The Body Shop

"The Body Shop"

Introduction.

The Body Shop International is a cosmetic and skin-care company dedicated to producing products based on natural ingredients. The products are directed towards women who look to take care of their skin and beauty and who are socially conscious.

Anita Roddick, the founder and co-chair of the board of directors was charged with adapting to new conditions in the U.S. marketplace.

The company was facing several challenges and receiving greater pressure to resolve such issues as:

* The U.S. market is large and relies on the use of intensive publicity; however, The Body Shop's policy is not to advertise.

* Discrepancies between the organizational and cultural values of the company with those of the U.S. market.

* Absolute dependency of the company on its two founders, Anita and Gordon.

* Shareholder concerns over use of tax exemptions towards some of the interests of the founder and director of The Body Shop.

Relevant points:

* The body shop does not use publicity

* The body shop to avoid the traditional channels of distribution

* The body shop to spend the minimum on packaging

* The body shop to use the labels of products to describe the ingredients instead of promising miracles

* The atmosphere of its stores as far as the organization and arrangement of its products, to be equal in any location in the world, as well as the knowledge of products on the part of the staff and the treatment towards clients,

* The structure of its staff where 75% are women below the age of 30

Competence and Strategy

* The principal strategy that the body Shop had used to differentiate itself from the competition was by means of their socially responsible philosophy of social change and action (natural ingredients, not testing on animals, etc).

About the financial information

The price of the stock had declined some years and had relatively high volatility. This could be due to the market's perception that The Body Shop's profitability was hindered by the company's social approach rather than its focus on earnings growth.

Another point to consider in the U.S. market is that Ms. Roddick did not consider the negative effects that the commercialization of its products could have on its image and values. Up to this point, she felt that the values spoke for themselves, no matter how many stores they had nor in what location across the globe. However, The Body Shop failed to maintain its brand image, becoming something of a mass-market line versus an exclusive, socially-conscious company.

Additionally, the store layout was not optimized for each location. Store schemes were standardized and not based on market research or retail strategies.

Also, The Body Shop needs to consider paying less in dividends and use some of those funds for promotion, allowing for greater growth in new countries and deeper impact.

As far as the level of reported income from 1984 to 1991, we can observe that they have had strong growth in both income and earnings. In addition, the distribution of dividends to shareholders has gone up year over