Business and Environment Body Shop 2005

EXECUTIVE SUMMARY.

Our report was based on The Body Shop International, which is a PLC operating on a worldwide scale. We chose to carry out this report on The Body Shop as it has a very interesting background; it was founded as a natural soap and lotions company whose cornerstone was to operate as a model of social responsibility with ethics in business. However, The Body Shop has since been exposed to negative press surrounding the controversial business ethics on which this 'green' company is based. Therefore it was interesting to analyse the effects the external environment has on The Body Shop and how the company and the owner, Anita Roddick respond to and deal with these pressures.

The report analyses the external pressures on The Body Shop and how the company has chose to deal with these different issues. The report finds that political, economical, competitive, ecological and socio-cultural analysis can be used to analyse these external pressures. We did not include technological analysis in our study as it was very difficult to access this information and it has little impact on our firm. However, to carry out a more in depth analysis we also used SWOT analysis, which is a measure of the strengths, weaknesses, opportunities and threats of the business, in order to see how the external pressures influence the business and how they can react to them.

The report concludes that The Body Shop is facing several challenges from the external environment.

CONTENTS PAGE.

Page Number:

Executive summary 1

Introduction 3

Background of the company 4

PEST analysis:

Political Environment, 5

Economic Environment, 6-8

Ecological Environment, 9-12

Socio-Cultural Environment. 13-14

SWOT analysis:

Strengths, 15

Weaknesses, 16

Opportunities, 17 Threats. 18-19

Conclusion. 20

References: 21-22

Individual Contributions: 22

INTRODUCTION.

The company we have chosen to do our report on is The Body Shop. The Body Shop is a very unique and interesting company as it is famous for creating a niche market sector. This keeps The Body Shop ahead of their competition since they started in 1976. The Body Shop is now operating in 50 countries making it an international company and has been voted the second most trusted brand in the UK. We hope that the readers of our report will gain more knowledge of The Body Shop as a company and also the work they do around the world.

Background to the company

Established on 26 March 1976 by Anita Roddick, the founder of The Body Shop, the Body Shop set out to provide an environmentally-friendly, feel-good business with products ranging from body and beauty to hair and gifts. Now famous for creating a niche market sector for naturally inspired skin and hair care products, the body shop now has over 1,900 outlets operating in 50 countries. The products sold in the outlets are made of natural ingredients from across the world, encouraging global and local trade.

As well as its famous "Against Animal Testing" campaign, The Body Shop also supports community trade, helps promote self-esteem, supports human rights organisations, and plays an important role in promoting environmentally friendly messages throughout the world.

Famous for creating a niche market sector for naturally inspired skin and hair care products, The Body Shop introduced a generation of consumers to the benefits of a wide range of best sellers from Vitamin E Moisture Cream to the Tea Tree Oil range and Banana Shampoo. In 1999 The Body Shop brand was voted the second most trusted brand in the UK by the Consumers Association.

According to the 1997 Interbrand survey criteria, the company was named 28th top brand in the world, second in the retail sector. In a 1998 report, a survey of international chief executives in The Financial Times ranked The Body Shop the 27th most respected company in the world.

The world-famous logo

PEST ANALYSIS

Political Environment:

The Body Shop has taken a positive political stance against animal testing, defending human rights, supporting community trade and the protection of our planet. According to the values web page, "The Body Shop is against animal testing on cosmetic products and ingredients. We do not test our products or ingredients on animals. Nor do we commission others to do so. We never have and never will." The Body Shop encourages action to be taken to stop animals being used in the testing of cosmetic products and ingredients. They support the use of alternative testing and inform the public and campaign to ban testing on animals. They have a strict purchasing rule which states "we don't use any ingredient that has been animal tested for cosmetic purposes by our supplier since 31 December 1990." Every product label used by The Body Shop emphasises that they are Against Animal Testing (AAT). "The AAT policy and the animal compliance checks we run involving all our suppliers are also subject to independent review." According to their web site "The Body Shop community trade programme started in the 1980's. Now it is making a world of difference for some 25 countries, it is now purchasing around Ј5 million worth of natural ingredients and accessory items through the Community Trade programme."

According to the 25 April 2000 Directors' Report, the Body Shop encourages the involvement of all its employees and do not discriminate against groups of