SWOT Analysis of Body Shop’s retail outlet in Canada Water
Executive summary
Body Shop International (Body Shop) is a multinational company which is mainly producing ecological skin and hair products. Their products are solely based on natural ingredients and manufactured according to an ethical code which is opposed to animal testing. The cosmetics franchise is considered to be one of the biggest around the globe with a well established reputation in 54 countries. L’Oreal, the dominant company in the beauty industry, acquired Body shop in 2006. Although Body Shop has become a subsidiary of L’Oreal S.A it still acts according to its own policy, values and ethical code. The acquisition has solved Body Shop’s financial problems and has provided the means for expansion to a bigger market share.
Introduction
This report will be a SWOT analysis of Body Shop’s retail outlet in Canada Water. It will mainly focus on:
• Strength, weaknesses, opportunities and threats of the particular retail outlet.
• What was the effect of the acquisition on the particular branch.
Findings
Strengths
• Brand Loyalty – Body Shop is greatly dependent on its brand reputation which is a critical factor in sales. Due to its unique products, it has come out to be seen as one of the most environmentally friendly retailers.
• L’Oreal’s support – By being a subsidiary of L’Oreal, Body Shop appears to have an increase in sales. Furthermore, L’Oreal’s experience in advertisement and marketing can boost overall sales.
• Niche marketing – Body Shop targets a niche market. By stating that it is not testing its products on animals and by appearing to have an ecological profile, it has appealed to customers with ethical issues. Being the only shop in the shopping centre that sells ecological products, has given it advantage in the local market.
• Charity support - Body Shop provides financial aid in charities by giving small amount of money from particular products they sell. Body Shop’s support in local charities and non-profit organisations enhances its image in the local society.
Weaknesses
• Slow service – Body Shop’s location, inside a shopping centre where it is always crowded, in combination with the fact that there is inadequate personnel results in slow service for the customers. Customers may be discouraged and might prefer a retail outlet in a central location.
Opportunities
• Product development – Body Shop can take advantage of L’Oreal’s experience in research methodology and efficiency in order to improve and develop their own existing products.
A certain value is put on commodities and services that in turn promote “consumption of products that encourages conformity to feminine beauty ideology”. (Johnston & Taylor, 2008) Media and advertising also immensely influences the way one looks at themselves and how much they compare their own beauty to the models on TV screens and in magazines. Through advertising, Dove promotes a movement to minimize institutionalized and structural gender inequality, and encourages the practise of self-care. Although its is makes great business sense, it is clear that their is a prioritization of commodity purchases above the overall message which creates brand loyalty. Dove shows mixed messages early on in their campaign as they are “telling women to buy creams, "slim" down, put on a bra and generally engage in… the "body project" (Essig, April 22, 2013) and “young girls started to worry far more about cellulite on their thighs than goodness in their hearts”.
The literature reviewed to produce this report consisted of different online trusted sources, and official data from Loblaw Canada Limited website. Tangible and intangible assets have been taken into consideration, as well as the company’s stated goals, vision, mission and an overall structural review of the company. In order to properly conduct the analysis of Loblaw Canada Ltd., some well recognized tools were used, such as Porter’s Five Forces, SWOT analysis and PEST. Online journals, additional publications, and Loblaw’s annual reports were consulted throughout the report producing
There has been some controversy regarding L’Oréal Canada and their use of animal testing in their cosmetic products. For certifications regarding safety, we currently possess 86% of manufacturing facilities that are either OHSAS 18001 or VPP certified. (L’Oréal Canada, 2014) Safety is a priority for us at L’Oréal Canada to ensure that our products are safe for our consumers so that they can enjoy the beauty of our cosmetic products. Health Canada has stated that science has not advanced to the point where they feel comfortable banning animal testing in the cosmetic industry, but that animal testing is not required for cosmetic products. (Bendall, 2011) However, the European Union has recently passed a Cosmetics Directive in 2009, which bans the use of animal testing in the cosmetic industry. The Cosmetics Directive bans the testing of finished products, ingredients within a product and the marketing of a product that has been tested on animals. (European Commission, 2014) As a result of these changes in Europe, it is important for L’Oréal Canada to consider alternative methods to animal testing for business to continue with countries in Europe, and so that consumers will feel more positive about purchasing our products due to them being cruelty-free.
The company had to be the second largest retailer shop in the US; it has many advantages that come along. The customers well acknowledge the company and its brand have been well established.
...e over ten million customers, providing over 500 brands and thousands of products. For added income, in December of 2012, the company launched their own supplement line taking into account all the positive and negative reviews of existing brand reviews, to create a product consumers like, with the ability to offer lower prices by eliminating the middle man, selling directly from their site. They advertise their personal product line all throughout their site, so that visitors leaving the site without seeing their product are rare. They also provide their own clothing and accessory line, offering customers top of the line products for low prices, which serves as a way to advertise for a profit. Strategically, Bodybuilding.com uses top Youtube.com famous professional and inspirational bodybuilding models, displaying their product on recognizable faces and fit bodies.
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Dove is a personal care trademark that has continually been linked with beauty and building up confidence and self-assurance amongst women. Now, it has taken steps further by impending with a new advertising strategy; fighting adverse advertising. And by that it means contesting all the ads that in some way proliferate the bodily insufficiencies which exits inside women. Launched by Dove, the campaign spins round an application called the Dove Ad Makeover which is part of the global Dove “Campaign for Real Beauty” what has been continuing ever since 2004 and times print, television, digital and outdoor advertising. As Leech (1996) believed,” commercial consumer advertising seems to be the most frequently used way of advertising.” In which way the seller’s chief goal is to sway their possible spectators and attempt and change their opinions, ideals and interests in the drive of resounding them that the produce they are posing has a touch that customer wants that will also be in their advantage, therefore generating false desires in the user’s mind. Dove is vexing to influence their viewers to purchase products they wouldn’t usually buy by “creating desires that previously did not exist.”(Dyer, 1982:6)
L’Oreal is the largest beauty company in the world and in the past 100 years that it has expanded, it has supplied to 130 countries with offices in 58 different countries. This global company is the number one premium cosmetic product in the world today and has taken the core and beauty of people’s everyday lives since 1907, the beginning of L’Oreal. The superior leadership of a guy named Eugene Schueller started this strategic company with basic products such as hair care and also the first man-made hair color product. Five years later you could find these products in Austria, Italy, and the Netherlands. In 1934 Eugene invented the first mass market of soap less shampoo and this led the success of L’Oreal in the country of Europe which soon recognized them as the leader in body care and hair coloring products. Finally soon after World War II L’Oreal moved into the United States and the company seemed to change. When L’Oreal expanded the competition was more involved and more growth was needed in order for the company to be more successful. With problems like this, the strategy and planning that has been applied in L’Oreal has been huge for the success of the company. L’Oreal realized they needed to expand in other fields of the beauty market and target markets in order to stay alive and successful. This would mean that L’Oreal would need to acquire other companies as part of their expansion and through this they have kept the constancy of the leading company with acquisitions of many small companies. Finally in the 1980s they started their globalization into new markets all around the globe by acquiring new companies that would form the cosmetics that we know today. Although the role of acquisitions has never been the main focus of the company, internal growth and strategy was the number one reason for L’Oreal becoming such a big name. The main strategy was to adopt new companies and expand it from within believing that the brand could be taken globally and benefit their overall brand portfolio. The main role of acquisitions was to increase and lengthen the internal growth rate. L’Oreal started acquiring companies from the beginning of their name. They started with the basics of their own brands such as L’Oreal Professional, L’Oreal Paris, Kerastase, and Club des Createurs de Beaute.
The growth expansion of the firm was too rapid and sales, margin and stock prices began to decline as a result. The growth rate quickly declined as competitors such as Bath & Body Works flooded the market. This decrease in market share led to poor decision making by the owner. The Body Shop quickly saturated the market and began to dilute their brand name. It quickly became a mass-market line franchised to every suburban shopping mall and street corner.
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