Body Shop’s Ethical Strategy Case Study Essay
Ethical business is built on relationships. Ethical activity is concerned with human activity and so is business. From this perspective bad ethics is bad business – customers, suppliers and employees ultimately all leave. Ethical business would consider the following issues while pursuing business strategy; involvement in the community, honesty, truthfulness and fairness in marketing, use of animals in product testing, agricultural practices e. . intensive farming, the degree of safety built into product design, donation to good causes, the extent to which a business accepts its alleged responsibilities for mishaps, spillages and leaks, the selling of addictive products e.
g. tobacco and involvement in the arms trade, trading with repressive regimes. Ethical issues arising from internal and industry practices are a follows; treatment of customers – e. g. onoring the spirit as well as the letter of the law in respect to warranties and after sales service, the number and proportion of women and ethnic minority people in senior positions, the organization’s loyalty to employees when it is in difficult economic conditions, employment of disabled people, working conditions and treatment of workers, bribes to secure contracts and child labor in the developing world and business practices of supply firms.
Unethical business strategies would simply involve the following unethical practices; pricing lack of clarity in pricing, dumping – selling at a loss to increase market share and destroy competition in order to subsequently raise prices, price fixing cartels, encouraging people to claim prizes when they phoning premium rate numbers, “bait and switch” selling – attracting customers and then subjecting them to high pressure selling techniques to switch to an more expensive alternative, high pressure selling – especially in relation to groups such as the elderly, counterfeit goods and brand piracy, copying the style of packaging in an attempt to mislead consumers, deceptive advertising, irresponsible issue of credit cards and the irresponsible raising of credit limits, unethical practices in market research and competitor intelligence, selling goods abroad which are banned at home, omitting to provide information on side effects, unsafe products, built in obsolescence, wasteful and unnecessary packaging, deception on size and content, inaccurate and incomplete testing of products and treatment of animals in product testing. The ethical business mind of the Body Shop can be clearly seen from its 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, customers, franchisees, 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, national and international communities in which we trade, by adopting a code of conduct which ensures care, honesty, fairness and respect”.
The Body Shop uses its stores and its products to help address human rights and environmental issues. The Body Shop has always been recognizable by its green color, only color that could have been found to cover the damp walls of the first shop. This very color has in fact never been changed over the years, being a clear indication of company’s environmental concern. As far as the advertisements of the products are concerned, Anita uses the unconventional method of advertising to stay within the profits with principles philosophy. Pursuing ethical business strategies demonstrate many advantages, however, they are certain disadvantages attached to them.
From the profit earning point of view, the amount of money earned from business by companies that follow ethical business strategies may be comparably lower than that of which do not pursue ethical strategies. This is simply because some portions of the earnings are used towards to solving the environmental and social issues. And it sometimes consumes a lot of time and energy that could be used to acquire more profits. Not all strategies have to be exciting growth strategies. If prospects are poor in some product-market, then a “phase-out” strategy may be needed. The need for phasing out becomes more obvious as the sales decline stage arrives. But even in market maturity, it may be clear that a particular product is not going to be profitable enough to reach the company’s objectives using the current strategy.
Then the wisest move may be develop a strategy that helps the firm phase out of the product-market, perhaps over several years. Obviously, there are some difficult implementation problems here. But phase out is also a strategy and it must be market-oriented to cut losses. In fact, it is possible to milk a dying product for some time if competitors move out more quickly. This situation occurs when there is still ingoing demand although it is declining and some more customers are willing to pay attractive prices to get their old favorite. When a firm focuses its efforts on satisfying some customers-to gain its objectives-the effect on society may be completely ignored.
Further, some consumers want products that may not be safe or good for them in the long run. Some critics argue that businesses should not offer cigarettes, high heeled shoes, alcoholic beverages, sugar coated cereals, soft drinks, and many processed foods-because they are not good for consumers in the long run. These critics raise the basic question: Is the marketing concept really desirable? Many marketing managers and socially conscious marketing companies are trying to resolve this problem. Their definition of customer satisfaction includes long range effects-as well as immediate customer satisfaction. Then try to balance consumer, company, and social interests.