1. 1 What Is All About?
This research analyses the Body Shop case, which includes the company’s history, philosophy and overall strategy. Focal points of the analysis are the foundation and the establishment of the company, its rapid growth through the ’80s, the globalization and the import into new markets, and finally, the problems arising from this sort of action. Anita Roddick, the founder of the Body Shop, came up with the concept of starting a business into the cosmetics field in 1976 although she had no financial or business experience.
The innovative profile of Body Shop, which differed from the cosmetic industry norms of that time, combined natural products, recyclable containers, no animal testing, and generally promoted environmental-friendly policies and social messages. Fame, recognition and rapid expansion all over Europe led Roddicks to enter the U. S. market in the late ’80s. How difficult was it to settle in a highly competitive-new market and keep the secret of success over the Atlantic?
Was it possible for Roddick to keep the originality, integrity, and unique corporate practices with the same results?
1. 2 Body Shop Brief History
|1976||The first shop was started in Brighton, UK|
|1977||The first two U.K. franchises|
|1978||The first overseas franchise in Brussels|
|1984||The stock floated on London’s Unlisted Securities Market at 95p.|
|1986||The tock was sold at 820p.|
|1988||Entered the U. S. cosmetic market starting from New Jersey|
|1990||The first shop opens in Tokyo|
|1991||586 shops worldwide (37 in the USA) and a total of? 50 million market value|
|1996||The company faces a crisis due to a decrease in its profits|
|1997||1500 shops worldwide in 47 countries|
|2001||The first shop in South Africa|
|2005||Entered the Russia market|
|2006||Became “30-years old” and was acquired by L’Oreal for 52,3 million|
|2009||2400 stores in 64 countries worldwide|
2. 1. BODY SHOP
2. 1. 1. Philosophy, Progress, Innovation
When the first store opened on the southern coast of England, no one could imagine the enormous expansion and success that would have gained on a global scale. The product line had an environmentally conscious philosophy and consisted of natural products for body, face, and hair. Some of the reasons that made Body Shop different from the mass cosmetic industry were the following:
- No animal tested products
- No promises to correct woman’s flaws
- Plain and recyclable packaging
- No advertisement
- Social activism
The smart price policy (the products were priced more expensive than mass merchandised products but well under exclusive department store lines), the pleasant environment of the stores, and the environmental sensitiveness helped the company establish itself, through the first, difficult years of its existence. As a result of the above, the company enjoyed outstanding growth during its first decade of existence which was visible not only in the sales numbers but also in the market share and revenues. Part of the company’s philosophy was the maintenance of the originality of the products and the decision to avoid advertisement and marketing in general.
The strict selection of the franchisees was also part of the company’s plan so as to preserve the image of the company and to ensure that every shop will be guided under Roddick’s principles, avoiding focusing only on profit. Furthermore, what is impressive about the Human Resources policy was that 75% of the staff were women because it was easier to become familiar and caring about women’s needs and worries. A matter of great importance was the constant education provided to the staff individually in several ways, such as updated news, monthly video magazine, training tapes, and documentaries. In that way, the staff was informed and ready to deal with each store’s local needs. From the very beginning, Body Shop’s attitude did not comport with the so far cosmetic philosophy; products tested in animals.
Instead, during the first years, testing had been done on staff volunteers, but later on, a formal research department was created. The initial marketing strategy was basically an anti-marketing policy since there was no marketing and advertising department. Moreover, word of mouth was considered as the best type of advertisement. Customers were informed about the products by the employees, resulting in humanizing the company via personal relationships. Consumers adopted Body Shop’s philosophy, as they felt part of the company’s contribution to the environment.
2. 1. 2. The US Market Challenge
The upturn continued both in the U.K. and in other countries where Body Shop seemed to dominate in the cosmetics field.
In 1988, after some consideration by Anita Roddick and her husband, Body Shop entered the U. S. Market, keeping its original strategy and philosophy. This meant that Body Shop would go on without advertisement, even in a highly competitive market as this of the U.S., and that it would not enter shopping malls. However, Body Shop faced growing competition In the U. S market and 3 major problems arose among the initial losses:
- Company’s values and image didn’t appeal in the U. S. market
- Lack of marketing started to affect the company’s overall performance
- Many competitors with similar business profile appeared in the U. S. market, such as Bath & Body Works, Aveda, Origins and Burt’s Bees Food and Drug registrations and laws Due to the above barriers, Roddick’s were skeptical about the transferable image, style, and values across the Atlantic.
The success became fragile and it was vital for the company to reexamine its marketing strategy.
2. 2. ANITA RODDICK
2. 2. 1 Management Style-Personality
Anita Roddick, the founder of the company, was one of the most successful businesswomen who built a reputation through her unique leadership style and management practices. When the British enterpriser opened the first store in the UK had the aim to create an income for her family. However, the brightness, the inspiration, the passion and her “go against the flow” attitude resulted in great success.
The “green sense” and the lack of a marketing strategy created an environmentally friendly profile for the company. When she realized that the products and services considered ethical from the customers, she focused on strengthening the originality and the innovative practices of the Body Shop. It was the rapid growth and the loyal customers that convinced her that the key tool for success was Ethical Consumerism. “The original Body Shop was a series of brilliant accidents. It had a great smell; it had a funky name… We recycled everything, not because we were environmentally friendly, but because we didn’t have enough bottles. It was a good idea.
What was unique about it, with no intent at all, no marketing nous was that it translated across cultures, across geographical barriers and social structures. It wasn’t a sophisticated plan, it just happened like that. ” – Anita Roddick- Anita’s vision was to establish a new policy in the opposite direction of the cosmetic industry and create natural products, avoiding animal testing, and deal with social issues and charity as well. Her intense involvement in community, environmental, and political issues increased Body Shop’s reputation and expansion. It was lucid that the lack of advertisement was replaced by the free publicity and furthermore Anita declared herself always available to the press and customers.
Roddick was aware of that and tried to mix and match the social responsibility and the good fortune of the company. Without dispute, Anita was a talented person, gifted with inventiveness and leadership, which concluded to outstanding success. She epitomized all the aspects of the company’s culture, is dedicated and passionate about the whole concept and spirit of the Body Shop. Her ambition of the continuation of the environmental and charity work was strongly reflected from her total attitude. This attitude was shown from her personal involvement in product development, as she traveled 2-4 months every year around the world to stay updated about ingredients and products.
However, while Body Shop had won great success in Europe, Anita kept socializing and interfering in political events more and more, gaining more fame and recognition. That continuous behavior caused inconvenience, not only to the competitors but also to the indoor environment of the company. Many of the franchisees and staff felt that she confused herself and her very personal opinions with the company. It was the time that Roddick realized that she had never been able to separate Body Shop’s values from her own personal values. The lack of inspiration and motivation from the staff was quite fearful for the company, as the whole philosophy depended on the social and environmental sensibility.
2. 2. 2 Social Activism
Annita’s major environmental-social activities:
|1986||Became officially involved with Greenpeace|
|1986||Created an Environmental Projects Department with “Save the Whales” as its first official campaign|
|1987||“Friends of the Earth” campaign launched|
|1987||Campaigns on matters such as acid rain, recycling ozone layer depletion started|
|1987||Sets up the Environmental Projects Department within the company|
|1987||Sets up the Community Care Department|
|1988||“Trade not Aid” project started|
|1989||“Soapworks project” (“Britain’s own third world”) launched|
|1990||“Stop the Burning” and “Against Animal Testing” campaigns started|
|1990||Association with Amnesty International and FREEZE (anti-nuclear weapons group)|
|1990||The Children of the Edge was founded|
|2001||The Body Shop Foundation was formed to commit to charitable purposes|
Anita showed great commitment to the values of Body Shop even from the very beginning of her business career. The environmentally friendly and socially sensitive profile that she implanted in her company was a key factor to success as it proved to be her own-different-never used before “marketing plan”. She tried to pass on this philosophy to every single franchise store, in order to preserve this image for her company worldwide. That’s the reason she desperately tried to make every store adopt each project she chose, which had to do with social activism or environmental issues.
Body Shop showed social awareness by supporting several campaigns throughout the years (for example AIDS support groups, homeless programs) and applied the “Trade not Aid” project, which was a plan to help communities (usually young people) such as India, Nepal, and others. Anita’s personal biggest Emprise was the development of Fair Trade, which was created to improve the standard of living in Third World countries.
3. 1. Evaluation-Conclusions
Body Shop, under the guidance of Anita Roddick, managed to rise very quickly in the cosmetics market; even Anita had no previous business experience. The set-up of the company as well as the corporate model turned out to be excellent, providing outstanding and immediate success.
The success of the company gets much more credit if we take into consideration the differences that Body Shop displayed from common industry norms and strategies and the inexperience of Anita. The environmental-friendly profile, the social awareness and the political involvement were very innovative strategic movements and rarely used in the past by other companies (never used in the cosmetic industry) which resulted in the foundation of an excellent image for Body Shop. We can assume that these were the critical parts of the business image and the key factors for Body Shop to become widely known and successful. People acknowledged these actions and the image created, helped Body Shop become very famous and consequently very successful rapidly.
However, Body Shop failed to adapt to a new market, that of the U. S., as it didn’t present the same outcome. Although it had an excellent international course, doing awesome in many markets abroad, in U. S. market Body Shop faced hard competition and failed to impress, facing initial losses. The decision to enter such a competitive market without a certain marketing plan and no advertisement was equivocal and showed inadaptability and lack of alternative plans and strategies. Body Shop should try to re-establish and adjust its values to fit in the new environment and moreover the company should deal with the new competitors trying to imitate its image and reduce Body Shop’s share in their favor.
The development of a marketing department within the company, the launch of an advertising campaign and the possible creation of new lines of products could help Body Shop deal with the emerging problems, settle and take a leading role in the U. S. as well as sustain its success globally in the cosmetics industry. Based on personal research data, referring to the period after 1991, Body Shop actually changed its initial strategy, as far as the U. S. market concerned. This sort of action shows a lack of attitude because, at the forefront of the losses, the management style adjusted. In specific, Body Shop created a marketing & advertising department and began its first major advertising initiative, the most prominent part of which was the “Ruby” campaign.
The campaign was personified by Ruby, a doll with Rubenesque proportions who was perched on an antique couch and who looked quite pleased with herself and her plump frame. The Ruby doll, a computer-generated image, appeared on posters, stickers, and T-shirts and in magazine ads. The campaign was launched in the United States in September 1997 following its successful introduction in several other countries. “…All that glitters is not gold… ” Despite Body Shop representation, as “giving most of its profits away,” the company, in its first 11 years, gave no money to charity and had given little money to charitable causes until critical articles began to appear in 1994.
The Body Shop has since responded by significantly expanding its charitable giving. Finally on 17 March 2006, L’Oreal purchased Body Shop for? 652 million. This caused controversy because L’Oreal is involved in animal testing -which contradicts The Body Shop’s core value of Against Animal Testing- and because the company is part-owned by Nestle which has been criticized for its treatment of third world producers.
3. 2. Bibliography
- www.jiffynotes. com
- “Does New Age Business Have a Message for Managers? ”, Harvard Business Review, Martha Nichols, March – April 1994?
- “The Body Shop International”, Harvard Business School, July 1995