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Research
Paper on The Body Shop
Some businesses such as The Body
Shop seem to be taking a lead on ethical issues. Rather than
simply responding to consumer pressures they have taken a stance
and declared themselves committed to certain standards.
The Body Shop believes in 'Delivering Value' which looks at
conventional accounting areas such as profitability,
relationships with customers and staff, and relationships with
suppliers (all of which have an ethical dimension); 'Social
Responsibility' which looks at areas such as ethical policies
(particularly in regard to investment), charitable support and
community involvement; 'Ecological Sustainability' which looks
at areas such as ecologically sound purchasing of supplies,
recycling waste, energy consumption and provision of ecological
financial products and services and 'environmentally friendly'
making sure that their products are 'green' , not animal tested
and 'kind to the environment'.
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According to Anita Roddick, the founder of The Body Shop “If I
wanted to maximize my profits, which is supposed to be this
country's duty of business, I would have to lie and sell
anti-aging cream, which is one of the greatest, most insidious
lies out there. I am not intending to do that even though it is
one of the most profitable products in the beauty industry. If I
wanted to maximize my profits I would take the two or three
months that we do campaigning, which comes to about 3-4 million
quid, and put it into keeping the shareholders happy. But I am
not interested in maximizing the wealth of shareholders; I am
interested in keeping my company breathlessly alive and socially
active and yes, we get great dividends”
The Body Shop saves a huge amount of money by not advertising,
and by not going around in Lear jets, or having compensation
packages like many others do. Instead they use this money in
their social activities.
The strong organizational culture of the Body Shop is very much
compatible with diversity and change. The Body Shop operates in
my opinion, as a multinational company only because the major
changes are dictated from England and Anita Roddick has control
of each promotion and product that each store carries. All the
bureaucratic systems are formed to send information and data
respecting new owner applications and informational material
directly to Anita Roddick herself and she operates in England
and makes decisions from that one country.
This form of company relies heavily on accurate transfer of
communication, which has so far in this case proven effective.
Who knows were the future will take this organization but it
seems to be always one step ahead of change. Through Anita's
passion and her belief that business can be fun, it can be
conducted with love and can be a powerful force for good; she
had already had the basic fundamentals of today's business
ethics. Working within today's rapidly changing business
environments, it takes passion and ingenuity to stay
competitive.
The Body Shop’s value’s, both functional value and personal
values, is brought to the forefront of marketing today. The old
standard's of competition; Quality, Price and Time (if you want
something today and of high quality, it will cost you) are no
longer valid. Technology has neutralized time and quality and
one can only survive through price wars or cost cutting for a
limited time. In addition, the consumers have much more control
or say in today's marketplace, making these three elements of
equal demand and maybe even expected by the consumer.
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Innovation is reached beyond new product development to create
and communicate value and connects with the values of the
consumer's life. Innovation is now extended to a meaningful
connection between you and the consumer. The Body Shop goes past
the economic economy to a values economy. To ensure that all
employees and potential employees are treated fairly and without
unjustified discrimination regardless of their color, creed,
race, ethnic origin, gender, sexual orientation, marital status,
disability or age.
According to MANAGING DIRECTOR, of THE BODY SHOP “I want to run
a business the sort of way I'd like to be treated if I were an
employee, I think it's just making people feel good about coming
to work, feeling part of a family type of relationship with each
other, and, it certainly is, just the way I want to be seen as a
company that puts a lot of value in employees.”
If an employee needs time off for a religious holiday, this
should be accommodated within the usual holiday entitlement but
such a request for leave on specific dates will not unreasonably
be refused. A pregnant employee, or one who has recently given
birth, must not suffer any disadvantage because of her
condition. The Hospice will consider employees and potential
employees for part time work or for job-share where this is
practical within the demands of the job in question. All
decisions to refuse part time or job share applications must be
fully justified by the needs of the job. Ability, performance
and the job market should determine pay differentials. Virtually
all non-retail companies strive for extra sales and bigger
profits. You can present programs designed to get it for them!
And your Greenhouse product line will provide the punch they
need to make the programs work.
For years what made the Body Shop successful was that it didn't
charge franchise fees or royalties, preferring to let the
franchisers pocket them. Most of the company's earnings came
from wholesaling the merchandise it makes, much like Italy's
Benetton, which wholesales clothes to its stores. Body Shop is
revamped its product line while trying to maintain its green
ideals. The results have been mixed. Rather than perfecting
sales in its existing shops, the company charged into the top
malls in the U.S. over the past two years, in hopes of gaining a
foothold against the fast-expanding Bath & Body Works. It did
not work. The U.S. operation lost $3.7 million in the first six
months of fiscal 1996 on sales of $46 million. Same-store sales
fell by 8%.
As Body Shop expands, it is sticking to its more profitable
franchising strategy, the approach that made it successful in
the first place and this should be kept in the future as well.
In mature markets like UK, the Body Shop's biggest, with 44% of
its revenues, the company should launch new marketing strategies
to revitalize sales. Since the country is nearly saturated with
stores, the company should begin a program of direct mail and
in-home sales.
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It's going to take years to tell whether the new marketing and
sales strategies can turn around the company's fortunes and to
know to what extent Roddick will let her professional managers
run the business at the expense of her beloved environmentalism.
In the meantime, the fact that there's hardly a financial
analyst who has much positive to say about the company's
prospects suggests that, for now, investors should probably
stick to buying the Body Shop's soap but not its shares.
References
Grifin, Ricky W., & Ronald J. Ebert, “An Interview with Anita
Roddick -The Founder of The Body Shop Business” 5th edition,
(p108 – p132)
Wallace, Charles, (1996) “Can the body shop shape up?” April
Issue
Robbins, Stephen P. and Robbin Stuart-Kotze, (1994) “Management
Canadian” Fourth Edition, Prentice - Hall INC., ONT, pg. 15-142
Keegan, Moriarty, Duncan, Paliwoda, (1995) Marketing Canadian
Edition, Prentice - Hall INC., ONT, pg. 738-48
Nickels, William G., James M. McHugh, Susan M. McHugh, Paul D.
Berman (1994), “Understanding Canadian Business”, Richard D.
Irwin, INC. pg. 199- 411
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