Body Shop Essay

Submitted By Vivienne0906
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Body shop

Economic:
The biggest issues facing those in the beauty market is the current performance of the UK economy, and in particular its failure to fully recover from recession.
Over all the UK, the GDP continued to decline from Q3 2011 to Q2 2012 (Office for National Statistics, 2012). The consumers will except lower price for the cosmetics，which is a serious challenge for beauty industry. Meanwhile, the rate of unemployment declines from 8.4%(January 2012) to 7.9% (August 2012) (Office for National Statistics, 2012), however it also stays in a high-risk status, because it could give rise to the household income declined, which means the ability of consumption reduced.

Micro-environment
Market：
In general, the UK beauty market grew fast from £8,699.3 millions to £10,517.2 millions for the period of last 6 years (Euromonitor International, 2012), among which, Skin Care, Colour Cosmetics, Hair Care, Fragrances and Men's Grooming account for larger market share. In contrast, the sales of Depilatories and Sun Care are lower than other varieties.
In order to get a bigger share of sales, the beauty corporates increase investment in some areas, for instance LOREAL increased the innovation budget from £665 millions (2010) to £721 millions in 2011(LOREAL, 2012).
Also, some negative effects are exerted on the Hull beauty market by some current economic. For example, with the CPI&RPI increasing, inflation still has a large impact in beauty market, also the Hull disposable income is the second lowest area in UK (Appendix), which could give rise to the consumer reduce the spending budgets, which could affect beauty sales.
Suppliers：
Owing to protect the environment, the beauty companies select the suppliers, which could provide environment-friendly products, such as the recycle packing. Also the beauty businesses should sort the natural raw materials, such as tea tree, aloe, which could meet the consumers’ natural demands.
With the competition between the enterprises growing, an increasing number of merging and acquisitions occurred in the beauty industry, for example, LOREAL merged TBS in 2006. In addition, the number of suppliers is growing. Owing to these factors the suppliers will have low power, where they will cooperate tightly with the beauty businesses in order to get a higher total margin，such as improving efficiency, reducing costs(Kumar et al, 2006).

Reference:
Euromonitor
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