Should the Body Shop move its headquarters from littlehampton to London?

The business problem

Looking at the question ‘should the body shop move it’s headquarters from Littlehampton to London’ many questions come to mind. With London being the economic giant that it is, it would seem almost foolish for the Body Shop to turn down such a chance. However, if this question is examined in depth, it is quite clear that the question is not as simple as first thought. The Body Shop is a company that specialises in the retail of cosmetic goods. The company’s headquarters is situated in Littlehampton, however all of it’s major retail outlets are situated outside of this area. This is due to the fact that London is the most economically active region of the United Kingdom. This is a main factor that contributes to the Body shop’s success and the primary objectives of the company.

I think that the first objective of the body Shop, like any other business is to make a profit, however the body shop aims at achieving this objective through ethical business. This means that the company doesn’t earn money in an unethical manor e.g. polluting, testing on animals, obscene advertising e.t.c. Another objective of the Body Shop would be growth in profits. This may be perhaps 5 per cent each year as this may be what the business thinks is a high growth rate for similar businesses. Growth in sales turnover may also be a major objective. A growth of around 10 per cent may be substantial enough to increase sales thus leading to higher profits. Another sales objective would be an increase in market share. An increase in market share indicates that the business may be doing better than other businesses in the market and again this may lead to an increase in profit. Another objective of the body shop will be expansion of their product range. Selling a wider variety of products is an indicator of a successful business and will also increase sales and profit.

Due to the fact that the body shop is a PLC, the shareholders, the directors, the managers and the workers are all likely to be different people, all with different objectives. This however won’t affect the financial objectives of the business. All of these sales objectives may be more important than the profit objectives. Due to the fact that the body shop has already reached the primary objective (making a profit) I think that the main objective will be to make the business grow. I think that the body shop would like to be a large growing company making reasonable ...

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All of these objectives can be achieved in Littlehampton, but I think that they would be helped by a move to London. This is because London is the most economically active region in England. Inside London is the CBD. This is where most people work-presumably in commercial premises. Due to the fact that London is the capital city of England, it is very likely that London will be the most economically active area and therefore London, is likely to be the centre for trade and other forms of Business. However, it is not the Body Shop’s retail outlets that are moving-It is the main factory. This means that moving to London wouldn’t actually improve the chance of the business achieving it’s objectives, but in actual fact would do more bad than good.

The database HEADQS contains data about the size and location of 20 UK businesses. Most of the businesses have a greater annual turnover than the Body Shop, but the businesses that are remotely close are Waterford Wedgwood and Weatherspoon (All of these earn about 200 pounds more or less than the Body Shop). The businesses that are the same size as the Body Shop in terms of profit, are ‘Pizza Express’, and the Denby group’. The businesses that are the same size as the Body Shop in terms of the number of employees are ’Hogg Robinson’, and ‘Stagecoach’. 6 of these businesses have headquarters situated in London and ‘Eurodisney’ is the furthest away from London.

43% (6) of the company’s on the database are situated in London, however the remaining 47% are situated outside of London. Although London is the centre for most business in England, there is a logical reason for why more companies choose to have their companies outside of London. When you have a factory, there are many components that you need for your factory to function properly. The first thing that you need is space. Having a factory in an area like London is quite foolish because you are likely to be allocated only small area with which to function in. However constructing your factory in a rural area will provide you with a lot of space. This is one of the reasons why I think that the Body Shop factory should stay in Littlehampton. With lots of space and easy access to the central regions of London, it is quite easy for the Body Shop factory to be situated in Littlehampton and still reach optimum performance. Looking at the geographical location of the offices, it is also quite clear that some of the businesses have offices inside of London. I think that this is because they can get goods to the retail outlets quickly via train and other methods of transport. Another reason that the company’s headquarters may be situated in London is because the workers of the factory may live in London and are not willing to travel long distances to get to wok (Commute)