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

 Agenda
I. Building The Body Shop
Janssen Anderson
II. The Brains Behind The Body Shop
Heather Gunther
III. The Body Shop Best Practices
Staci Brandt
IV. The Body Shop Balance
Jonathan May
V. The Real Beauty Behind the Body Shop
Michele Moore
VI. The Body Shop Now
Debbie Nguyen
Building The Body Shop
Janssen Anderson
 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 1980’s
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
 Brief History con’t

 Became officially involved with Greenpeace and in

1986 The Body Shop created an Environmental
Projects Department with “Save the Whales” as it’s 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
 Brief History con’t

 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 L’Oreal
 Today The Body Shop has over 2,000 stores in 54 countries and
has over 1,200 products
 Competitors

 Bath and Body Works

 Origins
 Burt’s Bee’s
 Aveda

 What others can you think of?

 How has the Body Shop been so
successful while defying industry
norms?

 What are important components of

the success of the Body Shop?
 Leadership

 Anita Roddick-”ethical
leader”
 VISION
 COMMITMENT
 PHILANTHROPY
 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 doesn’t have and promote that.”
-Anita Roddick
 No animal testing

 Fair trade
Employees/Environment

 Passionate
 Simple
 Fun
 Knowledgable
 Commited
The Brains Behind
The Body Shop

Heather Gunther
Brains Behind The Body Shop
Anita Roddick
 Parents were entrepreneurs
 Trained in education
 Library researcher in Paris
 Geneva to work with Women’s Rights
issues
 Traveled throughout South Pacific and
Africa
Brains Behind The Body Shop
Anita Roddick

 “Entrepreneurial Mindset” video

Brains Behind The Body Shop
Anita Roddick
How important are Anita Roddick’s
qualities to her management style?
Brains Behind The Body Shop
Anita Roddick

What are some interesting decisions that

Anita Roddick made as a manager?
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
Brains Behind The Body Shop
Anita Roddick
 How important was Anita Roddick’s role
in ongoing management?
 Decisions that she made
 Interviews with franchisees
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?
The Body Shop
Best Practices
Staci Brandt
The Body Shop Best Practices
“As she built her business, Roddick
developed most of The Body Shop’s 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)
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?
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
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.”
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 company’s 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 Shop’s 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”
The Body Shop Best Practices
 Product Development and Production
“Initially, product development had been derived by samples brought
back in Anita’s 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.
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.
The Body Shop Best Practices
 Organization and Human Resources

“Most businesses focus all the time on profits, profits, profits…I 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).
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?
The Body Shop Best Practices

What are some lessons that can be

learned from The Body Shop
successes?
The Body Shop Best Practices
Lessons learned from The Body Shop’s success

 Authenticity Adds Value

 The Importance of Staff Selection
 Globalization Can Lead to Greater
Success.
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
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 aren’t 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
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.
 Roddick’s strong focus on communications.

“Communication is the key for any global business”

Anita Roddick
The Body Shop Best Practices

What are some lessons that can be

learned from The Body Shop
failures?
The Body Shop Best Practices
Lessons learned from The Body Shop Failures

 Don’t Confuse Your Personal Strategies with

Business Strategies
 Advertising and Marketing Add Value
 Do Not Underestimate Your Competition
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

The Body Shop Best Practices
 Let Advertising and Marketing Add Value

“In the rush to expand, we didn’t pay sufficient

attention to marketing details.”
Anita Roddick
The Body Shop Best Practices

 Competition can be fierce.

“What we didn’t 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
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?
The Body Shop Best Practices
 Video clip
Anita Roddick
“The Power of the Story”
The Body Shop Balance
Jonathan May
 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?
 The Body Shop Balance
 The U.S. Market Challenge
 “It was Gordon’s 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
The Body Shop Balance

 Challenges of the U.S. Market

 The Body Shop image
 Food and Drug Administration
 Resistance to Advertising
 Competition
The Body Shop Balance

 Should they advertise?

 “It’s very hard to cultivate awareness and familiarity among
consumers here without media advertising.” – David Altschiller

 “There’s no example of anyone doing what we’re doing in

America and making it work…” Anita Roddick
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?
The Real Beauty Behind
The Body Shop
Michele Moore
 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?
 Role Model

 LOCAL TRADE
 RECYCLABLE PACKAGING
 GREEN PEACE
 SAVE THE WHALES
 FRIENDS OF THE EARTH
 BODY SHOP FOUNDATION
 AGAINST ANIMAL TESTING
 Role Model
 4 SOCIAL RESPONSIBILITY VALUES
 COMMUNITY AND GIVING
 ENVIRONMENT
 PARTNERSHIPS
 FAIR LABOR PRACTICES
 Role Model

 NATURAL PRODUCTS
 NO ANIMAL TESTING
 ENVIRONMENTAL
 HOLISTIC APPROACH
 Role Model
 NATURAL PRODUCTS
 ENVIRONMENTALLY FRIENDLY
 HUMANITARIAN EFFORTS
 Role Model

RECYCLABLE PACKAGING
FAIR TRADE
NATURAL PRODUCTS
ENVIRONMENTAL SUSTAINABILITY
GREEN ENERGY
EARTH MONTH
The Body Shop Now
Debbie Nguyen
 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.
 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 she’s also an
author of many books.
Books wrote by Anita
Roddick
 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.
 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.
 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. Richard’s Hospital.
Please give a minute to
remember Anita Roddick,
the founder of The Body
Shop.
 References
 04 Sept. 2007 <http://www.thebodyshopinternational.com/>.
 04 Sept. 2007 <www.thebodyshop.com>.
 "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
<http://www.cwerty.com/members.asp>.
 Roddick, Anita. Interview. The Power of the Story. 04 Sept. 2007
<http://www.cwerty.com/members.asp>.
 Saunders, Peter. Interview. A Welcome Message From Our CEO. 2007. 04 Sept.
2007 <http://valuesreport.thebodyshop.net/>.
 Sullivan, Patrica. "Anita Roddick, 64; Founder of Activist Cosmetics Firm."
Washington Post 11 Sept. 2007. Washington Post. 11 Sept. 2007.