ANALYSIS AND EVALUATION
In today’s economy, big and small businesses are seeking every opportunity to gain a good competitive advantage. Competitive advantage comes when you have or do something that others can’t have or do. It’s what makes an organization unique and successful. To get it right, a company must carefully identify what people need. It must be hard for other business to copy or competitive advantage will not last very long.
The main features that identify a strong competitive advantage are innovation, reputation and relationships.
Innovation is introducing something new. It may involve changing the product, changing the way things are maid or changing the organization of the business. However, a new idea which is easy to copy will not bring any success to a company. So, once a product been invented, it needs to be protected. This can be done through applying for a patent.
Reputation can take a long time to achieve but will become invaluable to a business. A reputation can be achieved through developing a particular image. It may come from:
- keeping prices low ( like Kwik Save)
- appealing to the affluent ( like the Ritz)
- ensuring top quality ( like Rolls-Royce)
- having fun ( like Tango)
- being sensible ( like Clarks)
Good relationships are very important in gaining a success in business. Everyone responds to being treated well by others. Employers will look to build up a valuable relationship with their employees. Businesses will aim to build strong links with their suppliers and customers. During economic growth relationships are easier to maintain. During more difficult times relationships may be stretched.
A good relationship can be achieved when:
- employees know that if they show commitment, they will be fairly regarded
- customers know that their purchases are good quality and that they can
return them without augment
- suppliers know that, provided they meet the standards required at a price that
makes sense in the stores, they will be fairly treated.
There are people who combine the necessary attitudes and skills to run a business, these are called Entrepreneurs. However, they need to be prepared to take a risk.
Talking about innovation, The Body Shop is a company founded on nontraditional values and beliefs which has grown to be a major global player in the cosmetic and beauty products industry. Defying industry traditions of expensive packaging, massive advertising, and retailing through department stores and pharmacies, the entrepreneurial Anita Roddick created a company that rejects all of these principles.
In creating The Body Shop, Ms Roddick drew on her experience with fishing and farming communities and women’s rituals all over the world. She dedicated her company to human rights, environmental activism, animal rights, and community trade. She is a member of The Non-Violence Project Foundation and the Social Venture Network-Europe. She is also a patron of Body and Soul (an organization for women and families with HIV and AIDS), and STAR (Skin Treatment and Research Trust). And as it was said in Ernst & Young LLP, “Anita Roddick is a pioneer, an innovator, a role model, and an Entrepreneurial Champion”.
Recently, The Body Shop launched its newest product range in March 2000. The Hemp Range spurred a huge drug-related moral dilemma. The Body Shop’s new product range gained substantial media coverage.
This particular product launch has had serious consequences for The Body Shop as it was fairly risky strategic action to take. As said by Anita Roddick, “We are taking risk again. Hemp is high in protein, essential fatty acids – and confusion! And it’s back! Demystifying hemp and championing hemp framers all over the globe while trying to rid the world of dry skin is FUN!” The new product range was only expectedly going to trigger a degree of controversy but The Body Shop used this to their advantage. The company stated that their goal was not to promote the use of drugs but quite the opposite. The Body Shop further hoped to gain government’s support for the hemp farming industry.
The five hemp products then quickly became UK best sellers for The Body Shop and made up 5% of the company’s UK turnover only a month after its launch in March 2000.
Doing my research, I made an experiment with the recognition of The Body Shop’s logo (graph 1). I showed it to 30 people of different age and gender. As a result, 85% of all asked recognized the logo, and just 15% didn’t. This suggests that The Body Shop has managed to gain a very good reputation and popularity within the society.
Also, The Body Shop was the first international cosmetic company approved under The International Standard on ‘Not tested on Animals’ and in 1990 began its ‘Against Animal Testing’ campaign. In 1996 this campaign evolved the ‘Ban it’ and the largest animal testing petition was presented to the European Union. The petition has been signed by 4 million people and achieved a ban on the sale of animal tested cosmetic products and ingredients from June 2000 depending on the development of alternative testing. The Body Shop itself does not test its products on animals and ensures that any of their purchases from suppliers are also not tested on animals.
The Body Shop has also fought against the illegal trade of endangered species of the ‘Save the Whale’ campaign in association with Greenpeace and a 3 million signature petition demanding a tightening on laws against the trade. Additionally, The Body Shop and its franchisees take part in fundraising for wildlife preservation.
Products of The Body Shop are instrumental in raising awareness of animal protection issues and carry messages to customers and even suggest actions that can be taken.
Graph 2 suggests that another feature that promoted a good reputation for The Body Shop is their quality products. To find out people’s opinions, I went to a local Body Shop (Wood Green) and asked customers to fill in my questionnaire (see appendix). They were asked to put the reasons for shopping at The Body Shop in order from 1 to 5 (where 1 is the highest mark). As a result, the 35% of 25 customers put ‘quality products’ under number one. This suggests that The Body Shop managed to achieve a good reputation by producing good quality products.
Through a number of campaigns, The Body Shop reached their goals set for positively changing and improving human & civil rights. This shows that the company strategy is successful in meeting its own criteria: to promote profits with principles.
In 1989, The Boy Shop increased support for the Brazilian Yanomami’s survival as they were threatened by the destruction of their lands by timber and mining companies.
In 1995, when Ken Saro-Wiwa and eight other Ogoni activists were sentenced to death, The Body Shop tried to save their lives. Unfortunately, the executions of the activists took place later that year. However, The Body Shop redoubled its efforts on behalf of the Ogoni and went on to campaign for the Ogoni 19 in 1996/97 (the campaign spanned 17 countries). This campaign went on to win the Best International Campaign of the Year at the RP Week Awards in the UK.
Some facts about The Body Shop working with Women:
- In 1995, a collection of over a million petitions against the abuse of women’s rights spanning 25 markets.
- In 1995/96, raised awareness of domestic violence of women and raised government provision for support services and refuges for female victims.
- In 1997, the ‘Ruby’ campaign was successful in raising awareness of the self-esteem for women; the campaign even won an award.
SUMMARY
To sum up, The Body Shop has managed to create and maintain a strong competitive advantage through:
- Innovation, by rejecting all traditions in a health and beauty productions, by creating new types of products, and having a very different principles in their business;
- Reputation, that was successfully achieved by introducing their values, e.g. ‘against animal testing’, ‘protect our planet’, etc.
BIBLIOGRAPHY
Nuffield ‘Economics & Business Students Book’
‘Business As Unusual’ by A.Roddick
‘Anita! The Woman Behind The Body Shop’ by Older and Lisa Kopper
APPENDIX
GRAPH 1
GRAPH 2
SAMPLE QUESTIONNAIRE
* Issues like ‘against animal testing’ or ‘protect our planet’
