Published on March 8, 2014
By: Farha Qureshi (213)
THE BODY SHOP • Founded in 1976 by Anita Roddick • Headquarters in Littlehampton, West Sussex, England • 2,400 stores in 61 countries. • Now part of the L'Oréal corporate group. The BIRTH of BODY SHOP
THE BODY SHOP • Various Body Shop characteristic features were born from the financial necessity. Virtue out of necessity. • The Body Shop’s alternative cosmetics line. • The packaging. • Free publicity.
Core Values • Policy - no animal testing. • Use of volunteers. • LD50
Values Against animal testing Support community trade Activate self esteem Defend human rights Protect our planet
Standing apart . . . • Staff : receptive instead of sales oriented. • Half a day’s wage: for service to community. Thus 3rd generation CSR (proactive). • Staff policy addresses the combination of work, family life and care. • ‘Trade not Aid’ programme. • Selection of employees.
Body Shop’s Mission Statement To dedicate our business to the pursuit of social and environmental change. To creatively balance the financial and human needs of our stakeholders, employees ,franchisees ,customers, suppliers and shareholders To courageously ensure that our business is ecologically sustainable meeting the needs of the present without compromising the future. To meaningfully contribute to local and international communities in which we trade ,by adopting a code of conduct which ensures care, honesty, fairness and respect. To passionately campaign for the protection of the environment, human and civil rights and against Animal Testing within the cosmetics and toiletries industries To tirelessly work to narrow the gap between principle and practice, whilst making fun, passion and care part of our lives.
Strategy for growth • In 1977 - Succeeded in conveying the body shop concept to others by turning it into a FRANCHISE. • In 1984 - Floated on stock exchange • In 1985-1990 – Revenue and profit rose by a factor of 10. • The reasons for increased reputation of Body Shop 1985 – Anita Roddick was named as British women of the year 1989 – She won the award for best British retailer and was honored with the royal Order of the British Empire.
Why setup failed in America? • The three main reasons were: Product price were significantly higher than the massproduced drug store items It failed to open many shop in US because: - Entrepreneur doing business in different states of US is subjected to varying requirements. - Mail order sales were insufficient. Did not advertise.
The Body Shop under fire • Broke the policy of not advertising the products directly to customers. • In 1994 – Jon Entine published the article – The Body Shop in Business Ethics entitled ‘Shattered Image’. He said that Only a small proportion of the ingredients was purchased through fair trade programmes while majority was brought on the world market. Added another serious allegation that 46.5% of the ingredients in their products were not free of animal testing.
Increasing competition • 1600 shops with 500 employees in 47 countries. • Increasing competition. • Attempts to sell its brand in 2001 to Ethical Investors. • The position of managing director was transferred to a professional manager and Roddicks became members of managing board.
A New Start • Jan Oosterwijk, the new director and owner of the Body Shop Benelux. • Efforts to design new products more attractively, with more luxury packing. • The new shop formula was tested in eight shops in 2004 and selling products outside own shops. • The goal was to make more profits and to succeed in binding right target group.
A) Cultural creatives • Care for the ecological problems of the world. • Concern about the discrimination and exploitation of people. • A better living environment. • The importance of a personal lifestyle.
B) Product quality • Functional quality: The product must deliver what they promised. • Visual quality: Packaging must be luxurious and attractive and the shops must look neat and tidy. • Intangible quality ingredients: Animal welfare, Human welfare, Natural and Environmental welfare.
Results of the New Strategy • Increased efficiency in stock control. • Better management of the Supply Chain. • They made efficient use of sales data and the use of the new distribution channels. • The Body Shop repositioned itself as a “Masstige Brand”.
Results of the New Strategy • Bought back the franchise rights in U.K, United States and Canada. • Body Shop launched Community Trade. • The Body Shop also started the Ethical Trade Program in order to improve conditions for workers in the supply chain.
Take Over by L’oreal • Body Shop was taken over by L’oreal in March 2006 for £652 million. • It had displayed the visionary leadership in wanting to be an authentic advocate and supporter of The Body values. • Anita Roddick criticized L’oreal for using harmful chemicals. • Critcs also alleged that L‘oreal exploited the sexuality of women.
Take Over by L’oreal • It was hard to swallow that the Body Shop was taken over by L’oreal. • A statement on a website, Naturewatch said “We feel that the body shop has sold out and is not standing by the principles”. • Body Shop clarified the acquisition by stating that L'Oreal would not diminish its Ethical stance. • L’oreal had purchased a new product testing machine one month earlier from a French Company, SkinEthic that uses artificial human tissue, entirely eliminating the need for ANIMALS.
The Body Shop Later • Failed to retain ethical product differentiation as a “STRATEGY”. • Dilution of the original “COMMUNITY TRADE” formula. • The Body Shop’s confession for animal testing. Hence, The Body Shop could no longer keep its original promises & it started to make mistakes.
Body Shop : Offbeat Approach to Business Mainstream Industries Focus on powerful stakeholders. Animal Testing is a necessary evil. Focussed powerless stakeholders: animals, native population and environment. Deviant viewpoints: packaging and advertising. Open activism in the early stages. Body Shop
Conclusions • Body Shop gradually professionalized its approach along with persevering with several social projects in the face of fierce criticism. • After the takeover by L’Oréal, the management’s attention assumed more business and commercial aspects. • The history of Body Shop has seen 3 phases: rise, fall and recovery. • Different set of ideals in each phase with the latest being a synthesis of the previous two.
ETHICS PAYS, BUT NOT ALWAYS Body Shop is an example of sustainable business that actually does not appear to be so sustainable commercially, in that the competitive advantage of the sustainability was not persevered. Body Shop is an example of sustainable business that actually does not appear to be so sustainable in the moral sense, in that the moral values proved to be unable to withstand the success (and in particular the expansion) of the business.
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