The Body Store Table of contents Introduction 2 Section A3 A thorough strategic evaluation of the industry 3 Problem 13 1)The external proper analysis with the Body Shop3 1 . 1 Synopsis in the beauty market: Macroenvironement and trends3 1 ) 2 The competition: immediate industry and competitive environment5 1 )
3The crucial success elements of the natural beauty industry and The Body Shop7 1 . 4) The SW(OT) analysis of The Body Shop8 Question 2: 8 Applicability and success of new CEO Patrick Gournay’s strategies8
SECTION B10 Issue 3: 10 Vision and Mission10 Issue 4: 14 Financial and strategic aims: 11 Question 5: 12 Corporate and business strategies12 Question 615 Balanced scorecard for Your body Shop15 Referrals Introduction The cosmetic industry is one of the biggest industries in the world. The throughout the world annual bills for cosmetic makeup products is estimated at U. S. $18 billion. There is also a strong competition in this market all over the world. To compete and obtain a competitive advantage, corporations have to commit a lot.
They always have to innovate, to purchase advertising campaign to become known and to be successful. The entire body Shop chose to be different, goods are all-natural, it is an honest organisation, associated with environmental friendliness. But how a Body Shop takes part in the cosmetic industry? What are their vision and mission and what ideal directions must be recommended towards the Body Shop in order to conduct successfully through this industry? Section A A comprehensive strategic examination of the market Question one particular
The cosmetic industry is definitely a aggressive and challenging market, in order to be even more competitive also to gain marketplace shares and customer commitment, companies as The Body Store have to figure out their environment. After analysing the exterior environment (major trends in the industry, competition and traveling forces), the main element success elements as well as the ideal issues will probably be evaluate, in order to provide a SWOT analysis. 1) The external strategic analysis of The Physique Shop 1 . 1 Suite of the beauty industry: Macroenvironement and trends
The PEST model in as interesting tool to know and research all the components and styles that affect the beauty market. This environment analysis lets us to understand the strategy of magnificence brands while The Body Store. To identify the value of each components of the industry, it is necessary to evaluate them. Within the last column, U will presents “opportunity however T will represent “threats. Moreover, many will be linked to see the influence of each factor. PESTE version for the entire body Shop |Importance of the rules concerning the starting of new |T 5 | |Political environment (legislation and |products inside the markets: (allergies¦) | | |regulations) | | | | | | | | | | | | |Globalisation (driving force) |T8 | | | | | | |Strong local and foreign competition |T9 | | | | | | |Increase in prices | | | | |T6 | |Economic and international conditions |Increase in the budget certain for beauty | | |(general economical conditions) | |O6 | | |Cosmetic industry: enormous market | | | | | | |Alliance groups inside the cosmetic industry to attract new clients |O8 | | |(driving force) | | | | |O7 | |Societal environement (societal values and |Growth from the free time: importance to take care of the body and |O6 | |lifestyles) |beauty | | | | | | | |Importance of well being | | | | |O8 | | |Importance with the beauty (driving force) | | | | |O8 | | |Be aged stay small | | | | |O8 | | |Ageing of the human population (segmentation of products) (driving force) | | | | |O7 | | |New industry for men (new products.. ) (driving force) | | | | | | | |Companies and buyers have more and more social responsibility |O8 | | | | | | Distinct needs and preferences according to the countries plus the | | | |skin differences |O7 | |Societal environement (societal values and | | | |lifestyles) |Important require variations and fashion effects in terms of |O6 | | |cosmetics | | | | | | | |Growth from the worldwide market of makeup products (driving force) | | | | |O6 | | | | | | | | | | | | | | | |T8 | | | | | | | | | | | | | | | |O7 | | | | | | |Use of internet to buy products (driving force) |O6 | | | | | | Rapid development (waterproof ¦) (driving force) | | | | |T7 | | |Need of strong technological functions | | |Technological environment | | | | |Strong promoting innovation (driving force) |T7 | | | | | | | | | | | |T8 | | | | | | |Respect the surroundings |O10 | | | | | |Environmental factors |Sustainable advancement |O10 | | | | | | |Fair trade |O8 | | | | | | |Bio marketplace and items (driving force) |O9 | | | | | |Environmental aspects |Ecology | | | | |O8 | After that analyse with the trends, elements and driving a car forces from the industry, it truly is interesting to find the place of the competitors in the industry. 1 . 2 the competition: instant industry and competitive environment In order to be familiar with dynamism from the Body Shop, we have to be familiar with competitive framework of the beauty industry.
The “competitive structure of this market and the “critical rules with the game set by the industry can be the result of using the “Porter’s model of competitive forces in the cosmetic industry. The Porter’s model consists by five forces, the nature and talents of the competitive pressures linked to these five forces must be examined power by push to identify the particular competitive pressure which each comprises and to decide if these pressure constitute a very good or fragile competitive force. (Hough, M et ‘s: 2008: 101). It lets us to establish how important the marketplace is to current and potential competition. Avoir ‘s type of competitive pushes in the magnificence market [pic] These makes are explicated in this table: |- Excessive local and international competition | | | | | |- The Body Store has to deal with the direct competition in the domestic and international market segments | | | | | |- Face the many cheaper competitors | | | |Rivalry competition |- Lots of opponents as: superstore, beauty study centers, hair dresser, perfumery ¦ | | | | |HIGH |- Big brands with strong image: Dior, Yves St Laurent, Estee Lauder ¦ | | | | | | | | | | | | | |Rivalry competition | | | | | |HIGH | | | |- Too much brands | | | | | |- Too challenging to obtain a manufacturer image and customer dedication | |Threats of new entrants | | |LOW |- Numerous rules | | |- You will find not really alternatives products yet there are lots of others brands.. | | | | | |- The substitutes products will be: | |Threat of substitute products | | |HIGH |- Cheaper items, no term brands | | | | |- Products examined on pets | | | | | |- Non natural products | | | | | |- Imitative products | | | | |Bargaining power of suppliers |Their affects are not too big | |MEDIUM | | | |- High expectation in terms of top quality and solutions | |Bargaining power of purchasers | | |HIGH |- New generation with net, buyers can compare prices | After this analysis, we could follow with all the key achievement factors in the Body Store. 1 . 3the key achievement factors with the beauty market and The Physique Shop “Key success elements are the items attributes, competencies, competitive functions, and industry achievements while using greatest effect on future competitive success in the market. (Hough, J ain al: 08: 97) In order to succeed and be competitive, Your body Shop must manage crucial success factors. So we can say that cosmetic makeup products brands have got: , To get innovative and also to propose new items , To obtain global division capabilities To have strong web commerce capabilities (friendly website¦) and the possibility to get online goods , To have excellent and famous branding image: clients could identify them to the brand and its beliefs. , To become different , To maintain high level of quality and providers in order to improve customer satisfaction and loyalty In the next part, we can realise a SWOT research to evaluate if The Body Store meets these kinds of key accomplishment factors. 1 ) 4) The SW (OT) analysis of The Body Store The SWOT analysis provides an overview of the firm’s situation and it is an integral part of creating a strategy securely matched for the company’s condition. (Hough, J et approach: 2008: 138).
The SWOT analysis is composed by the power, weaknesses, chances and hazards. We have already done the opportunities and threats inside the macroenvironment examination that is why all of us just examine here the strengths and weaknesses of The Physique Shop (internal environment). | | | |STRENGHTS |WEAKNESSES | | | | |Global business Lack of new items | | | | |Ethical organization |To slow to acquire new market share | | | | |High social responsibility |Stores too outdated, need a fresh design | | | | |Respect of human rights |Unpopularity of the Physique Shop inside the city and the business | | |community | |Present all over the world (in 47 countries) | | | |Lack of enthusiasm | |Anti animal tests practices | | | |Failure in several countries: former mate France, USA.. |Good production and from suppliers | | | |Big problems with franchises | |Reorganisation to the firm to a management group | | | |Lack of adaptation towards the needs and preferences of overseas marketplaces | |Importance of the environmental friendliness |(ex: USA) | | | | |Strong corporate traditions in the company ( participation of the employees in |Not a strong store | |the campaigns) | | |Important financial deficits | |Products naturally made | | | |Products and concepts conveniently imitated | |Uniqueness of the products in term of its the labels | | | |Too much importance in starting environmental jobs and as well less| |Strong identity |in running business | | | | |Different suppliers from diverse ethnics and groups |Followers in cutting prices | | | | |A.
Roddick: ethical and solid leader |Prices more expensive compared to the other rivals | | | | |Importance of staff selection |Lack of advertising | Question 2 Applicability and effectiveness of new CEO Meat Gournay’s approaches P. Gournay was a business man with experiences. This individual wanted to build a new strategy for The Body Shop in order to be an exclusive brand, different to the others. This tactic was focus on different level: , Become faster to launch new items (less than one year). , Upgrade the stores to satisfy the customers also to improve the brand’ image. , Cut the quantity of products by 25%, to be focus on “heritage products. , Acquisition with Cosmo Trading for? several million to have more control on European operations , Restructuration New releases with a solid Body Shop’ identity: Hemp, differentiated products , New leadership , Reclarify the mission and vision with the company: be considered a strong retailer , Outsource manufacturing and locate manufacturing lovers in every single region , Cut supervision costs , Decentralization in 4 key regions , Focus on client satisfaction Even if a few problems were still within UK and USA, and if some times were even more critical delete word as Xmas for example , the P. Gournay’s 2000 strategy was a fresh life intended for The Body Shop. After a few mistakes due to bad alternatives and an absence of experience in the cosmetic industry P. Gournay planed a true revolution in The Body Shop organisation.
In a reaction to this revolution, profits flower by? 9 million to? 271 million compared with a similar period in 1999 and most of his objectives were obtained. These elements demonstrate a very good execution of his strategy. It is usually easier to prepare a strategy however the implementation from it relieve to strong efforts in leadership and management. The efficiency changes frankly the restructuration as well as the decentralization of the organization were very good strategic changes. It permits to share the responsibilities and to involve more employees in this fresh strategy. G. Gourmay can be described as strong head, he had the capability to believe in The Body Shop upcoming and to end up being fast to react.
That understood the needs of the markets in creating new items as well as fresh services since home offering. He as well wanted to become more customer oriented, improving the manufacturer image due to redesign of the shops and developing marketing tools because customer commitment program in UK. Even if his lack of encounter in the beauty industry was claimed, he was able to redouble the company to be a strong merchant. The outcomes of his strategy had been done by better profits, discuss value and sales. Gourmay looks to be a good communicant, he discussed numerous moments his alternatives and the aim of his strategy, this step is important to create a strategy-supportive culture.
The applicability and effectiveness of his technique have been identified by analysts, by business community but likewise by every one of the company. Section B Question 3 Vision and Objective ¢ A mission affirmation focuses on current business activities , “who we are and what we do The Body Store is a global business, depending on ethics, his products will be known and famous for their very own naturally also because they are not really tested on animals. The Body Shop is usually an organization with strong beliefs and personality. The Body Shop was one of the first organization is targeted on social responsibility and reasonable trade. The Body Shop gives natural cosmetic makeup products and personal care products. They have providers as home selling and massages inside their shops.
With ageing of population and the importance of well-being nowadays, clients have good expectations with regards to quality and excellence. The sustainable creation is a recent value within our society and customers anticipate companies because The Body Shop to respect it. The entire body Shop is a good retailer, it has manufacturing lovers in every single of his four area area. This organization has the ability to create fresh 100% natural products and to be involved in social causes. ¢ A strategic eye-sight concerns a firm’s foreseeable future business way , “where we are going The Body Store should gain market share and extend his leadership position in the beauty industry globally. They should be more famous and extend their very own brand consciousness all over the world.
The entire body Shop follows with his moral values and develop new products and solutions in order to be more competitive. Put simply, The Body Shop has to generate new opportunities to leverage their very own brand worldwide. To achieve these goals, Your body Shop needs to pursue and to improve the wider corporate goals of successful growth and continuous improvement. The Body Store should: , Achieve world-class performance by simply attaining a powerful competitive placement in focus on markets. , Exceed buyer expectations intended for quality and value. , Earn around the cost of capital over a organization cycle. These ingredients can be achieving thanks to: , The recognized brand The heritage of integrity and teamwork. , The advanced skills , The special relationships which have long been around between the organization and the employees, customers, retailers and other organization partners around the globe The Body Store has to pursue his all-natural products primarily based more upon well being than beauty. They must follow their particular politics about ethics and fair control and stay oriented by the environmental friendliness. The Body Store has to be give attention to customer satisfaction. The management needs to be more earnings oriented and become more hostile in order to endure. ¢ Types of organization, the body store should be in: The Body Shop should open up his retailers to new customers.
Nowadays there is also a new industry with males and old people. They need to segment many and adapt them to new consumers’ demands and targets. They also should certainly create and develop a friendly website exactly where customers can see all their range of products and purchase them on-line. Question 5: Financial and strategic targets: Financial objectives: Outcomes focused on improving economical performance? Achieve revenue regarding 10% each year This aim is important in fact it is achievable. Without a doubt, thanks to L. Gourmay they have reached incredibly good performances in term of earnings and product sales. This goal will be the implications of the new strategy setup.
It also is definitely the results of a better client satisfaction and brand awareness. This objective can be reach as a result of an internal growth as I said before but also thanks to an external growth. It can be interesting for The Body Store to realize forces with big actors in the cosmetic sector.? Increase net profit margins via 2% to 4% As we can see in your body Shop circumstance, that during Christmas period they have interesting margins. This kind of objective could possibly be the results of scale economies, and costs reductions. Strategic objectives, Outcomes focused on enhancing long-term, competitive business situation. Different strategic objectives could be developed:? Have more attractive items than competitors Be more concentrate on customer satisfaction? Gain customer dedication? be more progressive? Gain acknowledgement as a head in normal products We will focus on 2 main goals:? be more focus on customer satisfaction This element is key point to guarantee the future of the Body Shop, they must be more customer oriented, to understand their needs and expectations. If perhaps customers happen to be satisfied and feel regarded, they will be naturally more devoted. As we know, a loyal consumer is cheaper than a new buyer. Different equipment will be created in the new strategy in order to reach this kind of objective. Moreover, The Body Store will have a brand new strategy to attain new customers. Gain recognition like a leader in natural products The key competency from the Body Shop is his capacity to create natural goods. To gain business, they should utilize this element and work on it in order to be understand as a innovator in the normal cosmetics industry. This factor will give to the Body Store an excellent and famous marketing image. Your body Shop may have an image of “specific corporations, with solid skills and know-how. Query 5 Business and business strategies To be able to reach the financial and strategic objectives gave above, The Body Store has to understand some activities to be more and more competitive throughout the five next years: The Body Shop must follow his strategy of differentiation by launching normal Products with elements via all over the world. “The essence of a broad differentiation strategy will be unique in ways that are useful to a wide range of customers. (Hough, L et approach: 2008: 152) To be quite effective, The Body Store has to study consumers ‘needs and behaviors to understand the actual consider crucial, what they think has value and what exactly they are willing to pay pertaining to. This customers study may help them to make new products and services properly adapted to consumers’ anticipations. It they will follow this tactic and tried to be totally different, the consumers will accept to paid the will be able to determine them to the brand.
This strategy needs also to have a strong business culture based on innovation, a persons resources have got a strategic role, they have to generate creative workers. The employees have also to be competed in order to end up being innovative and creative. , Have a bigger brand recognition is necessary for the Body Store. That is why they should invest more in marketing. They already have a powerful identity however they have to diffuse it because of new mass media opportunities. The communication is an important element, even more advertising campaign is going to add worth and maximize brand recognition. A powerful community advertising campaign will probably be interesting. As the Body Shop is a company with good values and politics, they must realise a different campaign while “Benetton has been doing few years in the past.
In this advertising campaign, they have to be different and to communicate about their natural products, in other words their certain skills, their high quality and excellence. The campaign would have been a “paper plan or a TV SET one, in case the budget enables these expenditures. , As I said before, Your body Shop needs to be customer focused. They should appreciate a friendly site where clients will be able to discover their selection and providers and exactly where they would manage to buy online items. It will permit to buyers to have great references and to be easily located on the world wide web. The web site will lets to the corporation to be more appealing and to entice a maximum of internet surfers. The organization will need to develop his customer dedication programs worldwide. People like to be thoughtful as a specific customer and expect to have a “specific treatment. The loyalty card stimulates consumers to get loyal in order to receive shows and special offers. , Additionally, they could extend their providers: Selling in the home should be recommended in numerous countries. Customers like being the primary interest from the companies. With this service they experience caring and possess the feeling to obtain customized providers. We have also seen that additional providers as massage therapy have raise the sales. Persons after creating a nice moment want to buy the products used during this time.
The Body Shop should recommend services since sauna and hammam such as. , Your body Shop should never stay a niche market. The brand new trends and lifestyles provide them with big chances. They should appreciate a segmentation of their goods that is to say they must have particular products for guys and older people such as. They have to improve and to adjust them to all of the changes. , The entire body Shop has already been a global firm but they needs to be present in additional market while India, a great emerging marketplace. The beauty is an important value on this country, plus the Indian splendor is known worldwide thanks to L’Oreal’s muse. This new market may ensure new sales and market stocks and shares, it is a new opportunity. Your body Shop should certainly adopt a more aggressive approach, the competition must not be underestimating. The organization has to be even more profit oriented. To reach their objectives, they can realise a lot of alliance which has a big manufacturer as L’Oreal. Indeed, this alliance is going to permit them to shares their resources and capabilities in technology and innovation such as. It will help those to realise new items. , The creation of new products will also be strategic elements in specific period because Christmas. The entire body Shop will need to realise limited products to provide exclusivity for some customers. With specific product selection for this particular period, Your body Shop will be better his differentiation.
All these changes require strong involvement with the management and employees, Your body Shop should be more reactive, and they need to adapt them of their environment: lifestyles and so forth As Gourmay done, the organization has to modify its structure when it is certainly not adapted in order to be profitable and promote advancement in the company. The traditions has to be supportive and be oriented on differentiation and creativeness. The resources are essential to invest with an advertising campaign for instance , but these promoting tools can result in an increase on sales, market share and profitability. The company needs to think regionally and throughout the world in order to be present in new market as growing market.
The control is a crucial step, it is vital to evaluate the actions carried out and to learn from the mistakes. The evaluation permits to experience a continuous improvement, The Body Store should be even more control oriented. Question six Balanced scorecard for Your body Shop |THE BODY SHOP | |HEAD OFFICE | |MAIN TARGET: | |Increase their business all over the world, become a leader in natural products and have a better brand understanding | MONETARY |CUSTOMERS |INTERNAL |LEARNING AND GROWTH | | | | | | |- Refocus on retailing |- Increase their pleasure |- Reinvention of The Body system Shop |- Training of employees to be | | | |brand |more creative and innovative | |- New marketplace shares: |- New products and services | | | |Selling in new marketplace: India |(massages.. |- New structure |-Profiling the staff | | | | | | |- Revenue regarding 10% per year |- Better adaptation with each |- Fresh strategy, ideas and |- New personnel: recruitment | | |countries’ needs and preferences |leadership | | | | | |- Innovative tradition | |- Increase in the share selling price |- Better communication |- Products collection and division | | | | |channels rationalized | | |- Providing new products |- Customer preservation | | | | | |- Decentralization of the | | |-Selling to new buyers |-Customer acquisition |management | | | | | | | |- Cha?non with cosmetic makeup products |- Upgrade the stores, better |- Fresh values: top quality and | | |companies: L’OREAL for example |brand photo |excellence | | | | | | | | |- More consumer information |- Regulatory control | | | | | | | | |- Even more prominently |- Be a very good corporate citizen | | | | | | | | |- More loyalty programs | | | Referrals , Hought, J. Arthur, A. Thompson, Jr. Strickland III, A. J , Gambie, T. E. 2008. Crafting and Executing Strategy. McGraw Slope International Model. , Piercy, N. Your body Shop. An instance for burial or growing from the severe? , The entire body Shop principles report. 2007.
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