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This case is about the issue of sustainability rhetoric and

greenwashing. In March 2006, The Body Shop International Plc, a retailer


of natural-based and ethically-sourced beauty products, announced that it
had agreed to an acquisition by the beauty care giant L'Oreal SA in a cash
deal worth 652 million (US$1.14 billion). The announcement brought in its
wake a spate of criticism against Body Shop and its founder, Dame Anita
Roddick. This case discusses the reactions of consumers, activists, and
corporate social responsibility (CSR) experts to the acquisition of Body
Shop by L'Oreal. The acquisition throws up questions such as:
Is Body Shop guilty of greenwashing?
Does it have the influence to extend its values to L'Oreal.
The case also looks into the issue of whether L'Oreal was trying to improve
its own image and to buy CSR through this deal.
The case will help students to:
(1) understand the issues of sustainability rhetoric and greenwashing with
regard to the acquisition of Body Shop by L'Oreal;
(2) understand the challenges faced by a company in building a corporate
image and brand on the social marketing concept; and
(3) appreciate the importance of the cultural and CSR factors in mergers
and acquisitions vis-a-vis financial and strategic parameters.
This case is intended for use in MBA / MS level programmes as part of the
business ethics and corporate governance course. It can also be
effectively used as part of the business strategy and marketing
management courses.
The detailed teaching note includes: (1) the case summary; (2) immediate
issues; (3) basic issues; (4) teaching objectives and methodology; (5)
questions for discussion and analysis; (6) case feedback; and (7)
additional readings and references.

I.
Body Shop
Body Shop is a brand with a difference. Marketers consider this brand
as an Icon. Body Shop has created a brand image without the aid of
conventional advertising.
Body Shop brand was created in 1976 in Brighton United Kingdom.
The brand and the brand owner share a common personality that is very
much linked to each other. Anita Roddick the legendary founder of the
Brand created this brand from a small shop in UK started to support her
family.
Body Shop is differentiated from other conventional cosmetics by the
values that the brand adheres to and the brand image created through
the unique association with those values. The brand is famous for its
association with ethical practices and the environment friendly world
view. The products reflects these values through the use of only natural
ingredients and the products are never tested on animals. The
packaging and the merchandising are carefully prepared to highlight the
brand values. For example , Body Shop uses refillable packs and
recycled /recyclable papers. Although the use of refillable packs were
used to keep the price low, it evolved into an element that reinforced
the brand positioning. The brand also was careful in the messages
displayed in the shop and other POP merchandises. The messages were
simple, enthusiastic and informative. These elements made Body Shop
a different cosmetic brand.
II.

Loreal:

Socially Responsible Action The Body Shop


III.

Corporate Social responsibility has been a hot topic for business for the
last 15 years. The initial revolution started in the 1960s with the protesting
of corporations taking advantage of 3rd world nations as well as the actions
to stop the testing of chemicals on animals. This was fairly ineffective until
the worlds population entered the information age of the early 1990s and

organisations could no longer hide their actions from the populace. The
result of this has been a world outcry for socially responsible actions within
corporations as the worlds consumer body is now concerned. This makes
being socially responsible not only moral but profitable as well. Few
companies have acted as responsibly in the global market as the Body
Shop. Since 1976, Anita Roddick has built her entire organisation around
socially responsible business and is considered a movement leader. Her
company has made many ground breaking policy changes over the last
thirty years in which other companies continue to try and emulate.

Corporate Social Responsibility Stakeholder


Theory
The most widely accepted theory called the Stakeholder Theory that
takes the concept of social responsibility to the masses. Phillips (2003)
believes that an organisation needs to map whoever their actions affect
from employees, stockholders, consumers, suppliers, local community and
the environment and it is only at this point where being truly socially
responsible can be found. Conceptually you want to use a Rawlsian theory
for development in that you place yourself in everyones shoes that you
come in contact with and determine from their view point if you could act
better on their behalf.

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