Describe the market
Asses buying behavior
Asses the competitive situation
The Body Shops competitors are companies such as Lush, Plaisir, Origin and Matas because all of them source naturally and organically. Matas is a huge competitor in Denmark because they offer a wide selection of brands instore and online.
As well as having their own lines of skin- and body care which also include Matas Natur which is natural and generally less expensive than The Body Shop. Although it is cheaper, The Body Shop has made a survey saying 83% of their customers will pay more for the ability to get healthy products and still having the variety of scents that they offer.
The beauty industry is forever changing, and new entrances are seen all the time, but with The Body Shop being such a household name and then going in under the L’Oréal brand gives them a size and reputation that is hard to compete with.
They are also diversifying themselves with unique products and the portfolio of products they have complied through the years.
The Matas Nature line is a big substitute threat because is a healthy option for skincare. Lush is also a big substitute because they have beautiful products that smell great and still offer a healthier alternative to a lot of other brands.
Lush is still more expensive than The Body Shop so the profitability margins should not reduce for this reason.