nay organization would refer to a statement which would help the organization to decide & keep a track as to what is to be done in the years to come. The vision stated in the Annual report of the organization states that – “The organization should be regarded as one of the best in the entire cosmetic industry. The organization should be converted into such a type of an enterprise which would help to change the entire cosmetic industry”.
The owner of the company i.e. Anita Roddick states that, the beauty of our organization lies in the fact that we are one of the most planned & structured organization who keeps a track of the following aspects such as what is to be done, how it is to be done, when it is to be, what should be done which makes us different as compared to the other cosmetic brands available in the market.
One of the major visions of the organizations is that, “the way to look beautiful is to stay happy forever”. While making the products which are being used in the organization are being used from the nature’s house. The major constituent would refer to the ingredients from all over the globe. The products which are being offered to the (Murphy, 2010) customers would be quite effective & efficient which would enhance the existing beauty of the customer thereby, improving the beauty of the person. This helps the organization to be on the top amongst all the major competitors in the cosmetic industry i.e. Mac, Garnier, Lakme, Revlon, Maybelline, etc.2.5 Values
It has been seen that, at The Body Shop high levels of values could be seen. This would encourage as well as have an ownership of the same. The various levels of the organization i.e. top, middle & low level of management possess different types of values.
The international values would help the director of the company to have full ownership of the same. The international values are always kept on the forefront which would help in the proper decision making of the process. A value committee has been formulated in the organization. This would help in order to govern as well as take care of the entire value system within the enterprise. The value committee consists of the various people such as managers, directors, etc. Different types of values are taken into consideration under each level of management (Murphy, 2010). Various value principles have been covered under the strategic decisions of the organization.
Various external stakeholders should be engaged in the entire process of value formation. The external stakeholders should be included in the panel which would help in reviewing the overall performance as well formulates plans policies, procedures to be implemented in the organization.
| Governance | Monitoring & Evaluation |
| Executive Board |
Þ Each & every director in the board would keep in mind the various functions.
Þ International Values should be kept in mind by all the directors in the board.
Þ Values should be issued under the international values.Þ The top level management would keep in mind the various types of performances.Value Committee
Þ Consists of senior managers & formulates executive meetings
Þ Discuss the various initiatives.Þ The report on value initiatives would be reviewed.Functional ownership
Þ Key Performance indicators to be implemented.
Þ Annual bonus is dependent upon the various types of initiatives.
Þ Various policies, procedures in terms of value should be kept in mind.Þ Testing of the products on animals is banned as per the Cosmetics Standards.
Þ Ethical trade program should be undertaken.
Þ Auditing as well as proper reports must be formulated.
- Opportunities for Body Shop
The future opportunity for The Body Shop could be seen with the establishment of a store in the Chinese Market. While launching its products in the Chinese Market, it must be seen that, the products have to be tested upon the animals. Therefore, new technologies have been launched by the Chinese market which would help not to test the products on animals (Hamel & Prahalad, 2008).
The various marketing & pricing strategies which should be used by The Body Shop have been discussed as under. They are as follows:
Þ The product levels in the Chinese Market would be under five different levels such as the corporate values; natural products with natural ingredients, most effective products, moist whiten products & the skin protection products (Murphy, 2010).
Þ The competition for The Body Shop in the Chinese Market would occur due to the prices charged by its customers. Initially, price skimming should be practiced which would help the Body Shop to recover all its expenses.
Þ The marketing channel which should be adopted by The Body Shop in case of the Chinese Market would be through Direct Channel i.e. “Body Shop at Home”, online marketing “The Body Shop.com”, etc (Murphy, 2010).
Þ Various advertising strategies should be used such as advertisements, attractive posters & eco-friendly methods should be used.
Þ Various sponsorships & donations should be used which would help to upgrade the image of the organization (Hamel & Prahalad, 2008).
- Conclusion
Hence, it could be concluded that The Body Shop has been referred to as the second largest cosmetics brand all across the globe. The enterprise i.e. The Body Shop is headquartered in West Sussex. The organization was originated in the year 1976 by Ms Anita Roddick. The organization was engaged in production of various vegetables goods such as Foot Lotion, Body Butter, etc.
The products line of the organization increased & many other products such as products for hair, foot, body, home were also added. In the year 2007, The Body Shop was regarded as one of the most vegetarian enterprise. In the year 2006, this organization was merged with L’oreal.The external analyses as well as the internal analysis would help the organization in order to perform an in depth research & take care of the various factors which might affect the functioning of the organization. SWOT & Five Forces Porter’s model would help in order to perform the same. The future opportunity for The Body Shop could be seen with the establishment of a store in the Chinese Market. While launching its products in the Chinese Market, it must be seen that, the products have to be tested upon the animals. Therefore, new technologies have been launched by the Chinese market which would help not to test the products on animals (Hamel & Prahalad, 2008). The last section of the report take into consideration the various marketing strategies which could be adopted by the same & help them to establish in a new province i.e. The Chinese Market.
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