Business and Business Environment: The Body Shop Analysis Report

This report provides a comprehensive analysis of The Body Shop's business environment. It begins with an explanation of different organizational types (public, private, voluntary), structures, sizes, and scopes, emphasizing their impact on business objectives. The report then delves into a PESTLE analysis of The Body Shop, examining the influence of political, economic, social, technological, legal, and environmental factors. Furthermore, it includes a SWOT analysis to assess the company's internal strengths and weaknesses and external opportunities and threats. The report also applies Porter's Five Forces model to analyze the competitive landscape. The analysis highlights the interrelation between internal factors and macro-environmental influences, providing insights into the company's strategic position and decision-making processes. The report underscores the importance of adaptability and strategic planning in navigating the dynamic cosmetic market.

Business And Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
1. An explanation of different types of organisation...................................................................1
2. Explanation of different organisations structure, size and scope which affect business
objectives.....................................................................................................................................2
3. Explanation of different organisation function and their impact on business objectives and
structures.....................................................................................................................................4
TASK 2............................................................................................................................................4
1.PESTLE analysis of The Body Shop Limited..........................................................................4
2. Internal and external analysis of The Body Shop organisation and their inter-relation with
macro environmental factors.......................................................................................................5
Conclusion.......................................................................................................................................7
Reference ........................................................................................................................................8

INTRODUCTION
Overall performance and sustainability of business depends on many factors, such factor
like this includes its suppliers, competitors, government, media, investors and many other
institutional factors. In this report chosen organisation is The Body International Limited which
deals in cosmetics. This present report will cover explanation of different types of organisation,
their size and scope and also interrelationship between various functions of organisation and
their link with organisational structure. Furthermore, positive and negative factor that influence
macro environment of business operation and strength and weaknesses of business that
interrelates with macro- environmental factors. Further, in this report Pestle analysis of chosen
organisation is going to be study in this report.
Task 1
1. An explanation of different types of organisation
Explanation of different types of organisation that is public, private and voluntary
including their purpose, scope, size and legal status.(Calabrese and et.al., 2018.)
Public organisation. This types of organisation include an entity that is comprised for the
purpose of providing goods and services to public and which is regulated and operate by
government and trade their share in stock exchange. British Petroleum is multinational oil
company which comes under this sector. Size of this company is that it has 7.5 million barrel
material resources based on 5.7 million acre. Their scope is to fit new technologies which expand
their business growth.
Private organisation. This types of organisation are run by individuals or by companies. They
do not trade their share on stock exchange and their main motive is to generate profit in the
company. The Body Shop international limited is a private company which doing their business
in providing cosmetics products, perfumes to public. Scope of this company is to sell range of
1000 products. Their purpose is to increase their business towards social and environmental
campaign and to raise self-esteem to women. They do business in many countries therefore they
wide structure of doing business.
Voluntary organisation. This types of organisation establish to provide benefits to the society.
Their main motive is not to earn profit and if they generate profit in the company that amount
will be invest back to provide benefits to the society. Oxfam is one of the voluntary organisation
which motive is to reduce poverty and injustice which going on international stage. Oxfam
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business is flat which run by chairwoman. Their scope is to provide maximum benefits to the
society and provides equal treatment to both male and females of the society.
2. Explanation of different organisations structure, size and scope which affect business
objectives.
Public organisation
(British petroleum)
Private organisation
(The Body shop)
Voluntary organisation
(Oxfam)
structure Legal structure of
public company says
that it must have at
least two shareholders,
must have to issue at
least £50,000 shares to
public and have to
registered at company
house and must have
at-least two directors
which runs company.
(Kew and
Stredwick,2017.)
Positive impact of this
legal structure is that
companies functions
runs smoothly in the
organisation but
negative impact is that
in running business
operations members
influence in decision
making process of the
company.
This types of
companies must have
at least one member
and one director. At
least one shareholder
who finance in the
company. Positive
impact of this structure
is that decision of
company can be taken
with proper
communication
between director,
member and with their
shareholders. Negative
impact is that
influence of members
is more than public
limited company.
This types of
organisation set
precise form of legal
structure. Three forms
are there
unincorporated
association, trust and
company limited by
guarantee. Positive
impact structure in
organisation is that
members do go out of
there main motive of
organisation and
negative impact is that
they have to provide
each and every details
of money which
invested to provide
public benefits.
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size British petroleum has
large size business.
They are doing
business in a billion
dollar marketing
operation which runs
their business across in
50 countries and
employ 40,000
peoples. As they have
large size of business
so there growth
opportunities are more
with this size of
business.
The body shop
company has its many
franchises stores
which doing their
business in 66
countries. They
currently have range
of thousand products
which sells in every
stores of the company.
Therefore, with this
size they have large
opportunities to
achieve growth of the
company.
Oxfam doing business
in more than 90
countries and they
have confederation of
19 organisation which
are working to provide
benefits to the people
who are suffering from
poverty and injustice
from society. This
structure helps them to
provide maximum
benefits to societies.
scope Scope of this company
is to develop changes
in organisation
regarding new
technologies and to
change pattern of
demand rather than
search for supply.
Their intention is to
make world ambition
to use low carbon
future. This intention
of company makes
them to build good
image among
Their scope is to
provide the best
quality cosmetics
products with greater
social values. Their
aim is not to harm any
animals in beauty
products and to
provides the best
quality of services to
customers.(Maula and
Murray, 2017. )
Scope of this
organisation is to
make world rich in
resources so that
poverty will not have
to face by peoples of
the society. Their air is
save lives of the
people and to make
them strong again.
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customers.
3. Explanation of different organisation function and their impact on business objectives and
structures.
Different organisation function in the companies include production, finance, human
resources and their link to organisation objective and impact or organisational structure are as
follows.
Production department of the organisation takes care about production of goods and
services of the organisation. On business objective their impact is that they work for company's
productivity, and for profitability. Production department of the companies shows overall
performance of the organisation by which company generates their profitability. Advantage of
production department impact is that they maintain company's demand and make good and
services according to supply of the company. Organisational structure also influence with
production department. To achieve company's growth, innovation and marketability
confirmation of production department is necessary for the organisation.(Hamilton, and Webster,
2015.)
Finance department of the company plays an important to role to achieve growth of the
company. For the fulfilment or organisational objectives finance department role is to maintain
that much amount which company want to invest and future outcomes of that investment for
company. Advantage of having finance department in the company is that they main total
inflows and outflows of the company. Organisation structure which company follow whether
flat, matrix, tall they maintain that structure to achieve growth.
TASK 2
1.PESTLE analysis of The Body Shop Limited.
The effect of macro environmental factors on the Body Shop International Limited are as
follows.
Political factor which The Body Shop industry is facing is that they have to maintain
strict guild lines for product safety which is given by government. Cosmetics products needs
proper security just because they are in direct contact in face of the customers.
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Economic factor which company face are regarding recession and this company employs
thousands of people and number of employees are increasing day by day and because of this
factor company cannot able to employ many peoples.(Boyd and et.al., 2017.)
Social factor includes for The Body Shop organisation is brand loyalty. Products which
are in direct contact with face, hair, skin are needs to safe in use.
Terotechnological factor includes 24 hours of access as internet brings revaluation in
beauty industry their sales increases heavily and this impact helps them to attract more customers
in organisation.
Legal factor in this company is that they have to follow two major acts that is Federal
food, drug and cosmetic act and fair packaging and labelling act.
Environmental factor in this industry is that they main green attempt towards
environment and provides less stress to environment.
2. Internal and external analysis of The Body Shop organisation and their inter-relation with
macro environmental factors.
To identify internal and external factors of The Body Shop organisation, SWOT analysis
is as follows.
Strength-
 Company has huge franchisee which is
almost in 60 countries and have 2600+
stores.
 Have wide range of products of more
than 1000 and create in doing
innovation to products.
 Company has power to attract customer
by providing well designed stores and
layouts.( Dobbs,2014.)
 Have high brand value and famous for
socially responsible because of giving
environmental practises.
Weakness-
 Less advertisement of products.
 Have many franchisees and because of
these proprietors have control on
products.
 Retail outlets are less which impacts
sales volume.
Opportunities-
 As this company provides eco- friendly
Threats-
 Company have to face lot competition
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products' growth opportunities
increases.
 Number of customers are increasing
because of online service provided by
company.
in market as there are lot more other
cosmetic company.
 Have to problem in trading with
suppliers of different countries because
of exquisite raw-material in products.
Its inter-relation with macro external factors.
To analysis external factors that affect organisation, PORTER'S five models are applied
to analyse.(What is Five Forces Analysis. 2018.) Here is the diagram which shows five forces
model.
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Illustration 1: porter's five forces model
source: (What is Five Forces Analysis?, 2018)

Bargaining power of suppliers. In cosmetic company like The body shop they have low
bargaining power of suppliers because they have large numbers of suppliers. As many
substitutions are available in the market impact on cost of input is low.
Bargaining power of buyers. Company have to face lot more competition in market because of
that alternative are available for the customer and company has to face high bargaining power of
buyers.
Threat of new entrants. This is high in the cosmetic and skin care market. Company have high
competition and many new entrant came and capture market of this type of industry and because
of this company's profitability will reduce.
Threat of substitute. This factor in company is low because skin care products only have two
substitute one is home remedy and other products which are made with natural ingredients so
company does not have to face many substitutes of products, therefore switching cost and buyer
tendency towards substitution is low. (Leiber, Stensaker and Harvey,2018.)
Rivalry among existing competition. This factor of the company is high as they have many
existing competitors in the market and therefore cosmetics company's supply is greater than
demand. Exit barriers of this company is also low and differentiation of product is medium.
How strength and weakness influence decision making.
Strength of the Body Shop company is that they have huge franchisee stores because of
this if company wants to expand their business in different countries they will easily get growth
because consumers are aware of their brand loyalty. Another strength of the company is that they
have well designed store and if company wants to expand new stores in the country this factor
gives positive impact as customer will get attracted with well designed store.(SHTAL and et.al.,
2018.)
Weakness of the company is they do less advertisement of products and if company
wants to expand their business in new area then their turnover will get reduced because of this
decision of the company. Another weakness is that they have less retail outlets and if company
takes decision to increase their production of products then their sales will not grown up because
of this factor.
Conclusion
From the above study it can be concluded that overall performance and sustainability of
business depends on many factors and to retain that factor in the organisation company has to
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maintain different rules and regulations. In this report, an explanation is given on different types
of organisation their structure, size, scope and purpose also defined in this report. After that in
this report an explanation is given in different departments of organisational function and their
impact on business objective and business structure. In this report, PESTLE analysis and SWOT
analysis is given of The Body Shop organisation and their effect on macro environmental factor
and decision making process of the company.
Reference
BOOKS AND JOURNALS
Calabrese and et.al., 2018. From mechanical to cognitive view: The changes of decision making
in business environment. In Social Dynamics in a Systems Perspective (pp. 223-240). Springer,
Cham.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Maula, M. and Murray, G., 2017. Corporate venture capital and the creation of US public
companies: The impact of sources of venture capital on the performance of portfolio
companies. Creating value: Winners in the new business environment. pp.161-183.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Boyd and et.al., 2017. Hybrid organizations: New business models for environmental leadership.
Routledge.
SHTAL and et.al., 2018. Methods of analysis of the external environment of business
activities. Revista ESPACIOS. 39(12).
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review. 24(1). pp.32-45.
Leiber, T., Stensaker, B. and Harvey, L.C., 2018. Bridging theory and practice of impact
evaluation of quality management in higher education institutions: a SWOT analysis. European
Journal of Higher Education. pp.1-15.
ONLINE.
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What is Five Forces Analysis. 2018. [ONLINE]. Available through <https://www.visual-
paradigm.com/guide/strategic-analysis/what-is-five-forces-analysis/>
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