The Body Shop - Case Study


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It is a case study on The Body Shop, a cosmetic company founded by Anita Roddick now under L'Oreal.
It shows the birth, growth, bottlenecks, achievements, competitors, social responsibility, markets and the product range of Body Shop.

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The Body Shop - Case Study

  1. 1. THOUGHTS SANS BOUNDARIES ENTREPRENEURSHIP PROJECT YASHASWINI AGARWAL 2012  
  2. 2. CONTENTS Sno. Topic Page No. 1 Childhood 1 2 Education 2 3 Married Life 3 4 Idea and Foundation of The Body Shop 4 5 Growth, Bottlenecks and Expansion 7 6 Market In India 10 7 Market in China 12 8 Belief in Products 13 9 Wards and Recognitions 14 10 Social Service / The Body Shop Foundation 15 11 Books of Anita Roddick 19 12 Illness 20 13 Bibliography 21 14 End 22
  3. 3. Roddick was born Anita Lucia Perilli in a bomb shelter in Sussex, in an Italian Jewish immigrant community, and she was brought up in a family of 4 children. Her family had left Naples, Italy just before the Second World War and settled in England. Her mother, Gilda, ran a café (Clifton café), and was in the habit of recycling. At a very small age Anita got into the habit of recycling. Roddick says that she never experienced leisure in her childhood as she and her siblings were made to work in the café after school time and on weekends. She grew up working in the café, her parents owned, developing a strong work ethic and learning about the inner workings of a business at the same time. Her parents divorced when she was 8 and her mother married her first husband’s cousin, who died of Tuberculosis after only a few years of marriage. At the age of 18 she came to know that her mother’s first husband was not her biological father.
  4. 4. EDUCATION She went to school at St Amy’s Convent, and then at Maude Allen Secondary Modern. After leaving high school, Roddick trained as a teacher at Bath College of Higher Education (now known as Bath Spa University). She enjoyed teaching, making her lessons special, incorporating music and drama into her lessons. In 1962, Roddick got a scholarship to study in kibbutz in Israel. Roddick returned to England after a prank got her expelled from the kibbutz. After holding and leaving several jobs, she took some savings and travelled through Tahiti, New Hebrides, New Caledonia, Australia, and on to Johannesburg, her last stop. She had to leave South Africa after she went to a jazz on a black night thereby, violating apartheid laws.
  5. 5. MARRIED LIFE After two years of traveling she returned to England where her mother introduced her to one of the customers of their café, a Scottish poet named Gordon Roddick, a kindred bohemian spirit who loved to travel as much as she did. Anita and Gordon got married in 1970. Their daughters Justine and Samantha were born in 1969 and 1971 respectively.
  6. 6. THE BODY SHOP IDEA AND FOUNDATION Together Anita and Gordon opened a restaurant and a hotel in Littlehampton. Their first entrepreneurial experience taught them the first valuable lesson of business. They learned that "When you make a mistake, you have to face up to the fact and take immediate steps to change course." After three years of running both hotel and the restaurant, the couple decided to quit this business. Gordon Roddick wanted to fulfill his long-term dream to take a horseback expedition from Buenos Aires to New York. Anita supported him in his decision and agreed to sell their restaurant to finance his trip and decided to open some small shop to make her living for her family. When the question arrived regarding what type of shop was to be opened, she thought skincare would be easy. She realized that she did not have enough knowledge of the subject, however, thought that these gaps could be filled in by researching, reading and communicating. In the early 1970s, Anita Roddick (then Anita Perilli) had visited a shop in Berkeley, California who sold naturally- scented soaps and lotions called The Body Shop. The Berkeley Body Shop was run by Peggy Short and Jane Saunders who used natural ingredients, and helped to employ and train immigrant women. Anita Roddick with Jane Saunders
  7. 7. Her early travels had given her a wealth of experience. She had spent time in farming and fishing communities with pre-industrial peoples, and was exposed to body rituals of women from all over the world. She remembered during her world travels, seeing women using the things made from plants and fruits that did a better job in cleaning their skin than the products she bought at home. At that time there were no inexpensive skin care products, and it was not a common practice to work with natural ingredients. Anita decided she would be the first. Her previous experiences with running a hotel and a restaurant gave her the conviction that even if her idea was wrong, she would be able to tweak it until it works. Anita planned to open a tiny shop that would be filled with cosmetics which were made only from natural ingredients. The foundation of The Body Shop's environmental activism was born out of ideas like these. Anita opened the first Body Shop with the aim of exploiting some of the ideas that she had formed while traveling around the world. She took out a modest loan and founded The Body Shop in Brighton, in March 1976. The first The Body Shop was basic and at first sold only 15 products.
  8. 8. The cheapest bottles Anita could find were the plastic containers used by the hospitals to collect samples. Because there was no money to buy enough bottles, the customers were offered to refill the empty containers. Refilling, reusing and recycling became the company’s way of life even before it became fashionable elsewhere. She even had customers bring the bottles back and she would refill them right there in the store. It proved an unexpected success and the business began to grow when Gordon returned and helped in the business. The store was very successful. Before long she was looking for a place to build a second store. Soon they were selling the rights to open Body Shops to others. In 1984 they decided to sell stock in the company and Anita and Gordon became millionaires overnight! The Body Shop became a different kind of business: business drawn to innovation and creativity, instead of the commonly used principles of marketing and organization. The shop sold just a handful of creams and hair-care products; its walls were painted green, to cover the damp spots. The Body Shop became famous for its green color and "green" policy. None of her products would be tested on animals She came up with the name from signs she had seen over car repair shops in the United States. The design of the logo had to be cheap. The friends helped Anita with filling the bottles and handwriting the labels.
  9. 9. GROWTH, BOTTLENECKS AND EXPANSION She opened a second shop within six months, by that time Gordon was back in England. The company went public in 1984. By 1991 the Body Shop had 700 branches and Anita Roddick was awarded the 1991 World Vision Award for Development Initiative Award. By the end of 1992, there were more than 700 Body Shop stores generating $231 million in sales. However, as The Body Shop's profits and name-recognition grew, the Roddicks began paying more attention to social causes than their business, launching an array of environmental projects rather than revamping the company's aging product line. Better-run imitators, such as The Bath & Body Works, ate into The Body Shop's customer base. And critics, who were once Body Shop allies suddenly started attacking the company for "hypocritical practices," generating a wave of negative press. As a result, sales fell and profits dulled. By 1996, it was clear that a change was needed. The Roddicks stepped back from running day-to-day operations and installed managing director Stuart Rose, who promptly restructured the company, bringing in other professional managers, installing tighter inventory control and streamlining processes. The changes failed to have the desired effect, and sales continued to decline. After a dismal first quarter financial performance in 1998, Roddick ceded her post as CEO to Patrick Gourney, a professional manager from a French food conglomerate, and farmed out her flagging U.S. franchises to the Bellamy Retail Group. In January 1999, the company announced it was giving up manufacturing to focus on retail, and the projections were good. By 1999, Body Shop stores had blanketed Britain and moved beyond.
  10. 10. By 2004, the Body Shop had 1980 stores, serving over 77 million customers throughout the world. The Body Shop was voted the 2nd most trusted brand in the United Kingdom, and 28th top brand in the world. A store of The Body Shop in Dubai, U.A.E. In 2006, The Body Shop was sold to L’Oreal Cosmetics for 130 million pounds. Anita Roddick donated 30 million pounds to her charity foundation. When the company became a subsidiary of the L’Oréal Group, Roddick continued to monitor their work closely, making sure that operations were being run in line with her and her company’s core values. Now 30 years (2006) on, The Body Shop is a multi local business with over 2.045 stores serving over 77 million customers in 51 different markets in 25 different languages and across 12 time zones.
  11. 11. The Body Shop’s full range now has over 300 products. The Body Shop international has operations across 52 countries through its affiliates and subsidiaries. Since The Body Shop had been first launched in the UK with subsequent expansion into North America and Western Europe, much of the emerging markets in Asia, Africa and Latin America remained a new opportunity. At present almost two- thirds of the stores are franchised and the remainder are company-owned, and The Body Shop is expanding rapidly in the emerging markets by franchising outlets in these markets.
  12. 12. MARKET IN INDIA The Body Shop launched in India on June 6 2006 at the Inorbit mall in Malad, Mumbai. In 2006 itself the Body Shop launched 8 new stores in different parts of India. The iconic British skin care brand and retailer The Body Shop has set its sights on India with a fresh approach, helping it get closer to the country’s consumers and leverage its brand recall in the market. India is a key market for The Body Shop, in terms of growth potential and size. Due to India’s connection with natural beauty products, it has relevance even at a brand level for The Body Shop. The company’s ranges—it has more than 1,200 products available there—have been doing extremely well in India, and that is why the company is targeting the country for a 10-times growth rate in the next five years. By 2015, The Body Shop plans to touch the lives of 15 million people in India. The Body Shop branch in Chandigarh, Haryana.
  13. 13. The Body Shop International CEO Sophie Gasperment says, “The brand awareness is very high here. It genuinely resonates with the consumers here, and we found the fit spontaneously. This is because we are nature inspired, and use natural and organic ingredients as much as possible. People here know that The Body Shop stands for a certain value and is an ethical brand. They appreciate the fact that our products are 100% vegetarian.” The other cosmetics producing brands in competition with the body shop are: 1. Hindustan lever 2. Ponds India 3. Lakme 4. Johnsons & Johnsons 5. Procter & Gamble
  14. 14. MARKET IN CHINA It is clear that business organizations must be profitable to survive. Although The Body Shop promotes its core values concerning the environment and human rights, it would rather be appropriate to say that The Body Shop has become a brand with more global vision than a non-profit organization. The Body Shop can invest in China not merely because of the huge market with a population of 1.3billion, but for the huge demand of Chinese. The past annual reports of the Body Shop shows that hand and body lotions are the most popular around the world, which is predicted to be a great need of Chinese in the coming years. The Body Shop saw China as a huge market and made efforts to sell franchises and export products but the Chinese Government restricted them to do so. The Body Shop does not export its products to China, because cosmetics sold there have to be tested on animals, which is against the company’s rules. However, The Body Shop has always sourced many of its baskets and other non cosmetic supplies from China.
  15. 15. BELIEF IN PRODUCTS Anita and her husband Gordon worked hard to ensure that The Body Shop was different from other cosmetic companies. They wanted the business to be profitable, yet based on solid principles. The idea was to bring values into an industry that was certainly not value-driven, and to create social and environmental change by having a business that was built on the principles of honesty, fairness, and respect for the individual and care for the environment. Anita did not want to deceive women by telling them that moisturizing cream from The Body Shop would shed years off their faces. Her products were never positioned as miracle treatment for the skin or hair. It is probably the only cosmetic chain that never used beautiful and glamorous women to market its products. Their target market comprised of the following people- 1. Well educated women’s aged 18-55 2. Well educated men 30 -55 with high income 3. Interested in ethical and environmentally friendly products 4. Willing to pay more for quality beauty products In 2007 they launched Wise Women - A range of advanced products especially developed for mature skin.
  16. 16. In 2008 they launched Well Being Ranges - total energy, deep sleep, divine calm and simple purity. Moringa is a new collection of bathing oil, creams, body soap and lotions.
  17. 17. AWARDS AND RECOGNITIONS Since 1984, she was given a host of awards, some of which are listed below: 1984 – Veuve Clicquot Business Woman of the Year 1988 – Officer of the Order of the British Empire (OBE) 1991 – Center for World Development Education’s World Vision Award, USA 1993 – Banksia Foundation’s Australia Environmental Award 1993 – Mexican Environmental Achiever Award 1993 – National Audubon Society Medal, USA 1994 – Botwinick Prize in Business Ethics, USA 1994 – University of Michigan’s Annual Business Leadership Award, USA 1995 – Women’s Business Development Center’s First Annual Woman Power Award, USA 1996 – Women’s Center’s Leadership Award, USA 1996 – The Gleitsman Foundation’s Award of Achievement, USA 1997 – United Nations Environment Programme (UNEP), Honouree, Eyes on the Environment 1999 – British Environment & Media Award 1999 – Chief Wiper-Away of Ogoni Tears, Movement for the Survival of the Ogoni People, Nigeria 2001 – International Peace Prayer Day Organisation’s Woman of Peace
  18. 18. 2003 – Queen Elizabeth II appointed Anita Roddick a Dame Commander of the Order of the British Empire. In recognition of Roddick’s contribution to business and charity, Queen Elizabeth II made her a dame, the female equivalent of a knight. 2004 – Honorary Doctorate of Public Service, the Sage Colleges.
  19. 19. SOCIAL SERVICES When Anita was 10 she had discovered a book about the Holocaust and this had a significant impact on her and influenced her to empathize with the human condition. She had gone on to become one of the most prominent and well respected social entrepreneurs in the world. Not only had she a strong sense of social responsibility, she had also ingrained these into her company values. As The Body Shop's profits and name-recognition grew, Anita began paying more attention to social causes than their business, launching an array of environmental projects rather than revamping the company's aging product line. 1985 - Stop the dumping of toxic waste in North Sea, Greenpeace 1986 - Campaign against whaling of sperm whales, Greenpeace 1987 - Acid Rain pollution, Friends of the Earth 1987 - Published first 'Green' Diary, Friends of the Earth 1980s - Against Animal Testing for cosmetics, collected 4 million signatures through shops 1990 - Set-up project to refurbish 3 Romanian orphanages. Work extended into Albania and Bosnia 1994 - Marked 50th anniversary of UN Declaration of Human Rights, launched 'Make Your Mark' campaign with Dalai Lama, in partnership with Amnesty International. 3 million thumbprints collected in 34 countries. 17 prisoners of conscience released 2001 - Present - Challenging Exxon-Mobil, World's No 1 Global Warming Villain and campaigning for renewable energy for world's 2 billion poorest people, Greenpeace 2001 - Present - Sweatshop Labor and workers' rights in Free Trade Zones, National Labor Committee 2001 - 2002 - Positive Energy Campaign with Greenpeace
  20. 20. 2003- Present - Help Stop Violence in the Home – Domestic Violence Campaign with Refuge (the UK’s largest single provider of accommodation and support to women and children experiencing domestic violence) THE BODY SHOP FOUNDATION The Body Shop Foundation was set-up in 1990. Over first 6 years of operation it donated more than 3.5 million pounds to 180 charitable groups. The Body Shop Foundation is funded by an annual donation from the company and through various fundraising initiatives. They have supported a wide variety of projects since they began in 1989, but have always stayed true to three areas, namely:  Animal Protection  Environmental Protection  Human Rights Their aim is to:  Support organizations at the forefront of social & environmental change  Support groups with little hope of conventional funding  Support projects working to increase public awareness
  21. 21. Some branches of the Body Shop
  22. 22. The Bollywood actress Dia Mirza is the brand ambassador of The Body Shop, India. An advertisement of The Body Shop. Anita Roddick shows a demonstration to Diana, Princess of Wales in 1986.
  23. 23. “Business As Unusual” and “Body and Soul” written by Anita Roddick were published in 2000 and 1991 respectively. “Take it Personally” (2001) was also written by Anita Roddick.
  24. 24. Illness On 14 February 2007, Anita Roddick revealed to the world that she had been diagnosed with liver cirrhosis which was a result of the long-standing undiscovered hepatitis C. In spite of her illness she tried to stay fit and active. Roddick died on 10 September 2007. She kept her promise to leave her estates to charities. She is survived by her husband and their two daughters, Samantha and Justine. She was a courageous woman, a shining star who lived each day as if it were her last. She leaves behind millions of admirers. She has certainly touched many lives.
  25. 25. BIBLOIGRAPHY information/ generation-recalls-Mark-Constantine-Lush-founder.html k_64_founder_of_body_shop_cosmetics_chain/?comments=all Roddick feasibility-research-and-strategy--pdf.html non-animal-cosmetics-test.aspx
  26. 26. The End