The Body Shop
Case Study
By:
Mh.Shahid Shaikh
Student ID#991463743
Situation Analysis
Richard Paul is a prospective business person who is looking forward to invest and start his own business after a long tenure in working for others, marketing and Human Resources are two of his main strengths after coming across The Body Shop franchise advertisement he has been researching and meeting with the franchisor to startup.
SWOT Analysis (Strengths/Weaknesses)
Strengths | - Huge franchisee network of 450+ franchised stores in 37+ countries.
- Extensive variety of results of in excess of 400 things and a culture of ceaseless development in its item assortment.
- All around outlined store design and ambiance makes client fascination.
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Weaknesses | - Very little advertisement and publicity of products.
- Due to franchisee framework little control by the proprietors.
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SWOT Analysis (Full SWOT Analysis)
Strengths | - Huge franchisee network of 450+ franchised stores in 37+ countries.
- Extensive variety of results of in excess of 400 things and a culture of ceaseless development in its item assortment.
- All around outlined store design and ambiance makes client fascination.
- Has a high brand esteem and is seen as a socially dependable organization as a result of its engagement in numerous altruistic exercises.
- Very good supplier network. Sources raw materials through Community trade fairs (Mahasagar Publications, 2014).
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Weaknesses | - Very little advertisement and publicity of products.
- Due to franchisee framework little control by the proprietors (Mahasagar Publications, 2014).
- Limiting number of outlets that can reduce sales volume.
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Strengths | - With the expanding attention to characteristic and eco-accommodating items, it has an enormous potential to develop.
- The quantity of online purchasers is expanding and thus it can utilize its web-based interface available to be purchased and free conveyance that will build its piece of the overall industry (Mahasagar Publications, 2014).
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Weaknesses | - The items utilize some perfect crude materials from the whole way across the world. So enactment or a few issues in exchange with provider nations can intensely affect its tasks (Mahasagar Publications, 2014).
- There is solid rivalry in the corrective market with another brand propelling itself consistently. A few organizations are offering regular items made by the client's needs and may turn into a genuine danger to The Body Shop (Mahasagar Publications, 2014).
- Financial downturn can hamper deals.
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Actions:
Action 1: To opt for single The Body Shop franchise.
Action 2: To opt for two franchises in partnership.
Action 3: Opt to buy an existing location in city A.
Action 4: Opt to buy an existing location in city B.
Action 5: Opt to buy both existing location in City A and City B in partnership.
Recommendation:
I would recommend Action 2, to opt for two franchises in partnership, this is more feasible option because as per Pro Forma, Mr. Paul needs a loan ranging from $227,900 to $277,900 and based on Paul’s loan eligibility amount he is eligible to get 80% on fixtures plus 50% on inventory which will amount to $252,000 and this is the loan amount needed by Mr. Paul. Although in the meeting the franchisor mentioned that The Body Shop doesn’t grant multiple franchises to the new franchisee but as per meeting conversation if the partners are ready to work for operations and if the franchisor has the discretion to amend the agreement between partners, company can grant multiple franchises also the partners are enthusiasts so they would readily agree for any amendment in the agreement.
