| The Body Shop with their new approach on the cosmetic market, combining strong social messages with natural products was a breath of fresh air and | |took Europe with storm. With franchising as an organizational structure they were able to grow rapidly while starting “Trade not aid” they also | |manage to “create” some of their own suppliers. This was in line with their image of awareness and doing something for the society. It wasn’t only | |the “others” that was supported through different projects, also the employees within the company enjoyed benefits such as childcare and education. | |Anita Roddick, founder of The Body Shop and a strong profile for the company did most of the research on her trips all around the world. Her strong | |image might have been to their disadvantage some times and other times her strong believes and controversial methods the reason to their success.But| |it all came to a head when the question to enter the U.S market came up. Will the competitive climate of the U.S market crush The Body Shop and | |destroy the whole chain? And will the values of Body shop and Anita Roddick’s image be well perceived by the potential customers? |
1. Pest Analysis
In many countries, their governments have established special control committees, such FDA in North America, in order to test new products that are going to be offered in the market and prevent any severe side effects on the consumers, which will increase costs and entry barriers. Furthermore, political restrictions in the new markets, such as China, can also affect companies that attempt to expand and increase their market share.
Another factor that can also play a significant role in the industry and must be taken into consideration mostly by the centralized companies is the different political identities of the customers in different markets. Firms that tend to have socialist characteristics may face many difficulties in capitalist environments and societies.
Political instability in some countries that are huge suppliers in the natural cosmetics industry, such as African and South-American countries, can also have a negative effect in the industry’s environment.
The biggest part of the industry’s costs are marketing, since it represents 85% of the total costs, which makes it clear that marketing and advertising is vital for the survival of any company in the long run. Companies that have poorly invest in this factor or not at all must readjust their strategies. Also , the huge growth rate of new markets, such as India and China, as well as also South America, must also be taken into account, where companies can offer their line of products for maximizing their profits. Although, GDP of these countries that just entered the global market are still very low, which will require different price strategies.
People, in that period of time, are becoming more environmentally conscious and socially responsible, and get more influenced by social messages , such the ones that Body...