The Bodyshop - An Analysis of the Company´s Actions towards Sustainability


Seminar Paper, 2011
28 Pages

Excerpt

Contents

List of figures

List of tables

List of abbreviations

Introduction

Part A: Analysis of context
I. PESTEL Analysis
a) Political
b) Economic
c) Sociocultural
d) Technological
e) Environmental
f) Legal
II. Key drivers
a) Internal
b) External

Part B: Sustainable Aspects

Part C: Benchmarking

Part D: Analysis
I. Sustainability Mapping Framework
II. The Biophysical Environment
III. AUDIO Analysis
a) Deforestation
b) Waste Management
IV. The Triple Bottom Line
a) Economic
b) Environmental
c) Social

Recommendations

Conclusion

List of references

List of figures

Figure 1 The Body Shop's founder: Dame Anita Roddick

Figure 2 Value statement of The Body Shop

Figure 3 Commitments of The Body Shop

Figure 4 Diagram illustration donations made through the 'Bag of Life' sales 2007 - 2008

Figure 5 Map of L'Oreal's organizational division

Figure 6 Data based on L'Oreal's financial annual report and analysis of the commitment towards sustainability

Figure 7 The Biophysical Environment

Figure 8 The Triple Bottom line

List of tables

Table 1 Some of the most significant awards The Body Shop has been awarded

Table 2 Comparison of The Body Shop, Lush, and Aveda and their involvement in several issues of sustainability

Table 3 AUDIO Analysis

Table 4 The Body Shop's ways to reduce waste and its environmental impact

Table 5 Triple Bottom Line

List of abbreviations

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Introduction

The first store of The Body Shop opened on 26th March 1976 in Brighton, England. Today the company has more than 2,500 stores situated in over 60 countries around the world. In order to enter new markets the company mainly uses franchising to open stores in new business environments. (L'Oreal, 2011, p.69) Since 2006 The Body Shop has been a part of the cosmetics company L'Oreal, where The Body Shop continues to operate as a distinctive entity to ensure ethical independence. (The Body Shop, 2009, p.5) According to L'Oreal's annual report, The Body Shop generated a profit of 65M€ (£57M) in 2010 and has a current profitability of 8.7%. (L'Oreal, 2011, p.71)

The company is heavily associated with its founder, Anita Roddick, who was a Human Rights Activist and believed that "The business of business should not just be about money, it should be about responsibility. It should be about public good, not private greed." (The Body Shop, 2011)

The company operates in the beauty sector, selling cosmetics that are based on natural ingredients. (Jones, 1998, p. 127) Thus, it positions itself as a niche player on the beauty market. Since opening, The Body Shop has been known for its policy against animal testing. (Van de Ven, Nijhof and Jeurissen, 2009,p.59) In the past decades the company's values have expanded and now address several other issues of sustainability. The Body Shop's values are to be against animal testing, to support community Fair Trade, to activate self esteem, to defend human rights, and to protect our planet. (The Body Shop, 2011)

According to Dunphy and Benveniste (2000, pp.5) sustainability is divided into two aspects, the ecological and the human sustainability.

"By ecological sustainability we are referring to redesigning organizations to contribute to sustainable economic development and the protection and renewal of the biosphere. By human sustainability we are referring to building human capability and skills for sustainable high level organizational performance and for community and societal well-being."

Clayton and Radcliffe (1996, pp.6) further emphasize that the "transition to a sustainable way of life means taking steps to try to reduce the risk that environmental and related problems will seriously affect or jeopardize the human species at some future time, and thereby of a worthwhile existence."

In this paper The Body Shop's commitment to sustainability will be analysed using appropriate frameworks to critically examine what the company does in order to promote ecological and human sustainability.

Part A: Analysis of context

I. PESTEL Analysis

The Body Shop is exposed to a large amount of influences in its environment. In the following part the PESTLE Analysis will be carried out in order to determine the impact of political, economic, sociocultural, technological, environmental, and legal issues on the business' operations.

a) Political

For multinational companies, the political stability and safety of the countries they work in are highly relevant. Political threats can even be more relevant when they concern a region with which The Body Shop is connected through Fair Trade. Political unrest or terrorism in a trading country can even cause the trade relationship to break up. Moreover, trade regulations by political institutions can influence the trade relationships of the company. (Nicholls and Opal, 2005, p.22)

b) Economic

The exchange rate plays an important role for multinational companies that have suppliers all around the world. The revenues the company generates in stores outside the euro zone need to be exchanged for euro and the many communities that supply ingredients for the cosmetics are paid in their national currency. Consequently, the exchange rate has a great influence on the company's revenues.

c) Sociocultural

Lifestyle changes like the increasing awareness of environmental and social issues are influencing consumers because they become more conscious about the companies they
purchase products from. (Johnson and Scholes, 2002, p.100; Banerjee, 2004, p.157) Policies such as sourcing products and ingredients through Fair Trade or a company's commitment to sustainability can be the crucial factor for a consumer to choose a particular company. (Nicholls and Opal, 2005, p. 23 & 56 & 189)

d) Technological

The increased availability of the internet also has an impact on the business because of the rise of transparency the customers have. Moreover, it facilitates the communication among the different locations of a company and especially to the Fair Trade communities the company trades with.

e) Environmental

Environmental protection laws are passed because of the growing concern about the earth's flora and fauna.

"In 1998, in a historic triumph for the animal protection community, the government (UK) announced it would no longer issue licences to test cosmetic products or ingredients on animals." (Animal Aid, 2011)

Moreover, the consumption of energy is influential to a company because of the rising costs and also because of restrictions about the allowed energy use.

Environmental catastrophes in Fair Trade communities or for example draughts resulting from climate change can influence the suppliers. (The Body Shop, 2009, p.21)

f) Legal

The growing concern about health is likely to trigger new laws and regulations for health and safety standards as well as product safety. (Banerjee, 2004, p.160) Among one of these laws was the prohibition of refilling bottles and jars for cosmetic purposes. (The Body Shop, 2009, p. 38)

II. Key drivers

a) Internal

The main internal driver for the way The Body Shop deals with the issue of sustainability is the company's founder and top leader, Anita Roddick. She was a very spiritual person and a Human Rights Activist and personally heavily involved in social and environmental responsibility.

"I just want The Body Shop to be the best, most breathlessly exciting company - and one that changes the way business is carried out. That is my vision." Anita Roddick (The Body Shop, 2011)

According to Van de Ven, Nijhof and Jeurissen (2009,p.70) the success of The Body Shop can be ascribed to Anita Roddick's ideals. These attracted a certain costumer group that was looking for cosmetic products that were sources and produced socially and environmentally responsible. Until her death in 2007 she remained an active member on the board of directors of The Body Shop and thus influenced and inspired the company in terms of responsibility.

"Top management within The Body Shop are already committed to moving toward sustainability, defined in its most holistic sense - actively endeavoring to fulfill what they see as their long-term financial, environmental, and social responsibility." (Jones, 1998, p.127)

b) External

The Body Shop's main external driver to do business responsibly is the public, especially the stakeholders' concern about social and environmental issues. (Savitz and Weber, 2006, p.32)

"Stakeholders i.e. investors, suppliers, trade unions, employees or the management of a company see the development and future chances in the green sector. With a green business policy the company can be more attractive to stakeholders." (Guhr, 2007, p.13)

Part B: Sustainable Aspects

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The Body Shop communicates its core values into five aspects and it uses them as a decision making guide to ensure that all decisions are conform to the company's principles. (The Body Shop, 2009, p.10)

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Figure 3 Commitments of The Body Shop (2011)

These commitments are all practical approaches to ensure the company's values are considered. For example by the commitment to responsible sourcing The Body Shop sets itself targets such as visiting their Community Trade suppliers at least every 2 years which fulfills their value to support community trade. Another commitment to responsible sourcing is to make all soaps from RSPO certified palm oil by the end of 2008 which represents their value of protecting the planet.

In 2007 The Body Shop in cooperation with their supplier in India launched t he 'Bag for Life' which is a bag out of organic cotton and a part of the profits are donated to the charity 'Children on the edge' which promotes children's right around the world.

The work The Body Shop puts towards protecting the environment has been recognised by United Nations Environmental Programme. The company's Values Report has been ranked highest among other International Corporate Environmental Reports twice already.

Moreover, The Body Shop's values and contribution towards sustainability have frequently been awarded.

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Table 1 Some of the most significant awards The Body Shop has been awarded (source: author)

These awards stand for only some of the company's activities and The Body Shop campaigns heavily to raise awareness of social or environmental concerns. Currently, they run a campaign against sex trafficking of children and young people. With this campaign they aim at raising awareness of the problem and furthermore by selling the 'Soft Hands Kind Heart Hand Cream' they raise funds for affected children and young people. More of their current campaigns are for stopping violence at home and another one to stop HIV. The Body Shop has a long history of campaigns starting in 1985 when it first became a public company. (The Body Shop, 2011)

Moreover, in 1990 The Body Shop founded its own charity called The Body Shop Foundation. The charity's main focus is enabling organisations that work in the areas of human and civil rights, environmental and animal protection to operate through financial support. (The Body Shop, 2009, p.5)

Part C: Benchmarking

The Body Shop is known for being the pioneer on the green cosmetics market and it gained a lot of publicity with its social commitment. (Van de Ven, Nijhof and Jeurissen, 2009, p.59)

"Starting the business of The Body Shop in 1976 was a competitive advantage. Until the response of competitors the company was able to convince consumers of their products, so that The Body Shop is still one of the biggest retailers in the natural cosmetics sector." (Guhr, 2007, p.13)

However, in the meantime the competition on the market of natural cosmetics has risen and more companies turn towards social and environmental sustainability. (Doherty, et al., 2009, p.3) In order for The Body Shop to remain strong in their industry it has to use its strong brand personality and revolutionize itself. (Clayton, 2003)

"Boots, Lush and others have all now started to do what it used to be renowned for. In these post-'No Logo' times, they need to get back to being more proactive, more radical and more edgy." (Clayton, 2003)

The comparison of The Body Shop to its competitors is a complex approach, as the aspects the company stands for are diversified. In the following table some issues of sustainability related to businesses in the beauty industry are named and The Body Shop's involvement towards them is compared with two of its competitors in the sector of natural cosmetics, namely Lush and Aveda.

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Details

Title
The Bodyshop - An Analysis of the Company´s Actions towards Sustainability
College
Anglia Ruskin University
Author
Year
2011
Pages
28
Catalog Number
V187767
ISBN (eBook)
9783656115588
ISBN (Book)
9783656117117
File size
1857 KB
Language
English
Series
Aus der Reihe: e-fellows.net stipendiaten-wissen
Tags
Bodyshop, Lush, benchmark, pestel analysis, key drivers, sustainability, mapping framework, audio analysis, triple bottom line
Quote paper
Katja Assenmacher (Author), 2011, The Bodyshop - An Analysis of the Company´s Actions towards Sustainability, Munich, GRIN Verlag, https://www.grin.com/document/187767

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