SWOT Analysis of Body Shop’s retail outlet in Canada Water
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.
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.
• 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.
• 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.
• 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.
• The male grooming products – The increase in the usage of male grooming products indicates that there is a demand on this particular niche market. Therefore the supply of a wider range of products for men can increase overall sales.
• Brands comparison – L’Oreal can prove to be harmful for Body Shop’s reputation. The public perception of Body Shop as ethical can be altered due to the fact that L’Oreal is considered to be unethical.
• Competition - Body Shop can face competition in Canada Water if a company that also produces natural based products e.g. LUSH, decides to open an outlet inside the shopping centre.
Preserving a good image:
• The management should inform the customers that Body Shop International is still following their own policy, even though if it has entered the L’Oreal Group, so as to preserve a good positive image.
• Faster services should be provided to the customers either by hiring more employees or by improving their own efficiency so as to achieve better financial outcome.
The retail outlet in Canada Water has gained a competitive advantage by being the only shop that sells natural-based products in the area. Customers prefer it due to the fact that it has established its brand name for over 20 years and their products are unique. The introduction of a new range of products has given the opportunity to attract a new segment of the local market, men. By being under the umbrella of L’Oreal, it can take advantage of their marketing strategy and their reputation in order to increase their sales. There is, though, the possibility of being compared which is going to have the opposite effect. The absence of a competitor near or inside the shopping centre, contributes to their monopolization in the local market. However their service is slow and it should be improved in order to avoid future fall of sales or in the number of clients.