Using The Body Shop as the company, examine the factors behind any Essay

Using The Body Shop as the company, examine the factors behind any changes that have taken place in the structure or geographical location of its Value Chain in - Essay Example Its stock appeared on London’s Unlisted Securities Market in April 1984, opening at 95 pence. The Body Shop was fully listed on London Stock Exchange in January 1986 and at that time, the company’s stock was selling at 820 pence. The market value of the company had reached at  £350 million ($591 million) by 1991. The journey was not smooth; ups and downs came when Littlehampton manufacturing plants were sold. In the year 2000, manufacturing was outsourced. Even then, the Body Shop commanded the same market value in the year 2004 ( £334 million as of September 2004). The Body Shop’s value chain has expanded vertically and horizontally, transgressing its physical boundaries from the UK and the Republic of Ireland into America, Europe, Middle East, Asia Pacific and Africa. A business system in itself is the value chain of a firm. From business perspective, value is the amount customers are ready to pay for the goods of the firm. A firm’s produce is measured by its total revenue – means the number of units sold times the price. A firm remains in profit only until the total value is above the costs borne by all of the firm’s value activities. Michael Porter uses the term ‘value chain’ for this business system. In an industry, value chain of a company depends on its history, strategy and ways of applying that strategy. The set of activities required to collect inputs, design, manufacture, market, deliver and support the goods and services, creates a generic business value chain. A generic value chain is complete in all value activities with added margin, which comes after subtracting the cost of all activities from the total value. The supplier and channel value chains also carry margins, which are included in the total price paid by the ultimate end-user. (Reimann, The Planning Forum 1989) Michael Porter developed the value chain approach in his