Evaluate Body Shop’s International Practices with Suitable Recommendations
1 Executive Summary
This essay examines the case of Body Shop Inc, and the ways it has been sustainably undertaking international business practices. Body Shop has been able to increase its international operations and uses several benchmarks to evaluate the performance against third party standards such as the UN Global Compact 10 principles. Sustainability and ethical governance are needed for any firm today, and this work examines the case of Body Shop as it aims to fulfil many of these needs of its customers to ensure a sustainable approach to business. The work concludes that Body Shop needs to improve their Fairtrade use, as this could be a particular niche that could provide the company with sustainable growth and improvement.
1.1 Introduction of The Body Shop
Body Shop has developed over 2500 stores (Dhikriyah and Sukresna, 2021, Dwita et al., 2020), and now has a presence in over 60 countries with a wide product range. The first outlet was founded in 1976, and the company has grown significantly in the years since. Body Shop is the second most trusted brand within the UK, and the founder Anita Roddick has received many awards for ethical business practices (Purkayastha and Fernando, 2017, Wheeler, 1993). Body Shop has been the embodiment of many different international practices, and this has allowed the company to increase their sales as well as international repute (Fiksel, 2017, Fiksel et al., 1999).
Body Shop has been instrumental in supporting the Corporate Social Responsibility (CSR) program. This has been undertaken by a program that improves the self-esteem of users (Dhikriyah and Sukresna, 2021, Dwita et al., 2020). The company attracts customer support by giving consumers choices to invest in fair trade, and pay extra for this initiative (Epstein et al., 2018, Genoveva and Levina, 2019). The company attracts customers by using the global volunteering program. This has allowed the company to attract customer support, and ensure that the different initiatives can be helped by different initiatives which can lead to long term support. It is important to consider is that Body Shop has worked with its employees to create a positive environment, where proper support and training for suitable development is given to all suppliers (Epstein et al., 2018, Genoveva and Levina, 2019). The Revenue for Body Shop has been increasing steadily, as shown from Figure 1 below, with over 805 million GBP in 2019. This shows that the company continues to grow, despite a highly competitive business environment.
2 Evaluation of Body Shop concerning UN Global Compact
The UN Global Compact factors outline 10 main principles which can lead to sustainable business practice for any company (Annan, 1999, Compact, 2006). According to the principles of the UN Global Compact, any corporate sustainability would normally start with the value system of a company, and ensure that a principles-based approach is undertaken for completing any business (Kell, 2013, Masoud, 2017). The fundamental responsibility of human rights, labour and corruption are met (Rasche, 2009, Voegtlin and Pless, 2014). Therefore, any responsible business such as Body Shop will ensure that they integrate the UN Global Compact into the different strategies and values of the company can lead to a long-term competitive advantage for the firm (Compact, 2006, Williams, 2004).
2.1 Human Rights
Companies such as Body Shop need to protect the human rights needs of their employees, by ensuring that they can support employee needs (Orzes et al., 2020, Rasche, 2020). The internationally proclaimed human rights conventions must be protected at all times, as this will ensure that no human rights abuses can take place. Body Shop has been instrumental in ensuring that all the human rights needs of its employees are fulfilled (Korovkin, 2020, Dhikriyah and Sukresna, 2021). Employees must not be abused, and their basic rights protected, Body Shops ensures that it does not hire any child labour through its subsidiary production companies.
2.2 Labour Issues
A second main principle of the UN Global Compact is based on fair labour rights. Companies need to ensure that they can protect the labour rights, and ensure that minimum living wages are paid to ensure that the employee needs are addressed (Fiksel, 2017, Kell, 2013). Body Shop has ensured that the labour issues are addressed by ensuring that employee needs are addressed (Korovkin, 2020, Dhikriyah and Sukresna, 2021). Body Shop uses a fair management policy, which has to be addressed over time to ensure long term support for employees. In particular, Body Shop has been ensuring that employee salaries are above the minimum wages, and this will allow the company to address the employee concerns, as highlighted in the UN Global Compact literature (Andrews, 2020, Bjola, 2020). Allowing labour issues as a benchmark for sustainable growth of the company is also important to take into account, as this improves the image of the company in the mind of the consumer. The company also allows collective bargaining, as this also leads to safeguarding the labour rights (Pécoud, 2021, Rasche, 2020). The labour for Body Shop is also an important human resource potential, which can allow the company to have a clear confidence-building measure for themselves. This is important to take into account, as through the use of flexible labour practices, the company will be able to attract new and high-quality employees.
2.3 Environmental Issues
Another main focus on Body Shop has been on environmental issues. The company has placed this as a paramount issue, which needs to be addressed. Companies must continuously evolve, to ensure that the company can safeguard the wider environment. The UN Compact 10 stipulates that companies must undertake a precautionary approach to safeguard the environment (Iwaki, 2020, Lim, 2021). In this regard, the ability to develop and understand the different initiatives must also be undertaken for the safeguarding of the environment (Pécoud, 2021, Rasche, 2020). Body Shop has been instrumental in ensuring that it used recycled packaging, which increases the green credentials for the company. The company has also ensured that all packaging is recycled after use, and encourages customers to use recycling. Several recycling plans have been implemented by Body Shop, which allows the customers to decrease their carbon footprint (Korovkin, 2020, Dhikriyah and Sukresna, 2021). Another main selling point for Body Shop has been rallying cry against animal testing. This has allowed the company to stay at the fore of banned animal testing of cosmetics, and present a positive image in the mind of the consumer.
The company has also been at the forefront of Fairtrade. This has ensured that the environment is protected, as the farmers are getting a due share of their profits, and therefore they are less prone to harming the environment. Such a holistic approach towards the consumer has allowed Body Shop to increase its output, while also delivering high-quality products for the customers (Korovkin, 2020, Dhikriyah and Sukresna, 2021). The body shop has also been working with its customers to recede their carbon footprint. The company has continuously worked with the consumers to reduce packaging. This has ensured that most of the packaging which is used by Body Shop is made from recycled materials. The use of technologies is the main proponent of the UN Global Compact 10 principles (Iwaki, 2020, Lim, 2021), and allows companies to adopt only those technologies which are needed for the long term good of the environment.
2.4 Anti-Corruption Practices
Another major issue which the UN Global Compact principles highlights is the anti-corruption practices to be followed by a company (Martínez-Ferrero et al., 2020, Orzes et al., 2020). Body Shop only works with those suppliers who are transparent and overboard. This has created several problems for the company, as its growth has been hampered in some markets such as India, where they were not able to get the approvals promptly. However, undertaking this particular practice has ensured that the company does not face any scandals, and is consistently seen by consumers as having a positive image.
3 Recommendations for Body Shop
International management and marketing have been increasingly challenging for companies around the world, as varied cultures and requirements exert extra pressures on organizations (Orzes et al., 2020, Rasche, 2020). In the case of Body Shop, the company has been able to excel by having a socially responsible agenda for management and marketing (Dennis et al., 1998, Epstein et al., 2018). This has allowed the company to grow and improve over time and leads to improvement in the way they can deliver sustainable growth. However, the changing sustainable direction for companies needs to ensure that it can be followed by companies such as Body Shop (Korovkin, 2020, Dhikriyah and Sukresna, 2021).
One of the main weaknesses of Body Shop has been that it was taken over by Loreal in 2006. This initially dented the image of the company (Purkayastha and Fernando, 2017, Genoveva and Levina, 2019). However, the company has worked on its corporate image by ensuring that it undertakes environmentally friendly policies, which can increase its international management practices. The use of the UN Global Compact principles by the company has also allowed it to attract new customer support. To improve its image, The Body Shop needs to ensure that it can work closely with its suppliers. Any supply-based scandals, where employees or production facilities are not being fully addressed will be a major disaster for a company such as Body Shop (Imaningsih, 2019, Dwita et al., 2020).
Another action that Body Shop must undertake radically is to ensure that it can move to online-only selling. This drastically reduces the carbon footprint of a company, while also ensuring that lower costs can be transferred to the customers (Orzes et al., 2020, Rasche, 2020). The current store setup of the company is too expensive, and highly inefficient, as the company is unable to reduce the carbon usage from so many stores. This move will be highly radical, and the company will be able to increase its international sustainability as it will be present for a larger number of international buyers (Purkayastha and Fernando, 2017, Genoveva and Levina, 2019). By developing this particular method, the company will be able to develop and understand the challenges that they face, and this will lead to the improved financial performance of the company.
Another major recommendation from the analysis of the Body Shop business model is that the focus is on fair trade. The company must ensure that all the products that it produces are bought under the fair-trade model. This will create a unique competitive edge for the company, leading to a positive image for the consumer. For example, in the case of Ben & Jerry’s ice cream, a focus on fair trade has allowed the company to grow exponentially in the international market. Ben & Jerry’s is now one of the biggest producers of premium ice-creams and uses fair trade ingredients in all their ice cream products. This has allowed the company to create a niche image in the mind of the consumer. The Body Shop can use Fairtrade across the board to gain a competitive edge over its competitors and increase customer satisfaction levels (Purkayastha and Fernando, 2017, Genoveva and Levina, 2019).
In an international market, companies increasingly need to focus on having a suitable business model, which can fulfil the requirements of both the shareholders and the wider stakeholders. This case examined the case of Body Shop. Body Shop has been instrumental in attracting customers and creating a niche for itself by undertaking CSR activities, and ensuring that employees and other key stakeholders are addressed reasonably. This has allowed the company to grow in over 60 countries. This essay also nosed the UN Global Compact 10 principles to evaluate the way Body Shop has been performing. One of the main conclusions from this research is that Body Shop needs to improve its output by ensuring that it can focus on Fair Trade only. This will ensure that the company can enter a particular niche, which allows it to attract a new customer base. This will also increase the international appeal of the company, as fair trade will in the future be a major element for a sustainable company. Ensuring that the employees and producers of the company can get a fair price for their products can be used as a major selling point for Body Shop