GROUP ASSIGNMENT 1 FOR 2012 MST 3871 The Body Shop International plc

The very first The Body Shop store opened on 26th March 1976 in Brighton, on the south coast of England. By 1978 the first overseas franchise is a kiosk in Brussels and by 1982 new shops open at a rate of two per month. In 1985, in its first year as a public company, The Body Shop sponsored posters for Greenpeace. A year later, it created an Environmental Projects Department of its own, while the first major campaign for The Body Shop is "Save the Whales" with Greenpeace, in 1986. The first Community Trade product for The Body Shop was a footsie roller, produced in 1986 by a supplier in southern India. This trade in footsie rollers has evolved into the current trade with Teddy Exports in India, one of our key Community Trade suppliers. By 1990, just one year after launching in the USA, there were 2,500 applications for a franchise, with demand for The Body Shop products ever-growing, driven by expansion which saw the company trading in 39 countries within just fourteen years after the opening of the very first shop! In 1990 The Body Shop Foundation was established, a charity which funds human rights and environmental protection groups. The Big Issue paper for homeless people, which began as a The Body Shop Foundation project, was launched in 1991. By 1998 its success saw The Body Shop Foundation part-funding the launch of the The Big Issue stateside, in Los Angeles. The New Academy of Business was established in 1995, as an initiative by Anita Roddick. This innovative management degree addressing social, environmental and moral issues is run at The University of Bath, in England. In 1993 the Company launched an international high-profile campaign to raise awareness of the plight of the Ogoni people and their leader Ken Saro-Wiwa, persecuted for protesting against Shell and the Nigerian dictatorship over exploitation in their homeland.

The Body Shop At Home, the direct-selling arm, was launched in the UK in 1994, Canada in 1995, Australia in 1997, and USA in 2001. It has now rolled out in 48 states in the USA and is set to grow even bigger. The Body Shop continues to increase its environmental practices. In 2001, The Body Shop UK region and service centre head offices in Watersmead switched to Ecotricity providing them with energy from renewable sources. In addition, a number of The Body Shop stores have now converted to green electricity while the rest of the stores are set to follow suit. Campaign successes include the Against Animal Testing campaign. The campaign led to a UK-wide ban on animal testing on cosmetic products and ingredients in November 1998 and led to the largest ever petition (four million signatures) being delivered to the European Commission in 1996. In 1997, The Body Shop was the first international cosmetics company to sign up to the Humane Cosmetics Standard supported by leading international animal protection groups. In 1995 and 1997 The Body Shop Values Reports were recognised as trailblazing by United Nations Environmental Programme and SustainAbility and ranked highest in their review of International Corporate Environmental Reports. In 1997, The Body Shop celebrated its 21st birthday with the launch of a new flagship store design, winning the prestigious Retail Week Store Design of the Year Award. To celebrate the 50th Anniversary of the Universal Declaration of Human Rights in 1998, The Body Shop launched a joint worldwide campaign with Amnesty International to highlight the plight of human rights defenders around the world, encouraging customers to 'Make their Mark' for human rights. This successful campaign saw three million people sign up. In 1999, The Body Shop created four new business units in the UK, Europe, the Americas and Asia, shifting its operational and management structure out to the regions. 2001 saw the first The Body Shop customer reward scheme launched in the US. It became so popular it's now in key markets globally, known as Love Your Body customer scheme with customers rewarded by 10% off their purchases, free gifts and a birthday present, as well as other members-only benefits. The Body Shop branches into South Africa in June 2001, via New Clicks Holdings as The Body Shop direct franchisee in South Africa. New Clicks has a strong commitment to corporate social responsibility through its New Clicks Foundation. During 2002, The Body Shop ran a global campaign with Greenpeace International on promoting renewable energy, which culminated in the presentation of over six million

customer signatures at the World Summit for Sustainable Development in Johannesburg. We further our commitment to environmental sustainability through investment in renewable energy, funding of energy efficiency projects in the developing world, and incorporating post-consumer recyclate into our packaging. During 2003 The Body Shop launched a global campaign to help Stop Violence In The Home. This builds on almost a decade of campaigning on the issue in a number of our markets, including Canada, the USA, and West Malaysia. The campaign aims to highlight the issue, raise money to support the work of groups helping victims of violence, and ensure that customers and employees are provided with information on sources of advice and help. Anita Roddick is appointed as a Dame of the British Empire as part of the Queen's Birthday Honours on Saturday 14th June 2003. During 2003 The Body Shop launches in Estonia and Turkey. In 2004 The Body Shop is the first global retailer to join the Board of the Roundtable for Sustainable Palm Oil, working with NGOs and plantations to protect tropical rainforests and improve the human rights of workers and indigenous people. In 2005 The Body Shop joins The Campaign for Safe Cosmetics and is commended by Greenpeace and the Breastcancer Fund for our responsible chemicals policy. During 2005 The Body Shop is awarded for achieving higher standards of animal welfare in the cosmetic category at the first annual awards of the Royal Society of Prevention of Cruelty to Animals in the UK. An independent panel of judges chose The Body Shop as winners because of our Against Animal Testing Policy. The Body Shop comes to Jordan and Russia in 2005 with a total of 2,045 stores around the globe. In 2006 The Body Shop turns 30 (March 27th)! In 2006 The Body Shop wins PETA's Proggy (progress) awards for our commitment to avoid animal testing. The Body Shop becomes part of the L'Oral Group and de-lists from the London Stock Exchange on July 12 2006. It retains its unique identity and values and continues to be based in the United Kingdom. It operates independently within the L'Oral Group and is led by the current management team of The Body Shop reporting directly to the CEO of L'Oral, Jean-Paul Agon. Additional The Body Shop International plc, known as The Body Shop, has over 2,000 stores in more than 50 countries. The company, headquartered in Littlehampton, West Sussex, England, was founded by Anita Roddick and is known for its 100% vegetarian products ranging from Body Butter, Peppermint Foot Lotion, and Hemp. The Body Shop is also known for its committment to its core values which support a wide range of issues around the globe.

These include: Against Animal Testing, Support Community Trade, Activate Self Esteem, Defend Human Rights, and Protect Our Planet.

History On 27 March 1976, the first The Body Shop opened at 22 Kensington Gardens, Brighton. Roddick started The Body Shop to create a livelihood for herself and her two daughters while her husband, Gordon, was trekking across the Americas. There are many stories about the start of the company including how it opened next to an undertaker, who complained to the local council about the name of the store. The local bookmaker nearby took bets on how long it would be before The Body Shop closed. In response to this opposition, Roddick wrote a letter to the council stating that she was a housewife with children trying to make a living. The original logo and product labels were designed by an art student, Jeff Harris, who was paid 20. The Body Shop has always had many controversies surrounding it, including several related to marketing campaigns the company has run such as the Ruby campaign. The company created a plus size doll in the likeness of Barbie that came with the tag line, "There are 3 billion women in the world and only 8 that look like supermodels" . Mattel subsequently sued the company for copyright infringement. The company stopped the campaign but by that time the word had gotten out and Roddick had made her point. The company operated that way for most of its first 20 years. Roddick was the controversial figurehead that would always stir up some trouble somewhere in the world because of something she said, including the time she spoke out against the Iraq war. The company and Roddick received harsh criticism. Early success The Body Shop experienced rapid growth, expanding at a rate of 50 percent annually. Its stock was floated on London's Unlisted Securities Market in April 1984, opening at 95 pence. In January 1986, when it obtained a full listing on the London Stock Exchange, the stock was selling at 820 pence. By 1991 the company's market value stood at 350 million ($591 million). There were other achievements as well including being instrumental in banning animal testing for cosmetic purposes in the U.K. In March 2006, The Body Shop agreed to a 652.3 million takeover by L'Oreal. It was reported that Anita and Gordon Roddick, who set up The Body Shop 30 years ago, would make 130 million from the sale. There was a huge controversy due to the fact that L'Oreal still tests on animals, which contradicts The Body Shop's core value of Against Animal Testing. There were many boycotts around the globe from customers and other retailers, especially in the United

Kingdom where the company has its headquarters. Roddick had to go on the news and face harsh critcism from the public.

Social activism Roddick states, "For me, campaigning and good business is also about putting forward solutions, not just opposing destructive practices or human rights abuses" From early on, The Body Shop reflected the activism of its founder through billets posted on shop windows to sponsorship of local charity and community events. Roddick criticized what she considered the environmental insensitivity of the industry and traditional views of beauty, and aimed to change standard corporate practices. In 1986, The Body Shop formed an alliance with Greenpeace, campaigning to "Save the Whales", despite some concerns among franchisees that the head office was becoming too political. By 1990 Roddick had switched allegiances to Friends of the Earth, following disagreements with Greenpeace. The Body Shop also promotes values such as Community Trade, reflecting its avowed practice of trading with communities in need and giving them a fair price for natural ingredients or handcrafts they purchase from these often marginalized countries. The first CT activity in 1986 was a footsie roller which was supplied by a small community in Southern India (today known as Teddy Exports) and still a key CT supplier. Since then, The Body Shop has found many trade partners in over 24 different countries that often are overlooked by the local as well as the global society. The Body Shop Foundation The Body Shop Foundation supports innovative global projects working in the areas of human and civil rights and environmental and animal protection. It is The Body Shop International Plc's charitable trust funded by annual donations from the company and through various fundraising initiatives. The Body Shop Foundation was formed in 1990 to consolidate all the charitable donations made by the company. To date, The Body Shop Foundation has donated over 9.5 million sterling in grants. The Foundation regularly gives gift-in-kind support to various projects and organisations such as Children On The Edge (COTE) Community Trade (formerly Trade not Aid)

By 1991, The Body Shop's "Trade Not Aid" initiative with the objective of "creating trade to help people in the Third World utilise their resources to meet their own needs" had started a paper factory in Nepal employing 37 people producing bags, notebooks and scented drawer liners. Another initiative was a 33,000 square foot (3,000 m) soap factory in the depressed Glasgow suburb of Easterhouse, whose payroll included 100 residents, some previously chronically unemployed. Sometimes considered anti-capitalist or against globalization, The Body Shop philosophy is in fact in favour of international marketplaces. The chain uses its influence and profits for programmes such as Trade Not Aid, aimed at enacting fair labour practices, safe working environments and pay equality. The Body Shop is banned in China, because cosmetics sold there have to be tested on animals, according to Roddick. The Body Shop has undertaken periodic independent social audits of its activities. On March 17, 2006, The Body Shop International agreed to a 652 million takeover offer by L'Oral. Some have criticized the decision. For example, Ethical Consumer magazine said that the Body Shop had dropped from 11 out of 20 to only 2.5 under their ethical rating system following the takeover Products The Body Shop carries a wide range of products for the body, face, hair and home. As of June 2007, The Body Shop became 100% vegetarian, although some products still include ingredients such as beeswax, preventing the company from becoming fully vegan. The company is known for its Body Butters but has received attention lately for several other ranges including: Make Me Fabulous The Body Shop's makeup range. Recently relaunched globally in September 2006, the new range continues to grow with limited edition products. One of The Body Shop's many Community Trade ingredients, marula oil, is in many of the products and is sourced from the Eudafano Womens' Co-operative in Namibia, Africa. The Body Shop was the first international cosmetics and skincare company to use such an ingredient. Accessories These include loofahs, sponges and massagers to an award-winning range of makeup brushes. Many of the accessories are made by Community Trade partners. 65% of the companies products will contain community traded ingredients by the end of 2008 and the company spent over $12 million on Community Traded ingredients in 2006. Use the Body Shop Case above to answer the following questions:

1. What are the basic entry decisions The Body Shop had to make before contemplating foreign expansion (16 Marks). 2. Explain the different modes of entry The Body Shop is exploiting to enter foreign markets (30 Marks). 3. What is the corporate strategy of the Body Shop? (6 Marks). 4. Outline the competitive strategy(ies) of the Body Shop. (10 Marks). 5. Explain the relationship between company strategy (Body Shops Strategy) and the modes of entry the company is using to harness foreign markets (8 Marks). 6. Discuss the controversies surround the Body Shop globally? (15 Marks). 7. What steps should the company take improve its export drive and strengthen its global expansion process (10 Marks). 8. The owner and Founder of The Body Shop died last 2 years. In your opinion, what is likely to be the impact of her untimely death to firm? (5 Marks).

Fanie 0813022416

Due Date: Friday 30 March, 2012

Time: 16:30 hrs

Total Mark Allocation: 100 Marks

NB: Please submit to the two class captains!!! No work shall be directly submitted to Lecturer. Neither could anyone leave his/her work under my door. Thank you.

God bless you all!!!

O Fin! El Fin! The End!!!