HBR Case Study: The Body Shop International

1
HBR Case Study The Body Shop International

• Case Facilitation
• Janssen Anderson
• Staci Brandt
• Heather Gunther
• Jonathan May
• Michele Moore
• Debbie Nguyen
• Business people have got to be the instigators
  of change. They have the money and the power to
  make a difference. A company that makes a profit
  from society has a responsibility to return
  something to that society.
• Anita Roddick, Founder of The Body Shop

2
Agenda

• Building The Body Shop
• Janssen Anderson
• II. The Brains Behind The Body Shop
• Heather Gunther
• III. The Body Shop Best Practices
• Staci Brandt
• The Body Shop Balance
• Jonathan May
• V. The Real Beauty Behind the Body Shop
• Michele Moore
• VI. The Body Shop Now
• Debbie Nguyen

3
Building The Body Shop

• Janssen Anderson

4
Brief History

• The first store was started in 1976 by Anita
  Roddick in Brighton, England
• Franchises were granted in 1977 and the first
  overseas franchise opened in Brussels in 1978
• The Body Shop saw considerable growth in the
  1980s and shops were opening at a rate of two
  per month
• 1985 -The Body Shop went public on the UK
  unlisted securities market
• Anita is selected with as the Veuve Cliquot
• Business Women of the Year

5
Brief History cont

• Became officially involved with Greenpeace and in
  1986 The Body Shop created an Environmental
  Projects Department with Save the Whales as
  its first official campaign
• 1987 Friends of the Earth campaign was launched
• 1988 Anita Roddick is awarded the Order of the
  British Empire by the Queen of England
• Opens first store in the US in NY
• 1990 The Body Shop Foundation was
• Established which funds human rights and
  environmental protection groups

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Brief History cont

• 1990 AGAINST ANIMAL TESTING campaign is launched
• First shop opens in Tokyo
• 1991 has 586 stores in 38 different countries
• 2001 opens first shop in South Africa
• 2003 Anita is appointed as a Dame of the British
  Empire
• New stores opened in Estonia and Turkey
• 2005 The Body Shop comes to Jordan and Russia
• 2006 The Body Shop turned 30 and is acquired by
  LOreal
• Today The Body Shop has over 2,000 stores in 54
  countries and has over 1,200 products

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Competitors

• Bath and Body Works
• Origins
• Burts Bees
• Aveda
• What others can you think of?

8

• How has the Body Shop been so successful while
  defying industry norms?
• What are important components of the success of
  the Body Shop?

9
Leadership

• Anita Roddick-ethical
• leader
• VISION
• COMMITMENT
• PHILANTHROPY

10
Products

• Natural ingredients (honestly!)
• We wanted to be honest about the products we
  sold and the benefits we promised. We wanted to
  go in the opposite direction than the rest of the
  cosmetics industry. I would give that advice to
  anyone Focus on what the competition doesnt
  have and promote that. -Anita Roddick
• No animal testing
• Fair trade

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Employees/Environment

• Passionate
• Simple
• Fun
• Knowledgable
• Commited

12
The Brains Behind The Body ShopHeather Gunther
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Brains Behind The Body Shop Anita Roddick

• Parents were entrepreneurs
• Trained in education
• Library researcher in Paris
• Geneva to work with Womens Rights issues
• Traveled throughout South Pacific and Africa

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Brains Behind The Body Shop Anita Roddick

• Entrepreneurial Mindset video

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Brains Behind The Body Shop Anita Roddick

• How important are Anita Roddicks
• qualities to her management style?

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Brains Behind The Body Shop Anita Roddick

• What are some interesting decisions that Anita
  Roddick made as a manager?

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Brains Behind The Body Shop Anita Roddick

• How would you evaluate how Anita Roddick makes
  decisions as a manager?
• How did Anita Roddick deal with the following
  characteristics of managerial decision making?
• Risk
• Uncertainty
• Conflict
• Lack of Structure

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Brains Behind The Body Shop Anita Roddick

• How important was Anita Roddicks role in ongoing
  management?
• Decisions that she made
• Interviews with franchisees

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Brains Behind The Body Shop Anita Roddick

• What would be some of the pros and cons of
  working as a franchisee under Anita Roddick?
• How might management decision making change as a
  result of management succession?

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The Body Shop Best Practices

• Staci Brandt

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The Body Shop Best Practices

• As she built her business, Roddick developed
  most of The Body Shops unique operating
  practices and management policies to respond to
  opportunities she perceived. From product
  development to human resource management, The
  Body Shop has been described as innovative,
  daring, and even radical. But there is no
  question it was successful.
• (HBR p. 4)

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The Body Shop Best Practices

• What were some unique managerial
• decisions that allowed The Body Shop to
• achieve some of its greatest best practices,
• practices that differentiated them from others in
  the cosmetic industry?

23
The Body Shop Best Practices

• What are some unique managerial
• decisions in regard to
• Pricing
• Franchising
• Product Development and Production
• Marketing and Advertising
• Organization and Human Resources

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The Body Shop Best Practices

• Pricing
• Products were priced more expensively than mass
  merchandised cosmetics, but well under exclusive
  department store lines (HBR p. 3)
• Sales
• ..made no elaborate claims or promotions. And
  the products still packaged in plain plastic
  bottles were never sale priced.

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The Body Shop Best Practices

• Franchising
• Global Franchising
• By appointing a head franchisee in each major
  national market,
• Roddick was able to concentrate on the
  development of new product
• lines and the companys global vision, rather
  than worry about the
• complexities of administration or personnel
  management (HBR p. 4).
• Selection of Franchisees
• openly acknowledged a preference for women as
  franchisees Calling it The Body Shops secret
  ingredient
• Management of Franchises
• Roddick kept strict control over the
  franchising process
• Her objective was to ensure that The Body Shop
  image and the principles it was based on, were
  not diluted through franchising

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The Body Shop Best Practices

• Product Development and Production
• Initially, product development had been derived
  by samples brought back in Anitas back pack, and
  the creativity of the herbalist she had worked
  with since the startup (HBR p. 5).
• Although over 70 of They Body Shop products
  were supplied by outside contractors, the company
  hoped to increase its in-house manufacturing from
  30 to 50 by the early 1990s.

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The Body Shop Best Practices

• Marketing and Advertising
• Advertising
• Noticeably lacking, for a cosmetics retail
  company, were any photographs of models with
  beautiful hair and perfect skin (HBR p. 3)
• Roddick was fond of saying that her concept of
  beauty was Mother Theresa not some bimbo (HBR
  p.3)
• Marketing
• As a cosmetic retailer, The Body Shop defied
  most accepted marketing practices. In an
  industry where 30 cents on every dollar of sales
  was typically devoted to advertising, the company
  had no marketing or advertising department.

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The Body Shop Best Practices

• Organization and Human Resources
• Most businesses focus all the time on profits,
  profits, profitsI have to say I think that is
  deeply boring. I want to create an electricity
  and passion that bonds people to the company
  (HBR p. 6).

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The Body Shop Best Practices

• What lessons can be learned from
• The Body Shop as a corporation and from Anita
  with respect to managerial decision making?

30
The Body Shop Best Practices

• What are some lessons that can be
• learned from The Body Shop successes?

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The Body Shop Best Practices

• Lessons learned from The Body Shops success
• Authenticity Adds Value
• The Importance of Staff Selection
• Globalization Can Lead to Greater Success.

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The Body Shop Best Practices

• The Secret of Authenticity
• Leadership demands the expression of an
  authentic self
• Managing Authenticity
• If business is managed from the heart, great
  things can happen
• Anita Roddick

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The Body Shop Best Practices

• Select Staff that Support the Vision of the
  Corporation
• We were searching for employees, but people
  turned up instead
• Anita Roddick
• In companies with healthy cultures, employees
  arent kept in the dark rather they are
  supported in the belief that they are part of an
  exciting future. They come to work with a fire
  inside them, a result of clearly stated
  leadership and business practices that everyone
  explicitly understands. Every person in the
  company knows how to individually contribute to
  its future
• John Hamm

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The Body Shop Best Practices

• Go Global the Right Way
• Exposure to World Markets through previous
  travels.
• Passions for global humanitarian efforts afforded
  her the ability to build relationships with
  members of the international marketplace.
• Roddicks strong focus on communications.
• Communication is the key for any global
  business
• Anita Roddick

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The Body Shop Best Practices

• What are some lessons that can be
• learned from The Body Shop failures?

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The Body Shop Best Practices

• Lessons learned from The Body Shop Failures
• Dont Confuse Your Personal Strategies with
  Business Strategies
• Advertising and Marketing Add Value
• Do Not Underestimate Your Competition

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The Body Shop Best Practices

• Keep your strategies clear
• Entrepreneurs are far more likely than corporate
  managers to
• intertwine their business and personal lives
• Marketing News
• You can get as political as you like, but it
  should be remembered
• that this company is essentially a shampoo
  outfit. People come to
• work here mainly to get by in life-they should
  not need to support a
• pile of political pressures in their day-to-day
  humdrum of work life.
• The politics should come out into the open and
  let the shampoo
• company make shampoo
• Written by an anonymous employee of The Body Shop

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The Body Shop Best Practices

• Let Advertising and Marketing Add Value
• In the rush to expand, we didnt pay sufficient
  attention to marketing details.
• Anita Roddick

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The Body Shop Best Practices

• Competition can be fierce.
• What we didnt have was a strategy to cope with
  competition that was so fast and furious. We had
  not thought of what might happen if a big
  retailer like Wexner, who rents an enormous
  amount of retail space in the malls in America,
  suddenly decided to turn one unit in each mall
  into a copycat of The Body Shop. Immediately, we
  had 500 shops competing with us. We never
  thought like that
• Anita Roddick

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The Body Shop Best Practices

• To what extent are these things
• unique to The Body Shop and to what
• extent might they generalize to other
• businesses?

41
The Body Shop Best Practices

• Video clip
• Anita Roddick
• The Power of the Story

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The Body Shop Balance

• Jonathan May

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The Body Shop Balance

• How sustainable is the success of
• The Body Shop?
• In particular, what should be
• done about the emerging problems and
• expected difficulties with operating the
• business in the United States?

44
The Body Shop Balance

• The U.S. Market Challenge
• It was Gordons view that while the United
  States offered The Body Shop the greatest
  potential for growth, it also represents the
  greatest potential for disaster. - Anita Roddick

45
The Body Shop Balance

• Challenges of the U.S. Market
• The Body Shop image
• Food and Drug Administration
• Resistance to Advertising
• Competition

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The Body Shop Balance

• Should they advertise?
• Its very hard to cultivate awareness and
  familiarity among consumers here without media
  advertising. David Altschiller
• Theres no example of anyone doing what were
  doing in America and making it work Anita
  Roddick

47
The Body Shop Balance

• What is the measurement of success?
• Should The Body Shop compromise some of their
  values in the name of profit in the U.S. market?

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The Real Beauty Behind The Body Shop

• Michele Moore

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The Real Beauty Behind The Body Shop

• Anita claims that part of her goal is not just to
  create a successful business but also serve as a
  model for other businesses. Should businesses
  follow her model of social activism?

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Role Model

• LOCAL TRADE
• RECYCLABLE PACKAGING
• GREEN PEACE
• SAVE THE WHALES
• FRIENDS OF THE EARTH
• BODY SHOP FOUNDATION
• AGAINST ANIMAL TESTING

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Role Model

• 4 SOCIAL RESPONSIBILITY VALUES
• COMMUNITY AND GIVING
• ENVIRONMENT
• PARTNERSHIPS
• FAIR LABOR PRACTICES

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Role Model

• NATURAL PRODUCTS
• NO ANIMAL TESTING
• ENVIRONMENTAL
• HOLISTIC APPROACH

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Role Model

• NATURAL PRODUCTS
• ENVIRONMENTALLY FRIENDLY
• HUMANITARIAN EFFORTS

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Role Model

• RECYCLABLE PACKAGING
• FAIR TRADE
• NATURAL PRODUCTS
• ENVIRONMENTAL SUSTAINABILITY
• GREEN ENERGY
• EARTH MONTH

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The Body Shop Now

• Debbie Nguyen

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The Body Shop Now !

• The Body Shop was purchased in 2006 by L'Oreal.
• Even though it had changed the ownership but the
  value of The Body Shop maintain the same.

57
Anita Roddick

• Anita Roddick retained a role as consultant after
  L'Oreal bought the firm.
• Anita Roddick is not only the founder of The
  Body Work but shes also an author of many
  books.

58
Books wrote by Anita Roddick
59
Anita Roddick

• Anita Roddick cares passionately
• - Social responsiveness
• - Human rights
• - Environment
• - Animal protection
• Therefore, all her books are based on her
  passions and dedications to the World.

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Anita Roddick cont.

• Few years ago, she found out that she had
  hepatitis C infection.
• I want to use the last years I have to get my
  hands dirty working for civil change. I want to
  be able to see the positive difference that money
  can make by giving away what I have.
• In 2004, Roddick donated 1.8 million to Amnesty
  International, the human rights organization.

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Anita Roddick

• Feb. 2007, she revealed of being diagnosed with
  Hepatitis C.
• August 2007, she appeared on live television
  program called Doctor, Doctor in UK as a
  special guest to talk about Hepatitis C.
• Anita Roddick passed away on Sept. 10th 2007 at
  St. Richards Hospital.

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Please give a minute to remember Anita Roddick,
the founder of The Body Shop.
63
References

• 04 Sept. 2007 lthttp//www.thebodyshopinternational
  .com/gt.
• 04 Sept. 2007 ltwww.thebodyshop.comgt.
• "Anita Roddick." Business the Ultimate Resource.
  Cambridge Perseus, 2002. 1134-1135.
• Bateman, Thomas S., and Scott Snell. Management
  Leading and Collaborating in a Competitive World.
  Boston McGraw Hill, 2007.
• Goffee, Rob, and Gareth Jones. "Managing
  Authenticity." Harvard Business Review (2005).
• Hamm, John. "The Five Messages Leaders Must
  Manage." Harvard Business Review (2006) 1-9.
• Roddick, Anita. Business as Unusual. Chichester
  Anita Roddick Books, 2005.
• Roddick, Anita. Interview. The Entrepreneurial
  Mindset. 04 Sept. 2007 lthttp//www.cwerty.com/memb
  ers.aspgt.
• Roddick, Anita. Interview. The Power of the
  Story. 04 Sept. 2007 lthttp//www.cwerty.com/member
  s.aspgt.
• Saunders, Peter. Interview. A Welcome Message
  From Our CEO. 2007. 04 Sept. 2007
  lthttp//valuesreport.thebodyshop.net/gt.
• Sullivan, Patrica. "Anita Roddick, 64 Founder of
  Activist Cosmetics Firm." Washington Post 11
  Sept. 2007. Washington Post. 11 Sept. 2007.