Report: Evaluating HR & Financial Strategies of The Body Shop Company

This report provides a comprehensive analysis of The Body Shop's human resource (HR) and financial management strategies. It begins with an introduction to the company and its global presence, followed by an examination of its HR strategies, including recruitment (open hiring model) and training and development. The report then delves into the financial management strategies, analyzing the company's financial statements, including profit and loss and balance sheets, and assesses its financial performance. A SWOT analysis is included to identify internal strengths and weaknesses, as well as external opportunities and threats. Finally, the report concludes with recommendations for improvement and an evaluation of which strategies contribute most significantly to The Body Shop's business success. The report is supported by references and an appendix with relevant financial data.

REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Human Resource (HR) Strategies of Body Shop (BS) ..............................................................3
Financial Management strategy of BS........................................................................................4
SWOT analysis............................................................................................................................5
RECOMMENDATION...................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
APPENDIX......................................................................................................................................9

INTRODUCTION
Human resource management is important part of organization that aid company to
recruit, retain and monitor employees. Financial strategies are methodologies adopted by
company to manage its monetary resources. In current scenario, it becomes crucial for firm to
adopt effective plans relating to personal as well monetary resources for attaining competitive
advantages. The absenteeism of these strategies can lead to failure of organization. The chosen
company in present report is Body shop is international British organization. It deals in skin care,
perfume and cosmetic products. Firm has 1000 products range and 3000 stores around the globe
in 65 countries. The parent firm of Body Shop is Natura Co. The organization has covered good
market share in the industry. Present report will include current human resource strategies
adopted by company. In addition to this, it will comprise the financial management approaches.
SWOT analysis of organization will be included in present report. Recommendation regarding
improvement for prevailing situation will be included in report.
Human Resource (HR) Strategies of Body Shop (BS)
Employees are important business part so ensuring that right type of candidate is selected
for appropriate position. Additionally, it decides the level of efficiency an employee will provide
by completing specified roles and responsibility. BS focuses properly on its HR strategy as this
decides success or failure of firm (Alghamdi, 2020). The current method for managing &
monitoring its subordinate is selected by company by proper analysis and evaluation so that
positive outcome can be derived.
Recruitment scheme
Body shop adopts plan that is fair & ensure that employees have high morale. It has very
simple approach for recruiting candidates for certain position. It approaches that is piloting by
BS comprise open hiring model which requires answer of only three question. It has
implemented this method after implementing various experiments at the end of 2019. Candidates
those whole apply for position are placed on the basis of FIFO method that is first come &
served (Dudin and et.al., 2017). Factors that are considered by body shop for recruiting
employees is checking eligibility and basic requirements like personality, way of
communication, etc. The three questions on which BS focuses are : is candidate authorized to
work in US?, can prospect stand for 8 hours and fit to 50 founds or not?

Successful and impressive answers given opportunity for working with organization. For
instance- the report of BS has analysed by reviewing outcome occurred through this open hiring
via comparing it with previous mode. This has reduced employee turnover rate from 38-14%.
Training & Development (T&D)
By implementing unique and convenient open hiring approach enables organization o get
interested candidate for every position. T&D method of BS pay attention on increasing
capability, skills and knowledge of subordinates. It is basically exerted by firm through
identifying requirements that are lacking for improving sales personality of candidate for making
appropriate regarding selected position.
Body Shop is one of the activist global brand whose aim is to obtain such types of staff
that can increases both productivity as well image of company. For this purpose company makes
objectives to improve basic skills, attributes and knowledge of staff. It is executed by identifying,
defining, developing, implementing and evaluating lacking areas (Sen, 2020). Subordinates are
supported by human resource management to achieve their personal goals along with business
overall objective. With respect to this, successful completion of delegated roles, responsibility
and authority is rewarded through packages of skin care, perfumes, etc. This creates
belongingness, involvement, commitment, and loyalty attributes among employees. It has
resulted into increased employee turnover rates from past period that gives positive impact on
goodwill of brand.
Financial Management strategy of BS
It involves planning, adjusting and evaluating long term objectives of organization. This
is exerted by Body Shop through formulating effective approaches that can enhance productivity,
profitability by ensuring optimum utilization of financial resources. It is management
responsibility to allocate required amount of fund to all segments for smooth business
functioning (Wahyuni, 2020). Financial position of Body Shop can be assessed through
examining its financial statements and balance sheet.
From the analysis of profit & loss account it is interpreted in manner so that strategies
implemented for monitoring can be identified. Revenue is increasing from 9.83 to 14.44 million
that reflects growth of Body Shop. It has also focuses on increasing margin of its gross profit
from 70.45 to 72.08% The approaches utilized by organization has lead incline upward
directional movement regarding cost of goods sold in same sales proportion. Net income from

2017 to 2019 has declined due to various factors such as non-availability of interest income,
increase in tax & return on debenture expenditure.
By evaluating balance Sheet of BS it is criticized liquidity position of company has
improved as compared to previous period. Additionally, it has enhanced in 2017-2019 year.
There are several elements available in balance sheet that has unique identity for representing
certain factor of company. With help of all these elements it becomes easy for business to derive
suitable course of action which can be implemented for required improvements. In balance sheet
modification can be seen by comparing figure shown in appendix. It can be stated that proper
allocation of fund is not exerted by Body Shop for managing its debt aspect. The debt to equity
& assets ratios are more than previous stated years. The current assets turnover ratio is
decreasing from 2017 to 2019 by 1.63 which shows negative sign as more the figure greater
would be efficiency (Ghadamyari, 2020). With respect to this, it is more than ideal ratio is 2.5 so
shown figure is exceeding which can be considered better performance than average. Inventory
turnover ratio is showing upward directional movement which shows that sales of company thats
good in industry. The 3rd year trend of Body Shop is positive that presents utilization of effective
financial strategies.
Approaches utilized by BS for continuous smooth functioning and proper allocation of
resources comprise financial forecasting, estimation of sales level, company debts and sensitivity
analysis (Pepple and Ejiogu, 2021). Examining companies financial policies for assumptions of
utilized strategy is important. In addition to this, it plays role in determining performance
indicator in turn procedure of production and sales can be assessed. The hybrid forecasting
budgeting method is implemented for managing income and expenses. Evaluation of proper sales
target helps HR leaders to determine appropriate strategy for managing adequate system for
providing guidance to subordinates (Pepple and Ejiogu, 2021). Sensitivity evaluation works as
indicator for company's success in turn positive trend can be seen through implementation of
appropriate decision regarding capital budgeting, structuring and risk management.
SWOT analysis
It helps organization to identify its internal and external factors that influence growth of
company. The internal factors comprise strengths and weaknesses. In addition to this, external
environment provide assistance in evaluating opportunities and threat available in market.

Strength
 It has huge franchise network and wide
range of products
 Positioning of products is the biggest
strength as it attracts customers by
utilizing natural ingredients
 It has goo good brand value because of
fulfilment for its social responsibilities
(SWOT analysis of body shop, 2020).
 Good supply network that ensures
sustainability through focusing on
crucial problems.
 Expertise guidance from parent
company is another strength.
Weaknesses
 Low marketing and advertising efforts
 Franchising results into more
interference of proprietors in
operational activities.
 Pricing strategy lacks research and
development before setting value for
products due to cut-throat competition.
 New law regarding animal test
products enhances competition.
Opportunities
 Increasing alertness of green practices
has increased the sales.
 Enlargement of market share can be
obtained through adopting social media
and web access for selling goods.
Threats
 Fierce competition is prevailing in
cosmetic industry
 Chemical legislation threats
distribution channel can heavily impact
operational activities.
 Economic downfalls decreases
customers purchasing power that
hamper sales of skin care products
RECOMMENDATION
 It is recommended to Body Shop for targeting customers segment of higher income
group, urban buyers, conscious people about health can increase sales even in economic
downfall times. Additionally, these customers are considered to more conscious about
health so avoiding it impacts them both physically and mentally.
 Enhancing effectiveness of existing marketing and promotionally strategy can increase
the productivity and sales. This can be exerted by creating awareness regarding

characteristics and benefits of ingredients used It is directly linked with profitability that
can modify financial and HRM practices by adapting advanced technology.
 Analysing goals, preparing financial budgeting, proper allocation of resources, etc. are
some the financial strategy that can help Body Shop to build human capital and reach
objectives in effectual pattern.
CONCLUSION
From the above report it can be concluded that HR plays important role in achieving
organization objectives. The present report has given emphasis on current HR approach of Body
shop which is open hiring model. It helps firm to obtain suitable candidate by saving time,
efforts, and resources. In addition to this, financial performance of BS has been reviewed in
current case study. It has reflected positive outcome in terms of revenue, profitability that is
showing upward movement trend. Present case study has described SWOT analysis for gaining
ideas for improvement in lacking areas.

REFERENCES
Books and Journals
Alghamdi, S. A., 2020. The Impact of HR Strategy on Organizational Effectiveness. American
Journal of Theoretical and Applied Business. 6(4). pp.91-97.
Dudin, M. N and et.al., 2017. Ensuring Competitiveness of Agro-Industrial Enterprises Based on
Developing the HR Strategy. Scientific Papers-Series Management Economic
Engineering in Agriculture and Rural evelopment. 17(4). pp.103-112.
Ghadamyari, M., 2020. Government debt to commercial banks and financial fragility. Financial
Management Strategy. 8(4). pp.213-234.
Pepple, D. and Ejiogu, C., 2021. Income Statement and Balance Sheet. Financial and Managerial
Aspects in Human Resource Management: A Practical Guide, Emerald Publishing
Limited. pp.11-22.
Sen, S., 2020. Digital HR Strategy: Achieving Sustainable Transformation in the Digital Age.
Kogan Page Publishers.
Wahyuni, R. A. E., 2020. Strategy Of Illegal Technology Financial Management In Form Of
Online Loans. Jurnal Hukum Prasada. 7(1). pp.27-33.
Online
SWOT analysis of body shop. 2020. Available through: <https://www.marketing91.com/swot-
analysis-of-the-body-shop/>

APPENDIX