Shana Bush Kristin Salerno Rachel Cherne Rich Zeck
Company: The Body Shop Founder: Anita Roddick Headquarters: Littlehampton Main Industry: Toiletries and Cosmetics Want to find out more about The Body Shops Back round!
Check it out"
The Body Shop:Company Pro ile
!" you ha#e a company $ith itsy%&itsy #ision' you ha#e an itsy%&itsy company() % Anita Roddick
*um&le Be+innin+s(((
, -ounded &y Anita Roddick in Bri+hton' .est Susse/ in 1012( , .hy3
4 5esire to sell cosmetics in cheap &ottles in a #ariety o si6es *um&le Be+innin+s((( 7continued8 4 5esire to sell products rom !natural in+redients)
, Products:
4 Started $ith 29 products composed o natural in+redients 4 :sed plain' simple' and hand$ritten la&els
, ;arketin+:
4 5e#eloped a policy o !no money spent on ad#ertisin+)
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=and still +oin+ stron+>
, Pu&licly listed on the London Stock ?/chan+e , 1'0@@ stores $ith o#er <@@ in the :(S( , Stores in A1 countries $ith A@ distri&ution centers , 2'@@@ employees $orld$ide' $ith o#er 2'B@@ at Littlehampton headCuarters
=and still +oin+ stron+> 7continued8
, -acilities:
4 Soap$orks acility in Dlas+o$ 4 Company%o$ned shops in the :K
, E$nership:
4 The Body Shop "nternational: o$ns :K' :S' -rance' and Sin+apore operations 4 Remainin+ A<: "ndependently o$ned and operated ranchises( !"tas is head estimated that The Body
Shop sells a product e#ery @(A seconds $ith o#er 11 million customers transactions throu+h stores $orld$ide' $ith customers samplin+ the current ran+e o o#er 2@@ products and more than A@@ accessories()
7$$$(&odyshop(com8 <
The Body Shop !Kudos)
, 10B1: Company o the Fear 7The Con ederation o British "ndustry8 , 10B0: Retailer o the Fear G :nited Hations Dlo&al 9@@ A$ard , 1001: 2Bth top &rand in the $orld' 2nd in the retail sector 7"nter&rand8 , 100B: 21th most respected company in the $orld 7The -inancial Times8 , 1000: 2nd most trusted &rand 7:K Consumers Association8
The Body Shop !Kudos)
, 10B9: Anita Roddick #oted British .oman o the Fear
!" think all &usiness practices $ould impro#e immeasura&ly i they $ere +uided &y ! eminine) principles 4 Cualities like lo#e and care and intuition() 4 Anita Roddick
C#ick here for more Body Shop Back round: http://www.bodyshop.com/global/index.asp The Body Shop Mission Statement:
To dedicate our &usiness to the pursuit o social and en#ironmental chan+e
To creati#ely &alance the inancial and human needs o our stakeholders: employees' ranchisees' customers' suppliers' and shareholders To coura+eously ensure that our &usiness is ecolo+ically sustaina&le: meetin+ the needs o the present $ithout compromisin+ the uture To meanin+ ully contri&ute to local' national and international communities in $hich $e trade' &y adoptin+ a code o conduct' $hich ensures care' honesty' airness and respect To passionately campai+n or the protection o the en#ironment' human and ci#il ri+hts' and a+ainst animal testin+ $ithin the cosmetics and toiletries industry To tirelessly $ork to narro$ the +ap &et$een principle and practice' $hilst makin+ un' passion and care part o our daily li#es( 7$$$(&odyshop(com8
Company $a#ues:
The Body Shops $a#ues inc#ude:
http://www.bodyshop.com/global/values/index.asp
Interna# %n&ironment:
The mana+ement team includes: Anita L( Roddick T( Dordon Roddick Hon%?/ecuti#e 5irector' EB? Hon%?/ecuti#e 5irector
Peter Saunders Adrian 5(P( Bellamy Alastair S(H( ;urray Iack Keenan "rene ;iller Ronald 5e .aal
C?E' The Body Shop "nternational ?/ecuti#e 5irector Droup -inance 5irector Hon%?/ecuti#e 5irector Hon%?/ecuti#e 5irector Hon%?/ecuti#e 5irector
The a#era+e a+e o the &oard is 9< years old( ;any o the ?/ecuti#e 5irectors ha#e e/perience in retail industries includin+ Ducci Droup' 5anone' The Dap "nc' .illiams G Sonoma' Kra t "nternational' and the Deneral -oods Droup( "n the last Cuarter o 2@@1' there $ere se#eral unsolicited o ers to purchase the Company( -e&ruary o 2@@2 &rou+ht the decision to remain an independent company and make some si+ni icant chan+es in the Board( Click on the hyperlink or the ull Press Release(
http://www.bodyshop.com/global/investor/pdfs/business_anouncement_feb.pdf
'o Marketin !
The Body Shop has no marketin+ department and no ad#ertisin+ department( They operate accordin+ to criteria' $hich places more emphasis on human #alues than on strictly commercial considerations( Anita Roddick spends most o her time doin+ the marketin+ acti#ities such as campai+ns and con erences( The Body Shop ne#er ad#ertised in ne$spapers or ma+a6ines &ecause this type o promotion $ould increase the cost o the product( -or The Body Shop' the most e ecti#e and use ul $ay o ad#ertisin+ is to use its shops and its sta ' as $ell as usin+ issues a$areness' such as !Acti#ate Sel %?steem)( The Body Shop launched a campai+n usin+ the !Ru&y 5oll) 4 a realistic lookin+ doll to promote real $omen( They used it in their stores' hosted de&ates' unded research' and held con erences all related to sel %esteem' all acti#ities that point &ack to The Body Shop(
The ne$est #enture or The Body Shop is the Jat home &usinessJ' $here trained consultants come to your home and demonstrate the products( This is a#aila&le in our :S states so ar and is $orkin+ on urther e/pansions(
%(terna# %n&ironment:
The $orld$ide cosmetics and toiletries market has a turno#er in e/cess o KB@ &illion dominated &y maLor companies like Proctor and Dam&le' :nile#er' Shiseido' LMEreal' A#on and Re#lon( $$$(+eocities(comNAthensN2221N&ody(html(
)ther competitors inc#ude:
Britain: Boots and Lush "reland: Hectar :(S(: Bath G Body .orks' Eri+ins' and A#eda
The Body Shop $as the leader in the natural products area' &ut no$ most o their competitors ha#e ollo$ed suit( There is +ood ne$s or The Body Shop &ecause there is hi+h +ro$th potential in their market( !The +lo&al toiletries and cosmetics market is estimated to &e +ro$in+ at an annual rate o appro/imately <O( This underlyin+ +ro$th in the market' to+ether $ith the opportunity to +ro$ market share in markets around the $orld' pro#ides a solid oundation or the uture +ro$th o The Body Shop() 7$$$(&odyshop(com8
Consumers:
Accordin+ to Perdict Research' !shoppers are +oin+ to supermarkets rather than retail cosmetics stores or &eauty aids() They also ound that supermarket chains $ill dou&le their share o the health and &eauty market to 2@O in the ne/t i#e years() This means that The Body Shop is +oin+ to chan+e its strate+ies i it $ants to compete(
Click on the hyperlink or the 2@@1 Annual Report
http://www.bodyshop.com/global/investor/pdfs/ra2001.pdf
-inancial Recap
, -F @1:
4 1<O sales increase 4 5id not meet e/pectations 4 Loss o operatin+ pro it , 9@O less than pre#ious year % due to unplanned hi+h e/ceptional costs
-inancial Recap
, .hy $ere e/pectations not met3
4 Lo$er mar+ins on ne$ products not achie#ed 4 "n#entory le#els had a ne+ati#e impact on $arehouse and interest costs 4 E#erall lack o ocus on product herita+e
Keys to Success(((
, Controllin+ operatin+ e/penses
4 Body Shop 5irect G mail order &usiness
, He$ ?uropean currencies sta&ili6ation
4 Reduce interest rate risk and lo$er lia&ility ineCuities
, *ome Sellin+ -ocus
4 11O increase in sales last year
The positi#e note has &een the Cuick response to each area that hindered the companyMs o&Lecti#es( Product mar+ins ha#e &een restored to last yearMs ne$ product releases &y reducin+ product costs and ensurin+ the same mar+ins on uture releases( "n#entory reductions ha#e &een made &y decentrali6in+ mana+ement responsi&ilities to the re+ional le#el' $hich allo$s them +reater control o#er le#els or their respecti#e area( Lastly there $ill &e a slo$ do$n in introducin+ ne$ products and a +reater emphasis on core products( .orld$ide sales increased &y 1O to nearly K9@@ million in e#ery re+ion( The sales +ro$th can &e deri#ed rom the openin+ o 111 ne$ store $hich' &rin+ s the total num&er o stores $orld$ide to 1'BA1( All re+ions reported positi#e +ro$th e/cept the :K( A+ain althou+h there $as increase in sales pre%ta/ pro it $as do$n rom pre#ious years( .orld$ide pro its ho$e#er re lected an impro#e per ormance in the Americas o set &y lo$er outcomes in the :K and particularly in ?urope and the ;iddle ?ast( There are our maLor re+ions o in#estment o outlets o $hich there are ABB company%o$ned stores( The re+ions are :K G Repu&lic o "reland' Americas' ?urope G ;iddle ?ast and Asia Paci ic(
"n the :K G Repu&lic o "reland re+ion there are <19 shops o $hich the company o$ns 190( This re+ion accounted or a 1O loss in o#erall operatin+ pro it( The loss can &e attri&uted to se#eral actors like increase in store o#erhead costs and markdo$n costs( *ome sellin+ throu+h The Body Shop 5irect mi+ht &e the diamond in the rou+h as it sho$ed a 11O increase in sales( There are o#er 2'29@ re+istered consultants that held o#er 1@A'@@@ home parties( This is an area to $atch as it +ro$s(
The Americas re+ion comprises the :nited States' Canada and the rest o the Americas( There are A1< stores o $hich 29A are company o$ned stores( There $ere only < ne$ store openin+s' $hich is not #ery acti#e in a pro ita&le marketplace( E#erall operatin+ pro it increased &y 11O( There are a planned 19 ne$ openin+s and <@ store re ur&ishments or the comin+ year( *ome sales $ill &e e/perimented here in the states o the success ul esta&lishment in the :K(
The ?urope G ;iddle ?ast re+ion $hich' is the lar+est operates 2BA stores $ith only 99 &ein+ company o$ned( The re+ion comprises o 21 countries' $ith Dermany' -rance and Austria ha#in+ company%o$ned stores( There has &een stron+ +ro$th $ith AB ne$ stores openin+ across the re+ion( Eperatin+ pro it plummeted &y A@O due in part to the $eak ?uro e/chan+e rate( There is stron+ +ro$th in -rance' Saudi Ara&ia and Spain' $hich o set the poor per ormances in some ;iddle ?astern and Scandina#ian countries(
1@
The Asia Paci ic re+ion comprises o 1< countries across Horth Asia' South ?ast Asia and Australasia( There are A20 stores $ith only 2@ company%o$ned( Retail sales $ere stron+ yet operatin+ pro it $as e#en( Iapan and Tai$an sho$ed si+ni icant losses $hile Korea and *on+ Kon+ sho$ed stron+ +ro$th(
The Body Shop can &e ound in A0 countries $ith the 2B1 stores in the :S and 20A in the :K leadin+ the $ay( E the :SMs 2B1 stores' 29@ are company o$ned and o the :KMs 20A stores' 19@ are company o$ned( The impact and in luence is #ery stron+ as to the direction the stores takes rom the home o ice(
Some inancial pro&lem areas that need to &e taken into account rom past per ormances lookin+ ahead to the uture( Eperatin+ e/penses relatin+ to company o$ned stores ha#e taken a si+ni icant Lump o#er the last period( E#erall e/penses increased o#er 2AO or reasons pre#iously noted in the openin+ comments( The sin+le lar+est increase $as $ith operatin+ costs in#ol#in+ the mail order &usiness and Body Shop 5irect( 5ue to the increase in company o$ned stores the associated administrati#e costs also increased urther addin+ to the e/ceptional costs( The sta&ili6in+ o the ne$ ?uropean currencies $ill +reatly enhanced the inancial outlook as it $ill reduce the interest rate risk and lo$er lia&ility ineCuities that are currently &ein+ e/perienced( ;ost o the current de&ts held are due $ithin one year' $hich $ill ree cash or urther rein#estment( The recent acCuisitions ha#e dampened the short%term outlook &ut &ecause o the short term restructurin+ o the de&t the inancial outlook should return to increasin+ returns Cuickly( The o#erall past i#e year inancial outlook per ormance has &een a#era+e &ut has sho$n re&oundin+ capa&ilities o#er the last year( The comin+ year $ill &e a slo$er paced +ro$th year that re ocuses
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the time and ener+ies to $hat the company $as &uilt upon to return it to the path or$ard(
The Body Shop operates on the &elie that the key to impro#in+ per ormance and raisin+ standards is ound throu+h the measurement o the &road impact o &usiness acti#ities( "n order to dri#e lon+%term success and maintain the stakeholder relationship' The Body Shop has de#eloped a com&ined approach to per ormance measurement and pu&lic reportin+( Thou+h The Body Shop $as unsuccess ul in the implementation o last yearMs strate+y' they ha#e taken action to address each o the issues that prohi&ited this success( Their current strate+y is a coherent plan thatMs &ased on the eed&ack rom their stakeholders( "t ocuses on medium and lon+%term results( The o#erall strate+y is to increase #alue or all stakeholders( There are three principle o&Lecti#es that play a role in the success ul implementation o this strate+y(
?nhance The Body Shop &rand #alue
, Stren+then uniCue product herita+e
"mpro#e Eperational ? iciency
, ?/pand customer , Reduce product cost &y $orkin+ $ith reach and e/perience suppliers to impro#e e iciencies $ithin o the &rand the supply chain , Achie#e reduction in o#erhead costs
12 , Reduce in#entory holdin+s
Rein orce stakeholder culture
, "ncrease purchases rom Community Trade suppliers , Reduce ener+y consumption and commit to use rene$a&le ener+y , "ncrease a$areness o climate chan+es , En+oin+ pro+rams o stakeholder consultation G pu&lic reportin+
"n addition to these o&Lecti#es' The Body ShopMs ne$ product plan ocuses on a small num&er o initiati#es that are dri#en &y market needs( They $ill also &e reintroducin+ some discontinued products due to customer eed&ack(
The current in#estment strate+y or The Body Shop ocuses on !ne$ stores and store re ur&ishments' $hile=continuin+ to in#est in point o sale systems to impro#e operational e iciencies() 7Annual Report' p+( 1A8 Another channel that $ill &e urther de#eloped is home sellin+( *ome sellin+ has pro#en to o er +reat
1<
syner+y $ith the store%&ased &usiness and to &e hi+hly success ul in the :K and $ill &e on trial in the :S and in ;e/ico durin+ the current year( A core competency o The Body Shop is its stakeholder culture( " $ould e#en ar+ue that this is a distincti#e competency or The Body Shop( This culture includes e#erythin+ rom commitment to the community' to the en#ironment and to the protection o animals( "t is #ital that they are success ul in rein orcin+ this culture( The use o stakeholder consultation in com&ination $ith pu&lic reportin+ is a +reat $ay to assure that that or+ani6ation is maintainin+ their commitment o deli#erin+ #alue to the stakeholders( A second maLor stren+th o the or+ani6ation is itMs stron+ &rand name( .hile the name o The Body Shop already has stron+ loyalty rom its customers and $orld$ide reco+nition or its commitment to the en#ironment and its superior products' openin+ ne$ channels to reach e#en more customers canMt +o $ron+( The home sellin+ that is &ein+ initiated at The Body Shop is a +reat e/ample o one o these ne$ channels( There are so many people lookin+ to $ork rom home and' at the same time' there are many people that $ant to !shop) rom home and skip the hassle o the mall( The opportunity has presented itsel and The Body Shop is takin+ ad#anta+e o it( Di#en the +ro$th o the or+ani6ation and its recent restructurin+' it is critical or The Body Shop to ocus on impro#in+ operational e iciency( Reducin+ in#entory holdin+s and impro#in+ e iciencies $ithin the supply chain are a +reat place to start( A potential $eakness and threat or The Body Shop e/ists in the price o their products( E ten' a consumer can ind similar products at a raction o the cost( *o$e#er' indi#iduals that &uy The Body Shop products are usually there &ased on the concept and The Body ShopMs commitment to the en#ironment' animals and the community( -ocusin+ on this !niche) market eliminates a lot o the threat and the $eakness o their pricin+(
1A
The Body Shop' thanks to the +uidance and #ision o Anita and Dordon Roddick' created and sustained a ne$ market' one that appeals not to commercialism' &ut to acti#ism( "t has &een imitated &y numerous companies' toutin+ use o !natural products)' &ut The Body Shop has &een a&le to di erentiate themsel#es enou+h to remain uniCue( *o$e#er' remainin+ $here they are could mean that they are cau+ht &y the closest competitors( There are se#eral key points to &e considered $hen contemplatin+ ne$ strate+ies or The Body Shop( They include: "mportance o the !stakeholder culture) Hecessity to impro#e operational e iciencies Current Strate+ies' such as *ome Sellin+ and Hiche ;arketin+
.e also kno$ that the industry is e/pandin+ rather than contractin+' The Body Shop' as o -e&ruary' is +oin+ to remain independent' and they are makin+ positi#e strides to$ards &ecomin+ more inancially sta&le $ithin the ne/t year( So $hat does that mean3 .hat is the &est strate+ic decision or The Body Shop3 The Body Shop has a consistent track record $ith a 5i erentiation Business Strate+y' inherent in their &usiness' so the ocus $ill remain on Corporate Strate+ies( Three possi&le alternati#es include:
Pertical "nte+ration
Not just using earth-friendly suppliers, but owning them!
, Ad#anta+es:
4 Stron+ sellin+ point % !kno$in+ $here the materials ori+inate) 4 !.orld Community) in#ol#ement % strike a chord $ith key stakeholders
, 5isad#anta+es:
4 Epen up or criticism i en#ironmental pro&lems 4 "ncreased o#erhead costs 4 *i+h initial e/pense
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*ori6ontal "nte+ration
Shouldnt all your beauty products be earth-friendly?
, Ad#anta+es:
4 Stron+ Brand loyalty 4 Choose products &ased on issues
, Sel %?steem enhancin+ clothes' #itamins' etc( , "kea%style &athroom urniture % sa e or en#ironment
, 5isad#anta+es:
4 .eakened Brandin+ 4 "ncreased Costs 4 He$ sta to de#elop products 4 Stores are already ull>
4 ?asy to e/pand *ome Sale products
:nrelated 5i#ersi ication
Shouldnt all your purchases be earth-friendly?
, Ad#anta+es:
4 Stron+ Brand loyalty 4 "ssues Based
, Sel %?steem enhancin+ dollsNtoys' childrenMs products , Tra#el: Trips that make a di erence
, 5isad#anta+es:
4 Loss o 5i erentiation 4 "ncreased Costs 4 0N11: Tra#el di icult to sell 4 ?sta&lished markets di icult to penetrate
4 RoddickMs Reputation
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A ter considerin+ the ad#anta+es and disad#anta+es o the three strate+ies' Pertical "nte+ration makes the most sense or $here The Body Shop is at ri+ht no$( "nstead o $aterin+ do$n their stron+ &randin+ $ith other products' $hether industry related or not' they can look to$ards #ertically inte+ratin+ their operations( The company already touts the act that they purchase their supplies rom Dlo&al Community suppliers' and partnerin+ or o$nin+ some o the operations $ould only stren+then their position( Also' since they ha#e a maLor ocus o reducin+ their operational e/penses' ha#in+ some control o#er their suppliers $ould reduce middleman e/penses( This strate+y could look t$o di erent $ays( The irst $ay is throu+h partnerships $ith +lo&ally conscious suppliers( The second is throu+h outri+ht purchase o supplier operations( The &est tactic or The Body Shop $ould &e create some key partnerships in the upcomin+ year to !test out the $aters)' especially since the ne/t iscal year is +oin+ to &e a !reco#ery) year inancially( Then the oundation $ould &e there to mo#e into o$nership positions $ith the suppliers( The controls or the strate+y $ould take place throu+h e#aluatin+ the operatin+ e iciencies' RE"' and the impact on the company as a $hole( The Body Shop $ould need to ask the Cuestion:
Both parts $ill need to &e #isi&le to &e a +ood strate+y or The Body Shop( The company has come a lon+ $ay since 1012( The uniCue mi/ o cheap products and socially conscious &eha#ior has made an impact on the industry and the
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$orld $e li#e in( As The Body Shop mo#es or$ard' it must keep their #alues in mind and an eye on the num&ers to continue to make an impact in todayMs $orld(
1B
