CASE ANALYSIS: THE BODY SHOP INTERNATIONAL

Submitted in partial fulfilment of the requirements of the course

Communicating Corporate Reputation

Submitted to

Instructor – Prof. Asha Kaul

Academic Associate – Ms. Khushboo Vachhani

Submitted by

Yadhu Gopal G [19077]

Date of Submission

17th July, 2020

INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD

1. Central Problem
 The success of the Body Shop in the US is doubtful, given the fact that the core ideals
under which the firm thrived in the UK are not something that can resonate with the
crowd in the US.
Environmental issues have never been a huge concern, and its advocacy by the Body
Shop is perceived a bit too political by the US market. For a customer not bothered by the
environmental concerns, the Body shop might seem like another company with marketing
gimmicks.
The ‘no advertising’ policy of the firm that was practiced in the UK market might not
work in the heavily advertised US market. Many of the other reputed brands in the
industry are releasing their own line up of ‘natural’ products with a revamped look and
marketing strategies posing very real threats. The fact that the product is not available in
malls till now and the legal hurdles that the firm might face in the US market are other
huge problems.
Internally, the firm also has an issue of leadership, or lack thereof, being excessively
reliant on the founder Anita Roddick. This is on top of the present inability of the firm to
inculcate its core values across its rapidly growing employee base.

2. Key Stakeholders and their role in building a reputation

a. Anita Roddick: Being the founder of the firm, Anita had the most crucial role to play
both in forming a reputation for the firm and upholding it. Anita had the
responsibility to make sure that the ideals were imbibed by all of those who were
employed under the firm.

b. Employees of the firm: Employees are the key internal stakeholders in maintaining
and improving the corporate reputation. Here, employees were selected and trained
so that they identified with the values of the firm and were expected to reflect these
values to the customers. Employees are also expected to communicate to the higher-
ups when they feel that the culture in the firm is being lost or that there is a growing
disconnect between the upper and lower levels.

c. Customers: Customers are the primary external stakeholders of the firm. In Europe,
apart from the fact that customers were familiar with the firm from its inception, the
all-natural products, transparency, their vocal nature on environmental issues, and
 the actions undertaken by the firm in line with the ideals they preach has given an
excellent reputation to the firm. Without advertising, the positive word of mouth
carried by the customers is what has helped the firm grow.

d. Environmentalists: Although the Body Shop tries to project the image of an

environmentally conscious firm, environmentalists play a pivotal part in being part of
such movements and reassuring the public on the authenticity of such actions.

3. Steps taken by the firm to address the issues

Regarding the expansion of the firm into the US market, Anita has considered going with
something a bit less political. This will work in favor of the firm since it is known that
many customers in the diverse US market may not mind paying a small premium if they
see that it goes for a good cause.
The firm removed the “Against animal testing” logo and dropped the refill service, which
will reduce the legal hurdles it may have to cross.
Anita has also realized that it might be quite impossible to succeed in the US market
without any advertising, especially when the major players in the industry have come up
with their own ‘natural’ line of products.

4. Recommendations for the firm

a.Advertising, but minimal and targeted at awareness: The simplicity and quality of
the all-natural products are what drove the customers primarily to the Body Shop
stores in the UK. In the US, where the customers are diverse, the firm can resort to
focus more on the all-natural, sensitive-skin-friendly quality of the product to
generate a loyal customer base. Environment friendliness can be mentioned as an
added benefit. It is advisable to stick to a single major environmental cause than
wavering between many.

b. Availability of the products: Customers in the US might expect the product to be

available at more places if they are seeing the product being advertised. The firm
should make the product available at more areas such as malls where the
customers might expect to see them.
 c. A strong leadership program within the firm : It is imperative that the firm
establishes a plan to find the best among the existing employees who value what
the firm stands for and can carry it forward after Anita. Alternatively, someone
from outside who fits into the culture can be recruited for the same.

d. Inculcating the values across the employee base: As the firm grew, it became
difficult to make sure that all the employees imbibed the core ideals upon which
it was formed. The training and recruitment system needs to be revamped to
include an evaluation system to ensure that this is taken care of.

5. The theory associated with the scenario at hand

a. Importance of gaining corporate reputation: Success of a company is no longer
measured only by the financial parameters, but also by its reputation. This
reputation provides added benefits to the firm such as building trust (thereby
creating a loyal customer base), giving legitimacy to the firm, enables selling
products at a premium price, acts as a signal of success, and helps make decisions
that are accepted by the stakeholders. It can be seen that the Body Shop achieved
all these in the UK market.
b. Corporate reputation as a combination of corporate identity and image : For the
Body shop, the corporate reputation can be considered as the combination of the
corporate identity, the philosophy of all-natural products, and the corporate image,
where they partnered with various NGOs. This also goes to show that the firm’s
professed, projected, experienced, manifested, and attributed identity has been
coherent and has helped in building its reputation.
c. Communicating the corporate reputation: As far as communicating the corporate
reputation is concerned, in the UK market, the firm has built a relationship
through mutual trust, has engaged the consumers by being vocal about what they
stand for and has maintained transparency by letting the customers know what the
products are made of.
d. Maintaining corporate reputation through culture: Having a culture that values
reputation can result in a better firm as perceived by the employee, thereby
creating an organization where employees value the reputation. It can be seen that
 the culture of the Body Shop, with minimal bureaucracy and systems like red-
letter, was appreciated by the employees, thereby leading to a superior reputation.

6. Conclusion
Although Anita Roddick was able to create something that stood out as an outlier,
performed superbly, and set a benchmark in the industry, she was not able to
consistently maintain it as the firm grew. It is hence imperative that any business
provides due care to all of its facets so that the ideals are imbibed across, and the
company and its reputation continues to grow.

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