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Body Shop

This essay will explore how successful The Body Shop is, based on its growth strategy. I will be focusing on the following areas: – where they began, where they operate now, to what extent they have grown, the adopted strategies, the effectiveness of the strategies, and their future plans. There are many methods in which a business can take to achieve more growth, some of these are gained through competitive advantage, economies of scale and economic growth. A company could improve its efficiency by using different production methods i. e. lean production, which is where costs are reduced and quality is improved of a product.

Firstly, we will outline the definition of growth strategy, a strategy is a plan for how to produce an objective, it includes the financial, production and personnel resources required (Source: A-Z Economics and Business handbook), A growth strategy refers to an organisational plan that takes into account new global realities such as operating in a new global market place. (Source: www.

times100. co. uk). Another definition of growth strategy is that it seeks competitive advantage with strategic moves that are highly interdependent across countries (Source: www. marketingpower. com). For the purpose of the essay, we will go

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with the second definition. If a business doesn’t grow, it can plan for the future, to reduce certainty and increase confidence in decision-making. However, planning for the future maybe difficult due to shifts and changes in trends.

They could also adopt different strategies such as market penetration, market development, product development and diversification. All of these strategies would assist the Body Shop in achieving growth. Anita Roddick had established the first store of Body Shop in 1976, 6 months later a second store had opened. In 1978, The Body Shop began to expand overseas, making a franchise in Germany. By 1984, it became a public limited company. Up to the year 2000, The Body Shop has aided in campaigns that involved saving whales, helping Romanian orphans and funding healthcare projects.

The Body Shop wants to get larger and increase sales and profits. The Body Shop sells a variety of goods. It is mainly products categorized as skin care, hair, health care, and fragrances that are sold by the company. They are one of very few companies that specialize in selling these kinds of products on a global level and through this they have created a niche market, this helps them in gaining more success, as competition is limited within the markets they operate in.

The Body Shop was one of the first retailers to offer make-over services free of charge by their trained beauty consultants located in each of their outlets. This shows that The Body Shop is willing to increase custom by showing what they offer for free, as they are attracting customers to buy goods by showing that they have free services. Franchises are legal agreements by which local businesses are allowed to setup using the name, logo, and trading methods of a well-known company. (Source: Nuffield Economics & Business)

The Body Shop’s franchising strategy had allowed rapid growth of the company to commence from early years, this has lead to the company producing over 1980 stores, showing an increase by 1979 from when its first store had opened in 1976, showing that they have been successful in growing to what they have become. The Body Shop have grown so large that they operate in 50 markets at present (Source: Item 1), they have been able to do this by introducing new products, diversifying and other schemes such as ‘invent your scent’, which allows the consumer to select to fragrances and mix them into one product.

Franchising has also helped them in entering new markets, as more franchises are being bought in different countries, they are expanding into new markets. From the 1986 save the whale campaign onwards, the company has been against animal testing, and therefore only use natural ingredients in the products they sell, this gives them a competitive advantage and aids them in creating a positive image for the company. By using natural ingredients rather than testing products on animals the company is saving money as if they were to test on animals, they would have to buy the animals and equipment to carry out the tests. (Source: Item 2)

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