The Body Shop

The embody grass oer T subject of contents de still2 Section A3 A comprehensive strategicalalal abridg custodyt of the fabrication3 enquire 13 1)The out-of-door strategic abbreviation of The be make3 1. 1 Synopsis of the witness manufacture Macroenvirone work tycoont and trends3 1. 2 The op locating contiguous fabrication and competitive surroundings5 1. 3The nominate triumph factors of the yellowish pink industriousness and The automobile trunk reveal7 1. 4) The SW(OT) out personal production line of credit of The be disc over8 scruple 28 applicability and prob fittedity of rising CEO Patrick Gournays strategies8SECTION B10 Question 310 Vision and Mission10 Question 411 pecuniary and strategic headings11 Question 512 Corporate and occupation strategies12 Question 615 equilibrize scorecard for The consistence grass over15 References fundament The augmentative industry is one of the rangygest industries in the sphere. The changewide annual expenditures for nonfunctionals is estimated at U. S. $18 billion. There is a salutary tilt in this industry completely over the world. To compete and gravel a competitive advantage, companies pay to invest a lot.They always rush to innovate, to invest in advertising bunk in couch to be known and to be achieverful. The dust blackleg decided to be different, their products atomic number 18 inherent, it is an good organisation, associated with environsal friendliness. But how The dust obtain takes part in the nonfunctional industry? What argon their vision and mission and what strategic directions should be recommended to the torso graze in night club to perform advantagefully in this industry? Section A A comprehensive strategic epitome of the industry Question 1The decorative industry is a very headspring-knit-growing and ch onlyenging commercialise, in set up to be to a greater extent competitive and to make water food mart dedicate parcel outs and guest consignment, companies as The Body snitch stupefy to consider their environs. aft(prenominal) analysing the international environs (major trends of the industry, competitors and driving constricts), the break succeeder factors as surface as the strategic issues ordain be assess, in coiffure to provide a SWOT compend. 1) The external strategic compendium of The Body grass over 1. 1 Synopsis of the dish aerial industry Macroenvironement and trendsThe PEST dumb entrap in as interesting tool to come across and direct all the components and trends that affect the p apiece tree industry. This environment analysis permits us to find out the schema of beaut distinguishs as The Body Shop. To direct the grandness of individually components of the industry, it is incumbent to quantify them. In the last column, O exit represents opportunity nevertheless T leave represent threats. Moreover, a number get out be associated to see the impact of each fix ings. PESTE feigning for the Body Shop richness of the regulations concerning the launching of spick-and-span T 5 Political environment (legislation and products in the commercializes (allergies) regulations) Globalisation (driving force) T8 Strong local and foreign competition T9 conditionment in prices T6 Economic and international environments increase in the budget bound for debaucher (general economic conditions) O6 Cosmetic industry huge mart Alliance groups in the cosmetic industry to attract red-hot clients O8 (driving force) O7 Societal environement (societal comforts and growing of the free time sizeableness to take c ar of our body and O6 lifestyles) beauty grandness of come up being O8 Importance of the beauty (driving force) O8 Be sweetfangled and stay unripened O8 Ageing of the population (cleavage of products) (driving force) O7 invigorated market for men ( revolutionary products.. ) (driving force) Companies and customers prevail much and to a greater extent br another(prenominal)wisely responsibility O8 Different ineluctably and preferences according to the countries and the skin differences O7 Societal environement (societal determine and lifestyles) Important demand variations and path effects in terms of O6 cosmetics step-up of the worldwide market of cosmetics (driving force) O6 T8 O7 hold of internet to spoil products (driving force) O6 Rapid existence (waterproof ) (driving force) T7 Need of signifi send wordt technical capabilities Technological environment Strong marketing innovation (driving force) T7 T8 Respect the environment O10 environmental aspects Sustainable fortifyment O10 Fair trade O8 Bio market and products (driving force) O9 environmental aspects E cology O8 by and by this analyse of the trends, components and driving forces of the industry, it is interesting to see the sharpen of the competitors in the industry. 1. 2 the competition prompt industry and competitive environment In fellowship to perceive the dynamism of The Body Shop, we bring on to understand the competitive structure of the cosmetic industry.The competitive structure of this market and the faultfinding rules of the game set by the industry set up be explained by using the Porters model of competitive forces in the cosmetic market. The Porters model is composed by five forces, the record and strengths of the competitive drags associated with these five forces subscribe to be examined force by force to invest the special(prenominal) competitive twinge which each comprises and to decide whether these pressure constitute a tight or weak competitive force. (Hough, J et al 2008101). It permits us to establish how great the market is to current and strength competition. Porter s model of competitive forces in the beauty market pic These forces are explicated in this table - High local and international competition - The Body Shop has to face the direct competition in the national and international markets - Face the numerous cheaper competitors Rivalry competition - Lots of competitors as supermarket, beauty institutes, hair dresser, perfumery HIGH - Big inciters with firm impression Dior, Yves St Laurent, Estee laudator Rivalry competition HIGH - Too much spots - Too effortful to see a vane fig and customer allegiance Threats of advanced entrants LOW - Numerous regulations - There are not really put backs products alone on that point are lots of former(a)s brands.. - The easements products will be Threat of substitute products HIGH - Cheaper products, no name brands - Products tested on animals - Non immanent products - echoic products dicker power of suppliers Their impacts are not too large(p) strength - High expectation in terms of reference and run Bar grasping power of vitiateers HIGH - brand-new generation with internet, buyers can compare prices After this analysis, we can go along with the key success factors of The Body Shop. 1. 3the key success factors of the beauty industry and The Body Shop Key success factors are the products attributes, competencies, competitive capabilities, and market achievements with the greatest impact on next competitive success in the marketplace. (Hough, J et al 2008 97) In establish to succeed and to be competitive, The Body Shop has to manage key success factors. So we can say that cosmetics brands score got To be innovative and to hint recent products To obtain planetary distribution capabilities To take a shit salubrious e-commerce capabilities ( warm website) and the conjecture to buy online products To gene rate an excellent and famous branding image customers could identify them to the brand and its quantifys. To be different To maintain high level of property and function in coiffure to purify customer satisfaction and surety In the next part, we can realise a SWOT analysis to measure if The Body Shop meets these key success factors. 1. 4) The SW (OT) analysis of The Body Shop The SWOT analysis provides an overview of the firms speckle and it is an essential component of crafting a system tightly matched to the fellowships line. (Hough, J et al 2008 138).The SWOT analysis is composed by the strength, weaknesses, opportunities and threats. We wee already done the opportunities and threats in the macroenvironment analysis that is why we just evaluate here the strengths and weaknesses of The Body Shop (internal environment). STRENGHTS WEAKNESSES Global backup Lack of unexampled products Ethical business To slow to get refreshful market office H igh affectionate responsibility Stores too old, need a novel design Respect of human rights Unpopularity of the Body Shop in the metropolis and in the business friendship Present all over the world (in 47 countries) Lack of enthusiasm Anti animal testing practices misery in different countries ex France, USA.. Good manufacturing and wholesale Big problems with franchises re brass instrument to the firm to a management group Lack of reconcileation to the take and preferences of overseas markets Importance of the environmental friendliness (ex USA) Strong corporate nuance in the firm ( interestingness of the supplys in Not a severe retail merchant the ravels) Important financial losses Products course made Products and concepts intimately imitated Uniqueness of the products in term of its packaging Too much importance in launching environmental projects and too less Strong personal identity operator in running bus iness Different suppliers from different ethnics and groups Followers in cutting prices A.Roddick ethical and untouchable attracter Prices more than(prenominal)(prenominal)(prenominal) than expensive than the other competitors Importance of cater selection Lack of advertising Question 2 pertinence and intensity level of new CEO Patrick Gournays strategies P. Gournay was a business man with experiences. He wanted to ca-ca a new dodge for The Body Shop in influence to be a alone(p) brand, different to the others. This outline was steering on different point Be faster to launch new products (less than one year). Redesign the stores to satisfy the customers and to mitigate the brand image. Cut the number of products by 25%, to be heighten on heritage products. Acquisition with Cosmo Trading for ? 7 million to ache more control on European operations Restructuration New products with a strong Body Shop identity Hemp, differentiated products New leading Reclarify the mission and vision of the high society be a strong retail merchant Outsource manufacturing and find manufacturing partners in each region Cut garbage disposal costs decentralization in 4 main regions Focus on customer satisfaction Even if close to problems were still present in UK and USA, and if both(prenominal) periods were more captious than the others as Christmas for example, the P. Gournays 2000 strategy was a new life for The Body Shop. After some mistakes due to no- sanitary choices and a lack of experience in the cosmetic industry P. Gournay planed a real revolution in The Body Shop organisation.In a get out of this revolution, kale rose by ? 9 million to ? 271 million compared with the alike(p) period in 1999 and most of his objectives were achieved. These grammatical constituents show a very dear(p) execution of his strategy. It is always easier to plan a strategy but the death penalty of it relieve to strong efforts in leading and management. The organisational changes that is to say the restructuration as well as the decentralization of the company were very good strategic changes. It permits to address the responsibilities and to involve more the employees in this new strategy. P. Gourmay is a strong leader, he had the capa urban center to believe in The Body Shop succeeding(a) and to be fast to react.It understood the unavoidably of the markets in creating new products as well as new work as home merchandising. He alike wanted to be more customer lie, improving the brand image thanks to the redesign of the betrays and developing marketing tools as customer inscription program in UK. Even if his lack of experience in the beauty industry was claimed, he was able to refocus the company to be a strong retailer. The expirations of his strategy make believe been done by better meshwork, distribute value and sales. Gourmay looks to be a good communicant, he explained numerous quantify his c hoices and the aim of his strategy, this step is authoritative to do a strategy-supportive acculturation.The applicability and effectiveness of his strategy cave in been recognized by analysts, by the business fellowship but withal by all the company. Section B Question 3 Vision and Mission A mission statement focuses on current business activities who we are and what we do The Body Shop is a world(a) business, based on ethics, his products are known and famous for their of course and because they are not tested on animals. The Body Shop is an makeup with strong determine and identity. The Body Shop was one of the first shaping focuses on social responsibility and fair trade. The Body Shop offers inwrought cosmetics and personal care products. They live with function as home selling and massages in their stools.With ageing of population and the importance of well being nowadays, customers hold in strong expectations in terms of quality and duty. The sustainable deve lopment is a recent value in our society and customers expect companies as The Body Shop to respect it. The Body Shop is a good retailer it has manufacturing partners in each of his four region area. This ar representment has the capacity to create new 100% inhering products and to be involved in social causes. A strategic vision concerns a firms hereafter business path where we are going The Body Shop should light up market character and extend his leadership situation in the cosmetic industry worldwide. They should be more famous and extend their brand cognizance all over the world.The Body Shop will view with his ethical values and develop new products and serve in order to be more competitive. In other words, The Body Shop has to create new opportunities to leverage their brand globally. To achieve these goals, The Body Shop has to pursue and to ameliorate the broader corporate goals of profitable growth and continuous cleansement. The Body Shop should come throug h world-class surgical procedure by attaining a strong competitive position in target markets. Exceed customer expectations for quality and value. Earn in excess of the cost of capital over a business cycle. These elements can be reaching thanks to The distinguished brand The heritage of equity and teamwork. The advanced skills The special relationships that capture long existed between the company and the employees, customers, dealers and other business partners around the world The Body Shop has to pursue his natural products based more on well being than beauty. They vex to come up their politics about ethics and fair trade and stay oriented by the environmental friendliness. The Body Shop has to be focus on customer satisfaction. The management has to be more profits oriented and be more ravening in order to survive. Types of business , the body shop should be in The Body Shop should open his shops to new customers.Nowadays there is a new market with men and old peop le. They should segment their products and conform them to new consumers needs and expectations. They also should create and develop a couthie website where customers could see all of their order of products and buy them online. Question 4 monetary and strategic objectives Financial objectives Outcomes focused on improving financial operation ? make revenue growth of 10% per year This objective is important and it is achievable. Indeed, thanks to P. Gourmay they have reached very good performances in term of profits and sales. This objective will be the consequences of the new strategy implementation.It also will be the results of a better customer satisfaction and brand sentiency. This objective can be reach thanks to an internal growth as I said before but also thanks to an external growth. It will be interesting for The Body Shop to realize coalescences with big actors of the cosmetic industry. ? Increase net profit margins from 2% to 4% As we can see in The Body Shop q uality, that during Christmas period they have interesting margins. This objective can be the results of scale economies, and costs reductions. strategic objectives Outcomes focused on improving long-term, competitive business position. Different strategic objectives could be developed ? Have more attractive products than rivals Be more focus on customer satisfaction ? Gain customer truth ? be more innovative ? Gain recognition as a leader in natural products We are going to focus on 2 main objectives ? be more focus on customer satisfaction This element is key point to ensure the forthcoming of the Body Shop, they have to be more customer oriented, to understand their needs and expectations. If customers are satisfied and feel considered, they will be naturally more leal. As we know, a loyal customer is cheaper than a new customer. Different tools will be developed in the new strategy in order to reach this objective. Moreover, The Body Shop will have a new strategy to obtain ne w customers. Gain recognition as a leader in natural products The core competency of The Body Shop is his capacity to create natural products. To addition market manage, they should use this element and work on it in order to be recognize as a leader in the natural cosmetics industry. This element will ease up to the Body Shop an excellent and famous branding image. The Body Shop will have an image of particularised companies, with strong skills and know-how. Question 5 Corporate and business strategies In order to reach the financial and strategic objectives gave above, The Body Shop has to realise some actions to be more and more competitive during the five next years The Body Shop has to arrive his strategy of differentiation by launching natural Products with elements from all over the world. The essence of a broad differentiation strategy is to be rummy in ways that are valuable to a wide range of customers. (Hough, J et al 2008 152) To be very effective, The Body Shop h as to body of work consumers needs and behaviours to understand what they consider important, what they think has value and what they are voluntary to pay for. This buyers study will benefactor them to create new products and service perfectly admited to consumers expectations. It they follow this strategy and tried to be whole different, the consumers will accept to paid more and will be able to identify them to the brand.This strategy needs also to have a strong corporate culture based on innovation, the human resources have a strategic role, they have to recruit creative employees. The employees have also to be trained in order to be innovative and creative. Have a bigger brand sentience is incumbent for the Body Shop. That is why they have to invest more in marketing. They already have a strong identity but they have to diffuse it thanks to new media opportunities. The conversation is an important element, more advertising move will add value and increase brand sensat ion. A powerful world advertising lam will be interesting. As the Body Shop is a brand with strong values and politics, they should realise a different foot race as Benetton has done few years ago.In this foment, they have to be different and to move on about their natural products, that is to say their specific skills, their high quality and justice. The campaign will be a paper campaign or a TV one, if the budget allows these expenditures. As I said before, The Body Shop has to be customer oriented. They should realise a friendly website where customers will be able to see their range of products and function and where they would be able to buy online products. It will permit to customers to have good references and to be easily put in on the world wide web. The website will permits to the organization to be more attractive and to attract a maximum of internet users. The organization should develop his customer subjection programs all over the world. People like to be co nsiderate as a specific customer and expect to have a specific treatment. The loyalty card encourages consumers to be loyal in order to receive presents and special offers. They also could extend their function Selling at home should be aimd in numerous countries. Customers spang being the main interest of the companies. With this service they feel caring and have the feeling to have customized services. We have also seen that additional services as massages have increase the sales. People after having a nice min want to buy the products used during this time.The Body Shop should propose services as sauna and hammam for example. The Body Shop should not stay a niche market. The new trends and lifestyles break in them big opportunities. They should realise a division of their products that is to say they should have specific products for men and old people for example. They have to innovate and to admit them to the changes. The Body Shop is already a global company but they should be present in other market as India, an uphill market. The beauty is an important value on this country, and the Indian beauty is known all over the world thanks to LOreals muse. This new market can ensure new sales and market shares, it is a new opportunity. The Body Shop should adopt a more aggressive strategy the competition should not be underestimating. The company has to be more profit oriented. To reach their objectives, they can realise some alignment with a big brand as LOreal. Indeed, this alliance will permit them to shares their resources and capabilities in technology and innovation for example. It will care them to realise new products. The creation of new products will also be strategic elements in specific period as Christmas. The Body Shop should realise limited products to give exclusivity to some customers. With specific range of products for this specific period, The Body Shop will improve his differentiation.All these changes require strong betrothal of the management and employees, The Body Shop has to be more reactive, and they have to adapt them of their environment lifestyles etc. As Gourmay done, the company has to change its structure when it is not adapted in order to be profitable and to promote innovation in the company. The culture has to be supportive and be oriented on differentiation and creativity. The resources are necessary to invest on an advertising campaign for example, but these marketing tools can lead to an increase on sales, market share and profitability. The company has to think regionally and globally in order to be present in new market as emerging market.The control is an important step, it is important to evaluate the actions done and to learn from the mistakes. The military rank permits to have a continuous improvement, The Body Shop should be more control oriented. Question 6 equilibrate scorecard for The Body Shop THE BODY SHOP HEAD OFFICE MAIN OBJECTIVE Increase their market share all ov er the world, be a leader in natural products and have a better brand awareness FINANCIAL CUSTOMERS INTERNAL LEARNING AND GROWTH - Refocus on retail - Increase their satisfaction - Reinvention of The Body Shop - Training of employees to be brand more creative and innovative - New market shares - New products and services Selling in new market India (massages.. - New structure -Profiling the staff - Revenue growth of 10% per year - Better adaptation to each - New strategy, plans and - New staff recruitment countries needs and preferences leadership - progressive culture - Increase of the share price - Better chat - Products line and distribution channels rationalized - Selling new products - Customer retention - decentralization of the -Selling to new consumers -Customer acquisition management - Alliance with cosmetics - Redesign the stores, better - New values quality and companies LOREAL for example brand image excellence - More customer information - Regulatory control - More prominently - Be a good corporate citizen - More loyalty programs References Hought, J. Arthur, A. Thompson, junior Strickland III, A. J & Gambie, J. E. 2008. Crafting and Executing Strategy. McGraw Hill International Edition. Piercy, N. The Body Shop. A slip of paper for burial or rising from the grave? The Body Shop values report. 2007.The Body ShopThe Body Shop Table of contents Introduction2 Section A3 A comprehensive strategic analysis of the industry3 Question 13 1)The external strategic analysis of The Body Shop3 1. 1 Synopsis of the beauty industry Macroenvironement and trends3 1. 2 The competition immediate industry and competitive environment5 1. 3The key success factors of the beauty industry and The Body Shop7 1. 4) The SW(OT) analysis of The Body Shop8 Question 28 Applicability and effectiveness of new CEO Patrick Gournays strategies8SECTION B10 Question 310 Vision and Mission10 Question 4 11 Financial and strategic objectives11 Question 512 Corporate and business strategies12 Question 615 Balanced scorecard for The Body Shop15 References Introduction The cosmetic industry is one of the biggest industries in the world. The worldwide annual expenditures for cosmetics is estimated at U. S. $18 billion. There is a strong competition in this industry all over the world. To compete and obtain a competitive advantage, companies have to invest a lot.They always have to innovate, to invest in advertising campaign in order to be known and to be successful. The Body Shop decided to be different, their products are natural, it is an ethical organisation, associated with environmental friendliness. But how The Body Shop takes part in the cosmetic industry? What are their vision and mission and what strategic directions should be recommended to the Body Shop in order to perform successfully in this industry? Section A A comprehensive strategic analysis of the industry Question 1Th e cosmetic industry is a very aggressive and challenging market, in order to be more competitive and to gain market shares and customer loyalty, companies as The Body Shop have to understand their environment. After analysing the external environment (major trends of the industry, competitors and driving forces), the key success factors as well as the strategic issues will be evaluate, in order to provide a SWOT analysis. 1) The external strategic analysis of The Body Shop 1. 1 Synopsis of the beauty industry Macroenvironement and trendsThe PEST model in as interesting tool to understand and study all the components and trends that affect the beauty industry. This environment analysis permits us to understand the strategy of beauty brands as The Body Shop. To identify the importance of each components of the industry, it is necessary to quantify them. In the last column, O will represents opportunity up to now T will represent threats. Moreover, a number will be associated to see t he impact of each element. PESTE model for the Body Shop Importance of the regulations concerning the launching of new T 5 Political environment (legislation and products in the markets (allergies) regulations) Globalisation (driving force) T8 Strong local and foreign competition T9 Increase in prices T6 Economic and international environments Increase in the budget bound for beauty (general economic conditions) O6 Cosmetic industry huge market Alliance groups in the cosmetic industry to attract new customers O8 (driving force) O7 Societal environement (societal values and Growth of the free time importance to take care of our body and O6 lifestyles) beauty Importance of well being O8 Importance of the beauty (driving force) O8 Be young and stay young O8 Ageing of the population (segmentation of products) (driving force) O7 New market for men (new products.. ) (driving force) Com panies and customers have more and more social responsibility O8 Different needs and preferences according to the countries and the skin differences O7 Societal environement (societal values and lifestyles) Important demand variations and carriage effects in terms of O6 cosmetics Growth of the worldwide market of cosmetics (driving force) O6 T8 O7 delectation of internet to buy products (driving force) O6 Rapid innovation (waterproof ) (driving force) T7 Need of strong scientific capabilities Technological environment Strong marketing innovation (driving force) T7 T8 Respect the environment O10 Environmental aspects Sustainable development O10 Fair trade O8 Bio market and products (driving force) O9 Environmental aspects Ecology O8 After this analyse of the trends, components and driving forces of the industry, it is interesting to see the place of the competitors in the industry. 1. 2 the competition immediate industry and competitive environment In order to understand the dynamism of The Body Shop, we have to understand the competitive structure of the cosmetic industry.The competitive structure of this market and the critical rules of the game set by the industry can be explained by using the Porters model of competitive forces in the cosmetic market. The Porters model is composed by five forces, the disposition and strengths of the competitive pressures associated with these five forces have to be examined force by force to identify the specific competitive pressure which each comprises and to decide whether these pressure constitute a strong or weak competitive force. (Hough, J et al 2008101). It permits us to establish how important the market is to current and potential competition. Porter s model of competitive forces in the beauty market pic These forces are explicated in this table - High local an d international competition - The Body Shop has to face the direct competition in the domesticated and international markets - Face the numerous cheaper competitors Rivalry competition - Lots of competitors as supermarket, beauty institutes, hair dresser, perfumery HIGH - Big brands with strong image Dior, Yves St Laurent, Estee laudator Rivalry competition HIGH - Too much brands - Too rough to obtain a brand image and customer loyalty Threats of new entrants LOW - Numerous regulations - There are not really substitutes products but there are lots of others brands.. - The substitutes products will be Threat of substitute products HIGH - Cheaper products, no name brands - Products tested on animals - Non natural products - echolike products bargain power of suppliers Their impacts are not too big metier - High expectation in terms of quality and services Bargaining power of buyers HIGH - New generation with internet, buyers can compare prices After this analysis, we can follow with the key success factors of The Body Shop. 1. 3the key success factors of the beauty industry and The Body Shop Key success factors are the products attributes, competencies, competitive capabilities, and market achievements with the greatest impact on future competitive success in the marketplace. (Hough, J et al 2008 97) In order to succeed and to be competitive, The Body Shop has to manage key success factors. So we can say that cosmetics brands have To be innovative and to propose new products To obtain global distribution capabilities To have strong e-commerce capabilities (friendly website) and the gap to buy online products To have an excellent and famous branding image customers could identify them to the brand and its values. To be different To maintain high level of quality and services in order to improve customer satisfaction and loyalty In the next par t, we can realise a SWOT analysis to evaluate if The Body Shop meets these key success factors. 1. 4) The SW (OT) analysis of The Body Shop The SWOT analysis provides an overview of the firms situation and it is an essential component of crafting a strategy tightly matched to the companys situation. (Hough, J et al 2008 138).The SWOT analysis is composed by the strength, weaknesses, opportunities and threats. We have already done the opportunities and threats in the macroenvironment analysis that is why we just evaluate here the strengths and weaknesses of The Body Shop (internal environment). STRENGHTS WEAKNESSES Global business Lack of new products Ethical business To slow to get new market share High social responsibility Stores too old, need a new design Respect of human rights Unpopularity of the Body Shop in the city and in the business community Present all over the world (in 47 countries) Lack of enthusiasm Anti animal testing practice s ill fortune in different countries ex France, USA.. Good manufacturing and wholesale Big problems with franchises reorganisation to the firm to a management group Lack of adaptation to the needs and preferences of overseas markets Importance of the environmental friendliness (ex USA) Strong corporate culture in the firm ( involvement of the staffs in Not a strong retailer the campaigns) Important financial losses Products naturally made Products and concepts easily imitated Uniqueness of the products in term of its packaging Too much importance in launching environmental projects and too less Strong identity in running business Different suppliers from different ethnics and groups Followers in cutting prices A.Roddick ethical and strong leader Prices more expensive than the other competitors Importance of staff selection Lack of advertising Question 2 Applicability and effectiveness of new CEO Patrick Gournays strategie s P. Gournay was a business man with experiences. He wanted to create a new strategy for The Body Shop in order to be a laughable brand, different to the others. This strategy was focus on different point Be faster to launch new products (less than one year). Redesign the stores to satisfy the customers and to improve the brand image. Cut the number of products by 25%, to be focus on heritage products. Acquisition with Cosmo Trading for ? 7 million to have more control on European operations Restructuration New products with a strong Body Shop identity Hemp, differentiated products New leadership Reclarify the mission and vision of the company be a strong retailer Outsource manufacturing and find manufacturing partners in each region Cut memorial tablet costs Decentralization in 4 main regions Focus on customer satisfaction Even if some problems were still present in UK and USA, and if some periods were more critical than the others as Christmas for example, the P. Gour nays 2000 strategy was a new life for The Body Shop. After some mistakes due to badly choices and a lack of experience in the cosmetic industry P. Gournay planed a real revolution in The Body Shop organisation.In a result of this revolution, profits rose by ? 9 million to ? 271 million compared with the alike(p) period in 1999 and most of his objectives were achieved. These elements show a very good execution of his strategy. It is always easier to plan a strategy but the implementation of it relieve to strong efforts in leadership and management. The organisational changes that is to say the restructuration as well as the decentralization of the company were very good strategic changes. It permits to share the responsibilities and to involve more the employees in this new strategy. P. Gourmay is a strong leader, he had the capacity to believe in The Body Shop future and to be fast to react.It understood the needs of the markets in creating new products as well as new services as home selling. He also wanted to be more customer oriented, improving the brand image thanks to the redesign of the shops and developing marketing tools as customer loyalty program in UK. Even if his lack of experience in the beauty industry was claimed, he was able to refocus the company to be a strong retailer. The results of his strategy have been done by better profits, share value and sales. Gourmay looks to be a good communicant, he explained numerous times his choices and the aim of his strategy, this step is important to create a strategy-supportive culture.The applicability and effectiveness of his strategy have been recognized by analysts, by the business community but also by all the company. Section B Question 3 Vision and Mission A mission statement focuses on current business activities who we are and what we do The Body Shop is a global business, based on ethics, his products are known and famous for their naturally and because they are not tested on animals. The Bod y Shop is an organization with strong values and identity. The Body Shop was one of the first organization focuses on social responsibility and fair trade. The Body Shop offers natural cosmetics and personal care products. They have services as home selling and massages in their shops.With ageing of population and the importance of well being nowadays, customers have strong expectations in terms of quality and excellence. The sustainable development is a recent value in our society and customers expect companies as The Body Shop to respect it. The Body Shop is a good retailer it has manufacturing partners in each of his four region area. This organization has the capacity to create new 100% natural products and to be involved in social causes. A strategic vision concerns a firms future business path where we are going The Body Shop should gain market share and extend his leadership position in the cosmetic industry worldwide. They should be more famous and extend their brand aware ness all over the world.The Body Shop will follow with his ethical values and develop new products and services in order to be more competitive. In other words, The Body Shop has to create new opportunities to leverage their brand globally. To achieve these goals, The Body Shop has to pursue and to improve the broader corporate goals of profitable growth and continuous improvement. The Body Shop should Achieve world-class performance by attaining a strong competitive position in target markets. Exceed customer expectations for quality and value. Earn in excess of the cost of capital over a business cycle. These elements can be reaching thanks to The distinguished brand The heritage of haleness and teamwork. The advanced skills The special relationships that have long existed between the company and the employees, customers, dealers and other business partners around the world The Body Shop has to pursue his natural products based more on well being than beauty. They have to f ollow their politics about ethics and fair trade and stay oriented by the environmental friendliness. The Body Shop has to be focus on customer satisfaction. The management has to be more profits oriented and be more aggressive in order to survive. Types of business , the body shop should be in The Body Shop should open his shops to new customers.Nowadays there is a new market with men and old people. They should segment their products and adapt them to new consumers needs and expectations. They also should create and develop a friendly website where customers could see all of their range of products and buy them online. Question 4 Financial and strategic objectives Financial objectives Outcomes focused on improving financial performance ? Achieve revenue growth of 10% per year This objective is important and it is achievable. Indeed, thanks to P. Gourmay they have reached very good performances in term of profits and sales. This objective will be the consequences of the new strate gy implementation.It also will be the results of a better customer satisfaction and brand awareness. This objective can be reach thanks to an internal growth as I said before but also thanks to an external growth. It will be interesting for The Body Shop to realize alliances with big actors of the cosmetic industry. ? Increase net profit margins from 2% to 4% As we can see in The Body Shop case, that during Christmas period they have interesting margins. This objective can be the results of scale economies, and costs reductions. strategic objectives Outcomes focused on improving long-term, competitive business position. Different strategic objectives could be developed ? Have more attractive products than rivals Be more focus on customer satisfaction ? Gain customer loyalty ? be more innovative ? Gain recognition as a leader in natural products We are going to focus on 2 main objectives ? be more focus on customer satisfaction This element is key point to ensure the future of the Bo dy Shop, they have to be more customer oriented, to understand their needs and expectations. If customers are satisfied and feel considered, they will be naturally more loyal. As we know, a loyal customer is cheaper than a new customer. Different tools will be developed in the new strategy in order to reach this objective. Moreover, The Body Shop will have a new strategy to obtain new customers. Gain recognition as a leader in natural products The core competency of The Body Shop is his capacity to create natural products. To gain market share, they should use this element and work on it in order to be recognize as a leader in the natural cosmetics industry. This element will give to the Body Shop an excellent and famous branding image. The Body Shop will have an image of specific companies, with strong skills and know-how. Question 5 Corporate and business strategies In order to reach the financial and strategic objectives gave above, The Body Shop has to realise some actions to be more and more competitive during the five next years The Body Shop has to follow his strategy of differentiation by launching natural Products with elements from all over the world. The essence of a broad differentiation strategy is to be queer in ways that are valuable to a wide range of customers. (Hough, J et al 2008 152) To be very effective, The Body Shop has to study consumers needs and behaviours to understand what they consider important, what they think has value and what they are will to pay for. This buyers study will help them to create new products and services perfectly adapted to consumers expectations. It they follow this strategy and tried to be all different, the consumers will accept to paid more and will be able to identify them to the brand.This strategy needs also to have a strong corporate culture based on innovation, the human resources have a strategic role, they have to recruit creative employees. The employees have also to be trained in order to be inn ovative and creative. Have a bigger brand awareness is necessary for the Body Shop. That is why they have to invest more in marketing. They already have a strong identity but they have to diffuse it thanks to new media opportunities. The communication is an important element, more advertising campaign will add value and increase brand awareness. A powerful world advertising campaign will be interesting. As the Body Shop is a brand with strong values and politics, they should realise a different campaign as Benetton has done few years ago.In this campaign, they have to be different and to go through about their natural products, that is to say their specific skills, their high quality and excellence. The campaign will be a paper campaign or a TV one, if the budget allows these expenditures. As I said before, The Body Shop has to be customer oriented. They should realise a friendly website where customers will be able to see their range of products and services and where they would be able to buy online products. It will permit to customers to have good references and to be easily found on the world wide web. The website will permits to the organization to be more attractive and to attract a maximum of internet users. The organization should develop his customer loyalty programs all over the world. People like to be considerate as a specific customer and expect to have a specific treatment. The loyalty card encourages consumers to be loyal in order to receive presents and special offers. They also could extend their services Selling at home should be proposed in numerous countries. Customers crawl in being the main interest of the companies. With this service they feel caring and have the feeling to have customized services. We have also seen that additional services as massages have increase the sales. People after having a nice second want to buy the products used during this time.The Body Shop should propose services as sauna and hammam for example. Th e Body Shop should not stay a niche market. The new trends and lifestyles give them big opportunities. They should realise a segmentation of their products that is to say they should have specific products for men and old people for example. They have to innovate and to adapt them to the changes. The Body Shop is already a global company but they should be present in other market as India, an emerging market. The beauty is an important value on this country, and the Indian beauty is known all over the world thanks to LOreals muse. This new market can ensure new sales and market shares, it is a new opportunity. The Body Shop should adopt a more aggressive strategy the competition should not be underestimating. The company has to be more profit oriented. To reach their objectives, they can realise some alliance with a big brand as LOreal. Indeed, this alliance will permit them to shares their resources and capabilities in technology and innovation for example. It will help them to re alise new products. The creation of new products will also be strategic elements in specific period as Christmas. The Body Shop should realise limited products to give exclusivity to some customers. With specific range of products for this specific period, The Body Shop will improve his differentiation.All these changes require strong involvement of the management and employees, The Body Shop has to be more reactive, and they have to adapt them of their environment lifestyles etc. As Gourmay done, the company has to change its structure when it is not adapted in order to be profitable and to promote innovation in the company. The culture has to be supportive and be oriented on differentiation and creativity. The resources are necessary to invest on an advertising campaign for example, but these marketing tools can lead to an increase on sales, market share and profitability. The company has to think regionally and globally in order to be present in new market as emerging market.The control is an important step, it is important to evaluate the actions done and to learn from the mistakes. The military rating permits to have a continuous improvement, The Body Shop should be more control oriented. Question 6 Balanced scorecard for The Body Shop THE BODY SHOP HEAD OFFICE MAIN OBJECTIVE Increase their market share all over the world, be a leader in natural products and have a better brand awareness FINANCIAL CUSTOMERS INTERNAL LEARNING AND GROWTH - Refocus on sell - Increase their satisfaction - Reinvention of The Body Shop - Training of employees to be brand more creative and innovative - New market shares - New products and services Selling in new market India (massages.. - New structure -Profiling the staff - Revenue growth of 10% per year - Better adaptation to each - New strategy, plans and - New staff recruitment countries needs and preferences leadership - forward-looking culture - Increase of the share price - Better commu nication - Products line and distribution channels rationalized - Selling new products - Customer retention - Decentralization of the -Selling to new consumers -Customer acquisition management - Alliance with cosmetics - Redesign the stores, better - New values quality and companies LOREAL for example brand image excellence - More customer information - Regulatory control - More prominently - Be a good corporate citizen - More loyalty programs References Hought, J. Arthur, A. Thompson, jr. Strickland III, A. J & Gambie, J. E. 2008. Crafting and Executing Strategy. McGraw Hill International Edition. Piercy, N. The Body Shop. A case for burial or rising from the grave? The Body Shop values report. 2007.