In the following part, the background of LUSH Company and its products will be given. Company background
LUSH is an internationally recognized cosmetics retail corporation producing and selling handmade beauty products. With its roots in the 1970s, LUSH Company has grown to over 700 shops in 43 countries by 2011 (lush.co.uk). In the early 1970s, Mark Constantine, the original founder together with Elizabeth Weir established wholesale soaps and cosmetics company Constantine & Weir which began to be The Body Shop’s main supplier of soaps and cosmetic products (Evans, 2009). In 1988, the company launched a new enterprise—Cosmetics To Go headquartered in Poole, Dorset, UK. They sold their natural products through The Body Shop and the mail order business. However, due to some unfortunate events and a major recession at the end of the 1980s, this company went bankrupt. But the bankruptcy didn’t let Mark give up his career. In 1994, Mark restarted his business in Poole and renamed his company ‘LUSH’ (Evans, 2009). From then on, this company began to be popular throughout the world. By 2012, there are 22 LUSH shops in France.
LUSH produces fresh-made soaps, shower gels, shampoos, lotions for the hair, face and body with 100% vegetarian recipes. The concepts of “ecological” and “green” are shared by LUSH Company, which include a major concern for the environment, a wish to reduce packaging and wastes, a desire to build an environmentally sustainable business. The company prefers solid rather than liquid products as they can be cut and wrapped in grease-proof paper without any plastic bottles (Evans, 2009). As the “we believe” statements illustrate on its websites, “We believe…in making effective products from fresh, organic fruit and vegetables, in buying ingredients only from companies that do not commission tests on animals and in testing our products on humans,” etc. The company values focus on freshness, safety, no animal testing and sustainability of resources in general.
2. Situation analysis
Macro Environmental Analysis
Lush Company launched in France can face great chances. Firstly, the future for natural cosmetics companies is bright. The European Union has published the Cosmetics Products Regulation (1223/2009) which will go into effect on July 11, 2013 (Steinberg, 2010). This regulation will focus more on product safety to protect human health which is in consistence with LUSH Company’s value. Besides, it will create a legal standard on natural cosmetics to protect its industry. Secondly, France and United Kingdom maintained a fairly close relationship during these years. Nicolas Sarkozy, the French President said Britain and France have never been so close and he wanted a new “brotherhood” between the two countries (Porter, 2008). This friendly relationship guarantees a stable political environment for the development of LUSH Company in France.
However, despite the great opportunities for LUSH Company, some threats cannot be ignored such as the company tax in France. The rate of company tax depends on the turnover and capital structure of the business. At present, the individual income tax rate increased to 40% and the corporate tax rate are progressive up to 33.33%. The sales tax/VAT rate reached 19.60% (Tax rates, 2010).
France is a very attractive cosmetics market due to its strong economy. The following parts illustrate the economic opportunities for LUSH Company. First of all, France has a High-income economy and is the second-largest trading nation in Western Europe. The World Economic Forum ranked France 18th out of 139 countries in terms of competitiveness and 4th in terms of infrastructure. Besides, GDP is known as the best index for measuring country’s economy. A country with a better state of economy will be beneficial for launching business. According to CIA (2012), The GDP (purchasing power parity)...