Strategic management – The Body Shop Analysis

Table of Content

Strategic management is vital for the effective functioning of an organization, should provide long term focus, and is founded on some process of analysis. The most fundamental strategic objective is typically seen as ‘beating competitors’. ” This is the objective on which every business should be focused” (Pearson 1999:63).

Strategic management locates the organization externally and internally in terms of position and organizational culture, providing a consistency with which to address both major and less significant decisions.Many management gurus have quoted various company successes to justify their latest strategic theories, attracting followers from across industries and sectors by their strategic holy grail. These frame works range from long-range planning, through evolutionary frameworks, portfolio frameworks, competitive strategy and the core competency framework. For the purpose of this essay on Body Shop’s strategic management, author have chosen to refer to porter’s frame work, because it is espoused as the ” most important and most widely adaptable” of the frameworks (Pearson 2000: Keele open learning course text).

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THE BODYSHOP:The Body Shop began in Brighton in 1976. By September 1989 the business had grown to include some 422 shops with 127 branches in the UK and the Channel Islands. Now The Body Shop is an international company rapidly expanding around the world trades more than 40 countries and employs around 6000 people. Anita Roddick, the founder of The Body Shop, opened her first shop in March 1976 at Brighton (Roddick, 1991,p.

77), and from that small shop developed to a global business in the last two decades. But it is a business unlike any other because they have no marketing department and no advertising department. They operate according to criteria, which place more emphasis on human values than on strictly commercial considerations.KEY COMPONENTS OF BODYSHOP’S STRATEGIES:The worldwide cosmetics and toiletries market has a turnover in excess of $80 billion, dominated by major companies like Procter and Gamble, Unilever, Shiseido, L’Oreal, Avon and Revlon.

It is said that the average cost of launching an up-market fragrance is now over �5 million. Advertising and packaging account nearly half the retail price of a bottle of perfume. And the founder of Revlon, Charles Revlon, remarks that; ‘ In factory we make cosmetics, in the store we sell hope’. (Roddick, 1991,p.

12)The aim of The Body Shop is to establish a new work ethic that will enable business to thrive without causing adverse to the environment, at both local and global level. Anita Roddick has a clear message: ”our products reflect our philosophy. They are formulated with care and respect. Respect for other cultures, the past, the natural world, and our customers.

It is a partnership of profits with principles”. (The Body Shop Promotional Literature cited in (Welford, 1993,p.148)The major task of The Body Shop is to define and satisfy the needs and expectations of the customers more effectively and efficiently than its competitors. Marketing is the key part for identifying, anticipating and satisfying the wants of those targets.

When you establish a business first thing is; you set up the marketing department but The Body Shop has a different view. They don’t have a traditional marketing department but Anita Roddick spends most of her time in marketing activities such as campaigns and conferences. As Roddick (1991,p.21) tells us: ”a great advantage I had when I started The Body Shop was that I had never been to business school.

.. Skill is not the answer neither money.What you need is optimism, humanism, enthusiasm, intuition, curiosity, love, humour, magic and fun and that secret ingredient euphoria.

None of this appears on the curriculum of any business school.” The above points, which are noted by Anita Roddick exactly, explain the strategy of The Bodyshop.During the 1990’s consumers started to buy more environmentally goods. And companies have been developing new market strategies about the environmental issues of their products.

This is also known as ‘green marketing’, which is more about changing the type of advertising. Green marketing becomes a whole company approach and philosophy for the business (Forrester, 1990,p.48). 90% Company imbued with environmental concern.

Selects own campaigns and campaign partners. Illustrates aspects of sustainable developmentAccording to The Body Shop’s company policy; they never advertised in newspapers or on television. The reason for this is; that type of advertising will increase costs hence price of the products. Also they didn’t want to give an image like; their products make people younger, healthier and more attractive.

This could be resulted as false belief to the company and losing customer loyalty. But they always aimed to sell quality products at reasonable prices. For The Body Shop, the most effective and useful way of advertising is to use its shops and its staff. By using the shop windows they run posters and by using the staff they inform their customers and sometimes collecting thousands of signatures.

They spread their messages by both those ways.Probably the campaigns made them this successful in the business. Such as, campaigns to encourage customers to fill their containers cheaper again or fill larger bottles. Many people have a strong trust that The Body Shop’s products have not been tested on animals and those products have less impact on environment.

And the benefits of using products are printed on labels to an explanation of using it. These sorts of things increased the confidence to the company. Also the programmes and actions such as improvement in energy efficiency, reduce, re-use and recycle of waste management, reduce the packaging waste were perceived by the consumers in a very positive way for the benefit of the company.COMPETITIVE STRATEGY AND BODYSHOP:Porter’s competitive strategy takes a much closer look at the characteristics of the industry and the strategic position of the individual business in that industry.

The identification of the generic strategies of cost leadership and differentiation, whether they are focused or on a board front, is a way of defining direction and achieving concentration and consistency. In addition, the requirements for continuous industry analysis are also prerequisites for flexibility since it involves the definition of critical trends which may impact on the firm’s effectiveness as cost leader or differentiated producer, and thus identify the necessity to make strategic changes. I think the BodyshopFor the last few years quite a lot companies have been started to sell natural products. One of the biggest is Nectar, which is an Irish company.

Most of the things are similar to The Body Shop. To freshen up the customer loyalty and confidence to the company, The Body Shop published and distributed its environmental audit reports to any interested parties like consumers, employees, the media, local residents etc. Although very few companies have published their environmental audits such as Norwegian firm Norsk Hydro, Noranda of Canada and British Airways, it is certain that they gained from this. Especially the environment reports of the Norwegian firm Norsk Hydro are published and distributed to every household and organisation in one of their sites.

(Welford,1993,p.116)STRATEGIC MANAGEMENT:The Body Shop doesn’t give advertisements directly to the media because of economic reasons but they know how to use media and how to advertise themselves very well. Since 1985, the company works together with environmental organisations and Friends of Earth campaigning on major environmental issues such as Acid Rain, Tropical Rain Forests, and The Ozone Layer etc. All these actions and campaigns were effective, which were strongly supported by the media and press.

Not only in UK they had campaigns but also they had some in international levels. For example they supported Boy’s and Girl’s Towns in Southern India where street children receives homes, education and food. Also they had some activities in Bangladesh, Nepal and in Brazil for forest people. The Body Shop has controlled its own destiny by using public relations rather than to have it controlled for them.

The Body Shop succeeded to come this position by believing on sustainable development. It requires a new approach to business and Anita Roddick has proved that we can bring our expectations into reality by reshaping the way we do business. The company has won many awards; Company of the Year 1985, Anita Roddick: Business Woman of the Year 1985, Retailer of the Year 1989 and United Nations Global 500 Award 1989. (Forrester, 1990,p.59)

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