During the last half of the 21st century, the boom of industrialization in the western countries created a conducive environment for ignition of brilliant ideas by the business oriented entrepreneurs. This coupled with the renewed vigor for female empowerment efforts resultant from the mass movements in the earlier decades; led Anita Roddick United Kingdom after a brief but fruitful visit to a soaps and lotions shop in Berkeley California U. S.A (Older et. al 1998). With a business oriented mindset, Anita saw a business opportunity in the U.K and utilized it for the benefit of the country, the society and recently the globe at large. Given that Anita was a renowned environmentalist and human right activist, her ideals are reflected today in the policies, mission and vision of The Body Shop (Body Shop, 1994).
Today, The Body Shop has yielded a tremendous global influence and success in its specialized field of provision of body products. When weighed in comparison to other companies started in the 1970s, The Body Shop has shown consistency and resilience in its performance for decades, thus surviving the tough times of the global economic meltdown. In this regard, this paper seeks to discuss the strategies that the multinational company has put in place to ensure the achievement of the sustainability levels that the company enjoys. Furthermore, the paper shall cover on the possible strategies that the company is likely to incorporate in its policies for future implementation that will enable its dominance and gain of competitive advantage against its rival companies. In fact, the paper will focus more on the shifting trends in the Australian market and the possible strategic response accorded by The Body Shop managerial body. (Cauwells, 1986).
Introduction.
The Body Shop was founded in the year 1976 in the United Kingdom Anita Roddick Belgium
The Importance of the Body Shop Company to the Australian and International Business Landscape.
The role that The Body Shop plays both domestically and internationally is of significant importance in the following ways.
1. Setting business innovation standards
The scale of success by the Body Shop Company in cosmetic products both in Australia
2. Providing a lead in concern for the environment
The Body Shop has diminished the overall impact of the business activities tremendously by significantly cutting on the levels of energy consumption and finding ways with which lesser waste can be generated. Consequently, there is an observed improvement in the working conditions in the business environment due to minimized environmental pollution. Additionally, other business entities both in Australia
3. Filling of the Australian Trade Gap
The foreign exchange also referred to as a trade gap is annually filled by the existence of the Body Shop in the Australian business environment. This is majorly because the company is found on a global scale and, as a result, the witnessed inflow of capital form foreign nations helps in diminishing or completely eliminating the business deficit especially in equalizing the payment. This is usually the observed situation during the years when the company experiences positive export earning flows.
4. Filling both the Management and Technological Gap
In various countries where the Body Shop is located, including Australia, vital resources such as the technological knowhow, the managerial expertise and the entrepreneurship capabilities have been successfully transferred to local business entities either directly or indirectly through offers of training programs or the “learning-by-doing” process to the benchmarking small local businesses.
5. Provision of Tax revenue to the government
Essentially, the Body Shop Company has assisted the local government authorities to boost its capability in the development of the national infrastructure facility set-up. These not only directly provide gains to the company in ensuring efficiency in product and service delivery, but also to other small business entities as well. This case applies to both the Australian Body Shop and of other developing countries.
Sustainability Related Strategies and issues in the Body Shop Company
The following are some of the strategies implemented by the company in order to ensure its long-term sustainability:
1. Animal Rights Advocacy
Since its conception, the firm has strongly advocated on the use of animals to make preliminary tests before the product can be released to the market. While this is an ideal attached to the personal feelings of the organization's founder, it is also viewed as a sustainability measure, in that the target market segment that has strong affection for animal as well as total respect to their right will be assured of the company's stand on the issue and thus will become regular customers. In turn, the organization will be able to sustain its needs hence the success and long-term survival. Additionally, the company automatically complies with the rules and regulations laid down by Humane Cosmetic Standards (Aras et. al, 2012).
2. Support of Fair Trade in Communities
Community Fair Trade programs initiated by the company as one of its sustainability strategies ensures that the company sources the raw materials that are main ingredients of the cosmetic products from small scale farmers from across the globe. By doing so, the maiden skills of the raw material farmers are subsequently harnessed and thus leading to the overall increase in the final product efficiency levels (Werbach, 2009). For sustainability reasons, this strategy can be interpreted as a way of reaching out to the small scale farmers market, which is widely neglected by the competing firms. In the long run, the farmers’ living standards will be improved and thus they will become regular consumers of the company’s product due to their feel as part and parcel of its entire production process. It is also regarded as one of the ways of implementing the corporate social responsibility activities (Ewenje, 2011).
3. Boosting of Customers Self Esteem Levels though Product Adverts
Long years of market research by the company’s experts have resulted in the revelation that more than half of the cosmetic product consumers have low self-esteem. To tap into this market and therefore ensure the resultant sustainability of the firm, the marketing department has heavily invested time and resources in devising adverts that instills confidence of the product's ability to boost self esteem levels. For instance, an advert on The Body Shop women cosmetic product claims that the product is made up of ingredients that remarkably enhance the natural inner beauty and clearly displaying the individual's unique individualism ( Ewenje, 2009). Via an advert like this, target female gender dominated market will become the regular customers for the goods and services offered, earning sales revenue to the company in which part of it will channel to meet the operation cost hence sustainability.
4. Advocating and Defense of Human Rights
Abuse of human rights in a given country can tend to reach levels that render businesses inoperable. Countries where human rights are continuously abused by dictatorial powers often have market entry restrictions to the products and services from a free world. This will eventually lead to the inability to sustain a multinational organization in such countries. Fully aware of this fact, the Body Shop Company is constantly involved in championing for human rights activities in affected regions of the globe in order to avert possible future business failures. For instance, there is allocation of funding for spending in global awareness creation for domestic based violence. Scholars argue that such focus was aimed at preserving the female gender rights who are the most likely victims of such abuse at the same time regular users of the cosmetic products.
5. Environmental Sustainability Strategy
Strategies that leads to the reduction of environmental impact by the business activities relates to the overall sustainability of the business itself in the long run. As an elaboration to this, some of the business operation activities that are not environment-friendly are very costly to the business as well, hence the difficulty in its sustainability. For instance, use of conventional non-renewable energy sources such as coal and oil to generate electricity for production have been confirmed to cost more than half the average cost of sustainable energy. Because of this reason, the Body shop has remarkably embraced more clean and cheaper energy usage as well as cutting on extravagance in its utilization ( Andreas, 2011).
6. Embracing Business Ethics
Fair treatment of both employees and customers alike and engaging in transparent business activities is one of the vital policies that are treasured by the management of the Body Shop business entity. The reason for this is that the future performance and success of the company highly depends on the treatment accorded to the employees and the customers. Mistreated employees will become less motivated to work hence low performance, leading to low standards and reputation of the company. On the other hand, poor customer service through non-ethical means leads to customer loss by the organization. Contrary, well-treated customers will be satisfied and hence become a regular customer for the company's goods and services (Carrol, 2009).
Role of Organizational Behavior
Since Anita Roddick Cole , 2004). Additionally, the engagement of activities geared towards showing concern for gender equality by the organization has also led to the high demand for the cosmetic products especially by the female market population as they feel that their needs are addressed by the company (Aquinas , 2006).
Furthermore, an organization culture of transacting business activities in an ethical manner has been adopted by all employees. This ensures that there are transparency and fairness to employees in matters such as promotion and recognition for good work done. In turn, such behavior by the top management has triggered competitiveness amongst employees which further raise the performance level of the organization on a global scale (Singh, 2020).
Human Resource Management Practices
It is a policy of the Body Shop Company that the employees hired possesses the necessary skills and expertise to do the allocated work. To ensure this achievement, the human resource management body has devised concrete steps to be followed in the hiring process. In these steps, failure by the potential employee to satisfy the requirements of a given stage leads to the inability to advance to the next level. Ultimately, the potential employees that qualify for the final step satisfactorily meet the job requirements and thus are suited for the job offer. Additionally, the employees are constantly and periodically assessed to determine their competence level meet the minimum levels required by the management. A slight sign of weakness portrayed in the employee performance triggers the appropriate measures that are taken to restore the competitiveness of the employee. Additionally training sessions and seminars are accorded to employees in order to meet the ever-shifting requirement for the sustained or improved organizational performance (T.B. W, 2015).
Role of International Business at the Body Shop
As a multinational organization, the Body Shop Australia Company is highly influenced by the international company performance. For instance, the management of all the global branches narrows down to the top management level of the international company. Therefore, the decision made by these managers has consequences that reach down to the Australian branch. Another role is that the company sources for raw materials for the products for various parts of the globe. Therefore, the fluctuation of the global prices and foreign exchange currencies has a huge impact in the overall stability of the company and its performance. Also, the effect of the international trade policies yields commendable influence on the performance of Australians Body Shop Company, given that it comprises the structured rules and laid down regulations with the main aim of engagement of fair trade practices at an international stage (Schuster et.al, 2006).
Further, logistical factor such as the transportation of sourced products from on e area of the globe to the other are time-consuming and expensive as well. This cost will have to be covered by all the global branches of the international companies despite the differences in the market conditions in the respective countries. As a result, losses can be incurred by the Australian company due to the fragility of international business activities.
Role of Technology
Most of the companies today are highly reliant on the technology and its advancement in order to gain a competitive advantage against its rival. Effective embrace and management of new technology is advantageous in the performance of the company as it ensures that the cost of operation is greatly reduced for production. . Technology on automated productions, for example, will ensure the phasing out of most of the employees hence cutting on the personnel expenses. Additionally, given that machines have no feelings such as boredom, there will be constant optimal performance levels throughout the production time. Though technology replaces humans rendering them jobless, but the main aim of any business entity is to make maximize profit. Therefore, in the long run, the role a technology plays in an organization is ensuring that there is absolute minimization of operation cost while at the same time the production is maximized hence profit. Further, use of technology saves on production time.
Marketing the products is ensured that it reaches a wider targeted market through online advertisement technology. The fact that most of the target market for cosmetic product in Australia possesses a technological gadget like phone or laptop, used for accessing the social sites of the internet, posting adverts n such sites will ensure that the message about the products offered by the Body Shop reaches such market (Benson et. al, 2004).
Analysis of Innovation and Entrepreneurship at the Company
The body Shop company has undergone various innovative transformations for over a decade that it has been operational. The innovative transformations are highly inspired by the entrepreneurial culture that is the pillar to the organization structure. Additionally, the need for the innovative transformations witnessed is resultant in the rampant shifts in the cosmetics and the body products sector. Cosmetic products are fashionable, in the consumer needs are triggered by the time changes. There are seasonal products that are on high demand during certain times of the year. The Body Shop, through its innovative culture, has found a way of transforming these products to become meet the consumer needs for all seasons.
Entrepreneurship involves taking risks; the same case is reflected in the introduction of a new product in the market. Therefore, the numerous years that the Body Shop has been in existence has ensured that there is a study and an understanding for the common consumer needs. This has enabled the timely prediction and innovation of the products that earns the consumers loyalty to the organization (Martin et. al, 1994). Also, a huge amount of funding is annually allocated to the research and development activities. Fortunately, such an effort has borne fruits, keeping the organization a step ahead of its competitors. Essentially, the measurement of success is based on the ability to innovate and meet the market demands in time; the analysis of the Body shop decade’s long performance and activities proves this fact.
Future Strategies for the Firm.
1. Expansion and provision of other services that are not cosmetic in nature: Given the level of consumer loyalty and trust that the organization has amerced for decades, the organization has a higher chance of revolutionizing the business mindset especially in Australia
2. Improving on the environmental conservation strategies: Given the rise in global warming, the businesses are threatened. For instance if drought hit harder on African farms which are sources of raw materials for the cosmetic products, the alarming effects to the company will become eminent. A quick check on the annual financial records for the organization reveals that the allocation for environment conservation and awareness creation has almost remained constant for years, despite the worrying trend of climate change and global warming. As a future strategy, this should be altered (Aaker, 2001).
3. Focused expansion into the untapped market in developing and recently industrialized countries: Notably, recent statistics shows the third world and developing countries account for more than half of the entire global population. Considering this, the company should have targets of strategically penetrating into the developing countries which are booming in economic terms. This boom means that more of the population is joining the middle-income class, hence a higher demand for the products offered by the Body Shop Company (Kourdi, 2009).
Conclusion
In conclusion, it is evident that the sustainability measures that the Body Shop Company have laid down have ensured that it survives the boom and doom that the global economy has undergone in the recent past. Therefore, improvisation and continued effort to meet the changing consumer need will guarantee the survival of the company for more decades to come.
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