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Lush: A Rarity in the Cosmetics Industry*

CASE STUDY, ENTREPRENEURSHIP & STARTUPS
ET Cases - GSMC, 18 Pages

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Lush: A Rarity in the Cosmetics Industry

 

"We believe in the right to make mistakes, lose everything and start again.”1

– Part of the Lush mission statement


“Lush is about passion and iconoclasm: passionate for natural products, fresh handmade cosmetics, seductive perfumes, growth and profit, and iconoclastic about  everything else.”2

– Angus Jenkinson and Branko Sain, Professor and Research fellow of Integrated Marketing - Luton Business School



“The whole point of LUSH is that it should be fun for our customers and fun for us.” 3

– Mark Constantine, LUSH’s Managing Director


In February 2009, Lush opened its 100th store in the USA. By 2014, Lush had over 830 stores in 51 countries of the world. In 2009 the revenue for Lush was around  $595 million. The Sunday Times Rich List 4estimated Mark Constantine’s (co-founder and the man behind Lush) monetary wealth at £505 million.6

Lush started with a single store in 29 High Street Poole with a small team of people who made hand-made cosmetics, using natural ingredients like fruits: oranges, lemons, juices etc purchased in the supermarkets and used them in soaps and other products. From such humble beginnings, the company went on to achieve a phenomenal growth. Although originally formed in the UK, one of the major regions for Lush was North America (50% in Canada and 40% in the USA) where Michael Wolverton controlled most of its operation since 1996. Around $90 million of the company’s global annual sales of the $350 million come from its North American operations only. Lush continued to be a privately owned company (shareholders: Mark Constantine 37%, Margaret Constantine 25%, Andrew Gerrie 12%, others 26%). Lush achieved all this without compromising on its core beliefs and values and standing up strongly for what it believed in. The company was always against using harmful chemicals, animal testing and packaging from the environment point of view. Lush came to be known as one of the good, ethical companies of the  world................

 



1 www.lushusa.com
2 Angus Jenkinson and Branko Sain, “Lush, the Scent of Success,” www.stepping-stones.org, April 1st 2003
3 www.lushusa.com/images/media/LUSHMedia.pdf
4 The Sunday Times Rich List is a list of the 1,000 wealthiest people or families in the United Kingdom, updated annually in April and published as a magazine supplement by British national Sunday newspaper The Sunday Times since 1989.
5 As of October 2014, 1 GBP was equal to 1.60 USD
6 Cory MorningStar, “Lush’s Dirty Laundry,” http://wrongkindofgreen.org, July 31, 2011

 

Teaching Note Preview

Lush: A Rarity in the Cosmetics Industry

 

Synopsis

This case is about a successful entrepreneurial start up called Lush. Mark Constantine along with a few others started ‘Lush’ with a single store in the UK in 1995 which grew on to become a famous cosmetics company in the world having over 750 stores in 45 countries by 2011. The main man behind Lush- Mark  Constantine was a trichologist. He had always been different from others and had an interest in cosmetics from the very beginning. He loved to experiment and came up with a lot of his own products. He developed a dislike for chemicals from a young age when he once saw an advert about rat poison. This later came to define the company Lush as well which was against chemicals and in favour of natural materials. After becoming a supplier for Body Shop and the biggest one at that, to later starting a company –Cosmetics to go’ which failed, to finally opening up Lush; told an interesting journey of the entrepreneur Mark Constantine.

Lush was unique in many ways. The company had a strong stand against using chemicals, against animal testing and packaging. Lush used a lot of natural  materials like fruits in its products such as soaps, shampoos, gels, moisturizers, creams etc. To avoid harming the environment, Lush even tried to use as little packaging as possible..............

Teaching Approach and Strategy

This case can be used effectively in classroom discussions as well as in distance learning programs. The case moderator can initiate the discussion by giving a brief introduction about the company Lush and the man behind it- Mark Constantine. An overview of his previous entrepreneurial ventures can be mentioned too as well as the various issues that they faced could also be briefed. This can be followed by a discussion regarding the various policies adopted by Lush, its ethical stand and the decision to support various campaigns. The moderator can take the discussion further with the help of the following questions.

Assignment Questions

  • I. What according to you were the reasons for the failure of ‘Cosmetics-to-go’ started by Mark Constantine? What did he do differently in Lush because of which it succeeded?
  • II. ............................................


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Abstract

This case is about a successful entrepreneurial start-up called Lush. Mark Constantine, a trichologist, started ‘Lush’ with a single store in the UK in 1995. Lush went on to become a famous cosmetic company in the world, having over 750 stores in 45 countries by 2011. Lush was unique in many ways. It had a strong stand against using chemicals, animal testing and packaging. Lush used a lot of natural materials like fruits in its products such as soaps, shampoos, gels, etc. To avoid harming the  environment, Lush used as little packaging as possible and mostly had solid products. Even for transportation, the company innovatively used popcorns to be  eco-friendly as well as to protect the products. Because of natural ingredients, even the life of their products was longer. Lush also had a unique philosophy to  encourage innovation. Once a year they would have a ‘Mafia Meeting’ wherein they would discard one third of their products that weren’t doing well. This encouraged employees to come up with something new and innovative. Mark also had a very hands-on approach and would be involved in almost every aspect of the company. This case covers the interesting journey of the entrepreneur Mark Constantine from initially becoming the biggest supplier for Body Shop, to starting a company – ‘Cosmetics to go’ which failed, to opening Lush and the challenges he faced.



Pedagogical Objectives
This case is designed to enable students to:

  • Understand the various challenges faced by an entrepreneur
  • Understand the factors which influence the success of an entrepreneurial venture
  • Assert the possible reasons for the failure of the previous start ups by Mark Constantine
  • Analyse whether Lush was truly an ethical company the way it projected itself
  • Analyse whether a business can be successful while functioning in a truly ethical way
  • Analyze and assess the stand taken by Lush under the leadership of Mark regarding the support extended to various campaigns and also the funding provided to controversial organizations
  • Visualize the future of Lush without Mark Constantine
  • Case Positioning and Setting
    This case is meant for MBA students as a part of the Business Strategy/Marketing Management curriculum

    * GSMC 2014, IIM Raipur

    This Case Pack Includes:
    - Abstract
    - Case Study
    - Teaching Note (**ONLY for Academicians)
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