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The following post was submitted by the authors, Bruce Sheppy and Bryan Mcintosh, and represents Endeavor’s continued interest in sharing different views on measuring impact and social entrepreneurship. The opinions are solely those of the authors and do not necessarily reflect an endorsement or the opinion of Endeavor.
An Undiscovered Country
The Body Shop experiment with Entrepreneurship and CSR
The Body Shop’s business has been an entrepreneurial enterprise of remarkable success. Its core lies on the principle, pioneered by founder Anita Roddick, that ‘(…) the business of business should not be just about money, it should be about responsibility.’ The company is the symbol of the 1970’s corporate social responsibility (CSR) revolution.
Presently, The Body Shop is part of one of the major ‘Giants’ of the cosmetic industry – L’Oreal Group – but its overall performance has been abysmal since the company’s acquisition in 2006. The Body Shop accounts for 4% of L’Oreal net sales figures. The overall net sales figures show a weak performance of the company with £754m for 2010 with a like-for-like growth of -1.1%. The L’Oreal Group attributes the company’s 2010 strategic reorganization as the consequence of the poor sales performance. L’Oreal Group financial statements (2010) reveal a contrast in global sales performance: whereas developed countries sales continue to weaken: in other markets, such as Asia Pacific and Eastern Europe, the company reports a strong sales performance. While the company is still the face of cruelty free and ethics in business practices, its competitors, such as Lush, are in the forefront of customer service. Body Shop is the weakest company in the L’Oreal Group with an overall 8.7% profit.
CSR is based on a pyramid of Corporate Social Responsibility – financial, legal, ethical and discretionary – and its applicability to general business practices. The rationale for this pyramid is that there is a natural progression of any business from being financially sustainable to an ultimate progression of volunteer engagement in social actions.
Nevertheless there is no concrete evidence that demonstrates the applicability of the concept to business strategy. The perceived applicability of CSR in business strategies balances marketing strategies of brand enhancement with an inefficient solution against global poverty in emergent economies. Many now question the idea of Fair Trade and wonder whether the global labor standards set by developed nations are naïve when considering the economic, social and cultural factors of each country.
The Body Shop is the face of CSR practices but it is also a business in serious trouble. It has been traditionally focused on issues of compliance, transparency, volunteerism and philanthropy. The Body Shop is no more the brand that it was once up on a time. CSR practices pioneered by Anita Roddick have enjoyed success in the past but lack in integration with the business principles and The company is lacking in innovation and in understanding what the customer wants. The marketing strategy that follows is one of an abundance of promotions, discounts and loyalty programs but lacking in a core selling proposition to its customer.
In conclusion, the Body Shop, once the epitome of doing responsible business responsible and a pioneer of fair trade practices across the globe, now languishes at a crossroads. Without any demerit to its principles, the fact is that the company is suffering from a steady decline of its sales figures – and.
The company’s CSR vision lacks a strategic integration with customer service and marketing . The CSR ideology is not matched with a marketing strategy that can translate into feasible business practices. The alternative might be to address either an integration of CSR with business strategy, or to adopt a different outlook on how to address the issues by responsibly doing business – the undiscovered country of totally responsible entrepreneurship.
To contact the authors:
Bruce Sheppy, Associate Professor of Marketing, Richmond University, The American International University in London, 16 Young Street, Kensington, London W8 5EH. email@example.com
Bryan McIntosh, Ph.D. Associate Professor of International Business, Richmond University, The American International University in London, 16 Young Street, Kensington, London W8 5EH, bryan.mcintosh@Richmond.ac.uk
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