Abstract
In spite of widespread criticism from the media and the business community, Anita Roddick’s business, the Body shop continued to grow and to attract customers worldwide. By 1991, Body Shop had 586 shops located all over the world. Most success stories we have probably heard of, have a similar storyline of people following the same path to succeed. Anita’s story is different. Her unusual business practices were uncommon and were completely different from those applied by other companies. She did the opposite of what was done. Though some of her practices affected the company in its latter years, her story is rather interesting since as a business student, it leaves much answered questions. However, this case study will enhance a deeper understanding of business practices and principles and how they differ between entrepreneurs and companies.
Executive Summary
Every other business is founded with the sole purpose of making huge profits for its shareholders. Rarely do we find businesses formed with other intentions. In our case, Body shop was formed as store shop in West Sussex, UK by Anita Roddick. Anita’s agenda was not to generate huge profits but to support her family. Unexpectedly, people loved her products and her business methods which made her shop grow to an extent of opening as a second store. The company grew and expanded internationally, and by 1984, the company had been listed in the London’s stock exchange. In spite of all these changes, the company’s main purpose did not shift to focus on revenue and profits, instead the company under the management of Anita Roddick remained committed to social issues such as the community, the environment, employees and animals. As such, this case study’s main purpose is to analyze Anita Roddick’s business practices. On the onset, the paper will include an introduction which will give a brief history of Body Shop and the company’s progress over the years. Equally important to this case study, is Anita’s life history. The paper will therefore discuss in detail her history in order to understand her as an entrepreneur since our past in most cases affect how we do things and the type of people and leaders we become.
Additionally, the paper will discuss in detail about Body Shop as a company. This being the main body of the case study will discuss the different elements that leads to the success of a business which include customers, products, marketing, unique selling point and social responsibility. The body will discuss this elements as the main factors that led to the success of Body Shop, putting into consideration the role played by its founder, Anita Roddick.
In conclusion, the major ideas mentioned in the paper will be discussed. The conclusion will give a brief summary of the major findings of the paper. They include the fact that businesses people should not always imitate what others have done in order to succeed, since there are no defined business practices and principles to guarantee the growth of a business.
Introduction
While most businesses are run through outlined principles and practices, Body Shop International was founded and managed using unusual principles that were contrary to the business norms and practices. Founded in 1976 as a single store, Body Shop by 1991 had grown to 586 shops, operating in 38 countries (Harvard Business School, 1995). Currently, the company trades in over 60 countries with over 2500 stores with a product range of 1200 products (Ryan, 2012). In 1991, the company’s worldwide sales from its products and franchise licenses were approximately $391 million. Besides growth and huge sales revenue, the company was received awards, in 1985 as the company of the year and in the same year, the founder Roddick received the Veuve Cliqout Businesswoman of the year and also the communicator of the year award.
As earlier stated, the company is known for its unique and uncommon business practices that have made it successful despite the fact that there were against the common business principles that make businesses grow and succeed. Through Anita Roddick, its founder, the company expanded beyond nations and continents is a span of five years. In addition to its unusual practices, the company is applauded for its intensive social responsibility practices that involved animal, human rights and assisting unprivileged individuals in the society both in the U.K and in the Third World nations.
Anita Roddick: Body Shop Founder
Anita Roddick, the founder of Body Shop was raise in West Sussex. Like most children, she went through school, was trained in education and became an elementary school teacher for a short while. Anita was a career woman, before securing a job with the United Nations International Labor Organization where she worked and dealt with Third World women’s right. It seems her social and humanitarian responsibility was birthed while working in the United Nations. Anita can be described as a fun person since she loved travelling around the world, even long before Body Shop was founded. Luckily, for her, she met and married Gordon Roddick who also loved adventure, making the couple a perfect match.
The couple settled down right after the birth of their two daughters. The entrepreneurial spirit in them led to the opening of a hotel in Brighton. However, in 1976, the couple sold their hotel to finance Gordon’s lifelong adventure dream, which was estimated to take two years. With Gordon gone, two children to feed, no income, no money, and no occupation to depend on, Anita had to think of something. What she did have was a thought: a nearby shop offering natively constructed magnificence items. She had identified a location, settled between two memorial service parlors in downtown Brighton. She could call it “The Body Shop.” Plus, she figured, she could paint the wall green to shroud the mold. On the off chance that the organization could not manage the cost of enough containers, clients could undoubtedly bring them back to refill their own. They would call it reusing. In an interview with Third Magazine in 1993, she said, “The original Body Shop was a series of brilliant accidents. It had a great smell, it had a funky name. It was positioned between two funeral parlors-that always caused controversy. It was incredibly sensuous. It was 1976, the year of the heat wave, so there was a lot of flesh around. We knew about story telling then, so all the products had stories. We recycled everything, not because we were environmentally friendly, but because we did not have enough bottles. It was a good idea. What was unique about it, with no intent at all, no marketing nous was that it was translated across cultures, across geographical barriers and social structures. It wasn’t a sophisticated plan, it just happened like that.”
Due to unlimited finances, Anita could not afford an employee and therefore she did all the work, from making the beauty products, to selling, bookkeeping and general management. With her stores success and loyal customers, she attracted the interest of a local businessman who invested 4000 pounds to fund a second store. Moreover, her husband’s trip was cut short, and therefore he came back and assisted her to run the stores.
The shop’s customer base increased over time due to Anita’s unique business practices. Moreover, at the time, women were increasingly concerned about the artificial chemicals that were being used to make beauty products, hence Anita’s natural products was a solution. In the UK, unlike other nations in 1970’s, people were against the testing of products on animals, Anita’s policy which also was against that practice enabled her to win over a huge customer clientele. Among the most unusual thing Anita did to lead people to her shop was to leave a trail of scent leading to her shop. This uncommon act worked for her business, increasing her customer base.
The Body Shop
Due to its franchising strategy, the company’s operations exploded to an extent that by the year 1991, the company had 586 shops around the world. By 2006, the company had 2045 shops, with approximately 77 million customers (Johnson, 2007). The rapid growth was due to franchising where the couple would interview individuals who wanted to open shops under the Body Shop name and sell Body Shop beauty products. This strategy enabled Anita and Gordon concentrate on developing new products.
Interestingly, Body Shop was a company run and managed by women not only in its headquarters but also in the shops around the world. According to Quarter (2000), the company stood out since the driving force behind its success was a woman while men dominated the industry. Quarter (pp. 119) states that, “The body shop provides the opportunity to focus on a woman entrepreneur who has presented a refreshing vision of how a modern corporation can combine skilled business acumen with social activism.” While her husband managed the business behind the scenes, Anita was all over building and managing the business in the limelight.
Besides franchising, the company thrived through its unique products that were made from natural raw materials. Unlike other businesses that had research and development departments to develop innovative products, Anita was the company’s researcher whereby she could travel around the world especially in Africa and India to study the beauty supplements used by women in the most remote places in the world. Her efforts paid off, since through her trips, many products were developed through the ideas she had learnt.
Customers
At the beginning, Anita had no target customers in mind. Her sole purpose was to own a shop and sell products in order for her family to survive. However, with the realization that her small store was growing rather rapidly, something she had not expected, Anita’s strategy changed to providing natural beauty products to women. in those days, men had not become aware of personal grooming as compared to now where the beauty industry has expanded even to provide beauty solutions for men. At the times, body care was a woman thing and hence Anita’s target customers were women who cared about their personal looks and were sensitive to using artificial products. Moreover, her concern for the environment by choosing to recycle containers and offering discounts to customers who wanted their containers to be refilled, Anita attracted a group of customers who shared the same sentiments on environment.
Unique Selling Point
A company’s unique selling point determines its customer base and its position in the market. By 1991, Body shop had made sales totaling to 391 million pounds. A company can only achieve that with a unique selling point that distinguishes it from its competitors. Since its inception, the company focused on providing natural beauty products and focusing on environmental issues. At the times, the market was saturated by companies, which had no concern on the environment. As such, Body shop won over customers by its ‘natural’ and ‘environment’ selling points that increased its market share in the beauty industry.
Marketing
The beauty industry is known for aggressively marketing its products through mass media not only today but also in the last decades. At the time of Body Shop’s establishment, marketing had not evolved as it has now, where the marketing concept have become complex and diverse due to social media, the internet, brands among others. Advertising was the main marketing channel used to promote and bring product awareness to customers. Despite this knowledge on the importance of marketing, it is interesting that the company continued to grow despite its ‘no marketing’ policy. Anita defied the marketing principles and never allowed for the company’s products to be advertised. Amazingly, the products marketed themselves yet their own packages were very plain which is very unusual in the beauty industry where products contain well labled and beautifully designed packages to attract customers. According to Murphy (2008), Anita avoided marketing since at the time marketers were made fun off for putting the interest of investors and shareholders before the society needs. This principle might have worked in UK and other places, but it a huge obstacle for the company in the US since the people in the US highly relied on advertisements to make product choice decisions.
Murphy (2008, pp. 3), states that, “Critics claimed that had Roddick not dismissed the need for marketing for so long, Body Shop could have avoided future problems. But by the end of the 1990s it was paying the price for not devoting sufficient resources to new product development, to innovation, refreshing its ranges and moving the business forward. It seems that heroes can change the rulebook when the tide is flowing with them. But adopting the disciplines of marketing allows companies to anticipate and react when the tide begins to turn against them.” True to Murphy’s claims, it is clear that other provocative business practices adopted by Anita may have worked for the company, but the marketing principle was a wrong move for the company. Though hiring a public relations officer to some extent assisted in marketing, it was not enough for the business since every business requires a combination of marketing elements in order to effectively promote their products since one king of marketing channel is not able to reach an entire group of target customers.
However, it is evident that Anita’s constant campaigns were in itself a form of advertising. According to Quarter (2000), the company promoted itself vigorously without using the usual advertising methods. Anita’s social initiatives provided the company enough media coverage. Anita once said that the media coverage received by Body Shop by being constantly in the news is worth around two million pounds annually. This implies that the company saved a lot of money through Anita’s radical social initiatives.
Social Responsibility
According Johnson (2007), it is likely that Anita could be the pioneer of social responsibility. Corporate social responsibility at the times was unheard of and businesses sole focus was to make profits for their owners. Anita on the other hand, had a different perspective. Every business is founded, built, managed, and guided by certain principles. Body Shop, was built, managed and guided by the principle of being socially responsible. Anita believed that a company survives due to its customers and therefore, every company ought to pay back to the society by being socially responsible. According to Quarter (2000), Body shop had an agenda of changing the relationship of corporate and the community. Unlike other company’s whose aim was to please shareholders, Anita never cared about Body Shop’s shareholders. Contrary to business practice where shareholders are informed on major investments the company is about to undertake, Anita would had a tendency of making investment decisions based on social issues. For instance, building a factory in a poverty stricken area in an attempt to create jobs. To her, money was not less important to the society’s needs.
The company’s core values were all based on being socially responsible. According to Ryan (2012), body shop is committed to supporting community trade by working with communities that supply its raw materials. All suppliers are required to sign a code of conduct trough their ethical trade programme which aims at improving the conditions for all suppliers and workers and defending their human rights. Additionally, the company is also committed to protecting the environment through initiatives aimed at campaigning against climate changes and saving on energy. The company is also dedicated to defending human rights and opposing animal testing (Ryan, 2012).
Conclusion
The UK must have been very surprised by Anita’s uncommon business methods. Being the 1970’s, it was rare for women to be aggressive and radical. Despite going against the norms, Anita’s success was evident. Her shop expanded to become a multinational company in a highly competitive industry. Anita was a manager who went against what other companies were doing and still managed to succeed. Her commitment to social responsibility paid off despite spending huge sums of company’s funds to improve the well-being of the community and to campaign for other initiatives she believed in such as human rights and opposing animal testing. Even in the 90’s when the world had changed considerably, Anita’s remained dedicated to her social and human rights promotion activities.
Besides her commitment to the society, her business practices were unique and different. She would campaign against some practices that were being done in the beauty industry, which resulted to much criticism. Moreover, her views against marketing were uncommon since the beauty industry spends a huge share of its revenue on marketing yet Body Shop customer base increased despite the company not spending on advertising. This among many other practices is examples of the principles practiced by Anita and the Body Shop worldwide. This reveals that a company can still succeed despite indulging in uncommon practices.
References
Harvard Business School. (1995). The Body Shop International-Case. Retrieved from http://www.hbs.edu/faculty/Pages/item.aspx?num=12304
Johnson, L. (2007). Anita Roddick. Business Europe. Retrieved from http://www.sustainablefinance.co.uk/docs/misc/WSJ_Johnson_Anita%20Roddick_9-13-07.pdf.
Murphy, H. (2008). Social Marketing Communications. Education and Culture. Retrieved from http://www.die-bonn.de/train/english/modules/1/ie_m1_Case_studies.PDF
Ryan, M. (2012). A Case Study in Ethical Marketing: The Body Shop. Europass.
Quarter, J. (2000). Beyond the bottom line: Socially innovative business owners. Westport, Conn: Quorum Books.