However, when Body Shop was taken over by L’Oreal in 2006 (a company that is known for using animal testing on their products), Body Shop like-for-like sale rose by 9.7% and now have an additional 143 stores. This expansion has therefore increased Body Shop competitiveness. This suggests that the culture of a business does not affect its competitiveness rather the products themselves. As Body Shop changed their culture going against their brand image but managed to increase their competitiveness. Nevertheless, in the long term the change in Body Shop culture could have more of an effect on their competitiveness as it becomes more integrated into L’Oreal business and consumers became aware of the takeover.
In addition by having a culture that complements a business working environment will help improve its competitiveness. For example, Google have an entrepreneurial culture, this encourages staff to take risk and come up with new ideas. This allows Google to be innovative and competitive as they are consistently investing in new business ventures.
However, Microsoft uses a power culture this is when a business concentrate power among only a few people, yet Microsoft is still able to maintain competitiveness. This shows that the culture of a business does not affect its competitiveness. As Google and Microsoft have very different cultures and compete in the same market yet both achieve similar levels of competitiveness.
This implies that other factors must affect a business competitiveness. Such as, the market condition, economic condition and competitors. Woolworth failed due to the recession as this overpowered the culture of the business. Moreover, Innocent smoothies changed their ethical culture in order to survive in the credit crunch as the price of fruit reached a global high. In order to compete with Tropicana, Innocent took their products to McDonalds and allowed Coca Cola to buy an 18% stake in their business. Innocent got very bad publicity for this and forecasted sale growth for 2012 reduced from 35% to 25%. Even with Innocent change of culture it did not improve the business competiveness. This shows that the culture of a business does not really affect a business competiveness rather the economy they are in. As the better the economy the more potential a business has to make profit thus improving their competitiveness.
In conclusion, I believe the culture of a business helps maintain competitiveness. A strong corporate culture can help improve employees productivities and morals as understand a certain standard of work is exceptive. Improving a company culture and employees experience at work will in turn improve a business profitability and competitiveness. In addition by having a culture that complements your business brand image will enhance it USP allowing it to be more competitiveness as it standout to consumers as unique.
Nevertheless, culture cannot solely determine its ability to maintain competitiveness a business has to consider external factors too. Such as the market condition, economic condition and competitors. Many businesses have not been able to be competitive or survive in the recent recession such as, Woolworth and HMV as they weren’t getting enough sales to cover their cost. In addition stores like Habitat were not able to compete with cheaper competitors like IKEA forcing them into liquidation. This shows that a business culture does not in isolation determine it ablity to maintain competitive.