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Strategic Evaluation Document for Boots

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Autor:   •  March 12, 2018  •  Research Paper  •  3,694 Words (15 Pages)  •  85 Views

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Management Summary

In writing the report of “Strategic Evaluation Document for Boots”, I describe the detail information of Boots and the strategy evaluation including the present proposition. I analyze the Boots’ organization’s current position by using the SWOT and PEST analysis. In documenting eMarketing strategy, I advise different marketing strategies and describe the value proposition and differential advantage of these strategies that Boots should adopt. At last, the ethical and legal issues about gathering, processing, and distribution of data are also documented.

Strategic Evaluation Document for Boots

Nowadays, Boots is one of the famous health and beauty retailers in UK. It was founded by John Boots in 1849. In 1860, John died and his wife, Mary and two small children, Jesse and Jane took control of the management of the store. Boots now have over 2,500* stores in main streets and shopping malls across the UK. Boots mainly produce and retails cosmetics, toiletries, wide range of health and beauty products, baby products, and gifts, with prescription and non-prescription. They also offer individual conversation and support to improve the health of local communities.

In September 1997, Boots launched its Advantage Card scheme nationally. Advantage Card also known as Loyalty Card schemes are effective ways in increasing customers retention. It stopped focusing on the traditional product category and changes to focus on customer-centered view and it is paying great rewards to them. Although Boot hoped only 8 million card holders during the scheme’s first year, there were 10 million card holders in 1998. Boots invested around £25 million in Advantage Card including to develop a database to monitor buying patterns, the insight into the consumer behavior. Boots worked with IBM to analysis the new customers. Six months before the national card launch, the database project started in 1997 (6 months before the national card launch). No one wanted to be first with IT as it is painful to deal with the most advance latest technology. Nevertheless, that is the reason why they do not lose out on competitive advantage. Externally available data combined with the customer demographic data helps to gain a better understanding of the customers buying patterns. The campaign management system developed by IBM can able to produce high responses by targeting relevant customer groups.

The campaign management system which could involve the customers in the relationship marketing has been fully integrated within the Customer Data Analysis System (CDAS) through a bespoke developed by IBM. That system can able to drive high responses rates by tightly targeting relevant customer groups, to close the loop from initial customer analysis, through customer selection and further campaign analysis.

The following shows the Annual Financials of Boots Alliance Inc.

Fiscal year is September-August

All values USD

2011

2012

2013

2014

2015

Sales Revenue 72.18B 71.63B 72.22B 76.39B 103.44B

Sales Growth Rate 7 % -0.7% 0.8% 5.7 % 35%

Net Income 2.71B 2.13B 2.45B 1.93B 4.22B

Sales Return 3.7% 2.9% 3.39% 2.67% 4%

Total Assets 27.49B 33.48B 35.48B 37.18B 68.78B

Return on Investment 9.8% 6.3% 6.9% 5.1% 6.1%

As shown in the table, starting from 2013 the sales growth rate of Boots increases. Between 2011 and 2015, the net income rate is not very much stable. In 2015, the sales growth suddenly increases 5.7% to 35% and also the net income 1.93B to 422B. The total assets in uprising yearly. Nevertheless, Boots have performed very well although there are several rival competitors.

Boots’ mission is to be first choice for pharmacy, health and beauty caring for people, customers and communities. It offers a fantastic range of products and services. Information about different categories of products associated with pharmacy and health, beauty, fragrance, toys and gifts, etc are provided online. There are options for deliver service and payments for orders and there is also a gift box service. For health & pharmacy, they provide services such as free medicines checkup, new medicines check, booking an appointment, care home services, drug user service, etc. They have earned a reputation for providing customers with excellent, trustworthy healthcare advice and services.

Now, we are going to describe about strategic evaluation of the organization’s current position using SWOT and PEST analysis tools. Then, we will describe about the eMarketing strategy for the organization and legal and ethical issues that are required to consider in processing the data.

Strategic Evaluation

Boots is a famous pharmaceutical industry in the UK and it is now operating with several stores across the UK and a retail website. It sells a wide range of health and beauty products and it runs a loyalty card scheme as the Boots Advantage Card. The sales of Boots increases yearly and the sale. The revenue of Boots increases. The sales growth rate and return on investment is unstable between 2011 and 2015. In 2015, the sales growth rate increases from 5.7 % to 35%. The total assets in uprising yearly. Boots has performed very well last year. Now, we are going to analyst Boots industry using PEST and SWOT analysis tools.

PEST Analysis of Boots

P.E.S.T is used to determine the Political, Economic, Social and Technological factors that can affect the performance and activities of Boots in the long term.

Political

Political factors have a huge influence on the regulations of business and the spending power of societies and the business.

- The Government controls the prices of products in the industry. Therefore, Boots is facing with pressures on pricing. It makes Boots difficult to compete in the market.

- The UK government policies that allow some major supermarkets to open several pharmaceutical stores within their stores creates a huge

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