Strategy Formulation and Implementation Boots Group
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Boots Group – Best known for their high street stores. Apply the rational process of strategy formulation and implementation to Boots Group Company, through analysis of its external and internal environments, identification of long-term objectives, and the organisation's strategic options.
The main focus from the Boots Company PLC environment has always been customer services, since it first began way back in 1900. Boots cite this as one of 'the core values of our brand.' What drives its success in a commercial sense is not only that they pay specific attention to their customer services but also that they are particularly efficient at dealing with change. They have been pioneering in their industry insofar as use of heat, gas, electricity and motorised engines go, and latterly in their stringent and well marketed support of recycling and non-animal testing products. Rather than pursuing this as a rather periforary activity as many of its contemporaries do, Boots actually reinforces these things right down to researching what kind of energy efficient ways of producing the products they buy, their own suppliers use. They use a clever marketing campaign, both in store and on television to support their green tendencies and are more than a little aware that this will enhance their standing in the battle against the health and anti-cruelty campaign which sweeps the country more forcefully every year. Their campaigns and policies give them the weight they need to contend with other supporters of the same campaign such as The Body Shop and Lush, who promote all natural products.
This policy is then supported within the company by setting targets for the employers to work to, including bonuses for certain products promoted and sales of certain brands. They are conscientious and have built a reputation over the years which has seen the company grow steadily over the past 8 years at approx 4% a year in sales and with a small but consistent raise in shares and dividends. The company has been achieving this through its constant modern approach to changing times, and its policy to always serve the customer first, and look after its staff as best it can. It has been named as one of the 'employers of the year' by GTI group, for its pension programme, and its graduate training course, both of which offer stable and suitable compensations and salaries in a varied and challenging environment.
The company also exercises an 'open' policy which means that if there are any public complaints or internal complaints these are talked about openly and nothing is hidden from the public. This serves to prove that the company has nothing to hide and are not entering into anything that may affect or diminish their standing in the market if what was going on 'behind the scenes' was discovered. The whole idea is that this does away with the large corporate image and introduces a more friendly and easily approachable one, making the store more accessible to a wider market.
An Organisational Audit
Based on the current share price of 6.24GBP, Boots Group Plc is 37th in the FSTE 100, this carries exceptional weight when we think of the amount of companies competing for places in the FSTE, and the fact that many of them are huge multi national conglomerates. The placing confirms the companies competitive placing in the market, and therefore supports the way in which it carries out its methods of consumerism, marketing and advertising.
Strategically speaking the company cleverly asserts a 'multi ethical' policy along side it's recycling policies. The whole aesthetic of Boots Group Plc is politically correct, meaning that they cover themselves against any eventuality or accusation before it can even happen. They make sure they hire from every ethnic background, they source their products from all over the world, carefully avoiding any connection with child labour abuse or any work exploitative circumstances. This way they support small markets and economies but cannot be attached to any form of exploitation which could be used against them in the media.
Boots Group Plc openly supports three major charities, donating and fundraising on their behalf. This is a necessary activity for any large company, which adds humanity and personalisation to an otherwise massive and sometimes faceless organisation.
The above activities combined with the stringent recycling and anti animal testing policies we have already covered combine to give Boots Group Plc the image of being a caring and considerate image that promotes easily on the high street. The white front with simplistic logo renders the stores easy to recognise and enforces the clean, vigorous lifestyle that the company wishes to be known for. The branding has become stronger and stronger over the years, and because the stores sell primarily products which are used on the body or to strengthen the body the affiliations with so many 'lifestyle' issues only serve to reinforce the overall 'well being' and sense of innate good doing that the company seeks so actively.
What is interesting about the company is that many people do not know the scope and breadth of its influence. The products which are so adored by British citizens are equally clamoured for by the citizens of Thailand, Japan and Taiwan, where Boots ships its cosmetics and skin care products in massive quantities and in regular shipments. We must also not forget that fact that although its primary marketing and support activities are based around its trademark cosmetics and skincare ranges, it also has a very successful Opticians which is based in store for effective consumer capturing. The rest of its pharmaceutical products are sold in over 130 countries worldwide, which is massive market share of its type. Although its identity branding is undoubtedly stronger here than in any other country it must not be forgotten that the company holds weight elsewhere and subsidiaries which sell its products and therefore add to its profit, all over the world.
Identification of Long Term Objectives
The Boots Group Plc already creates 1500 new products each year, consistently seeking to increase its range and depth of on sale produce. These products are then marketed the world over. The creation of the Boots own skincare range was revolutionary for the company, meaning that they actually now get a share of the skincare market, for which they were just selling other peoples products. These are in house developed, packaged, marketed and sold products, every bit of money made from the sale of these comes straight back to Boots. In the future they hope to grow this range even further, having now developed their own versions of well known medicines and shampoos, they will continue to develop cheaper versions of everything they already sell, with their own brand on the packet. The more these are promoted and external products passed over, the more profit the company is likely to make.
The company is at the forefront of its genre again this year, with the development of Handbag.com, a joint venture with Hollinger International, this is the first ladies internet portal, revolutionary, expanding the brand again. Boots is effective when conceptualising in this way, as the clean image and brand the name already has is secure and trusted in this country. This trust will enable the Group to effectively market new schemes outside of their known area. The public will feel no doubt about buying in to something with the Boots name on it, safe in the knowledge that even though it isn't something Boots is well known for, they have never been let down by the company before, and they support so many good causes and such a clean work ethic that they wouldn't be entering into anything devious.
Currently, the optics section of the overall Boots Group Plc only amounts to 3%, the company should be looking to grow this effective mechanism of promoting yet another in house health activity. Not only is the service created by Boots, and executed in store to save money, but it adds to the image of caring for the consumer and their well being. 85% of the company is still held by the skin care and cosmetics ranges, but as we have mentioned, new products are created every year, to ensure that this 85% is primarily made up of Boots own brands and not other brands the company sells. Geographically the main bulk of profit comes from Europe - 97% in fact. External markets should be grown, the brand built upon overseas, this is clearly an area where much growth can be made in the coming years. The clean living image is attractive in many areas such as The United States of America, and the company would successfully begin to build a market share there.
The company has a massive sense of corporate social responsibility and takes this much more seriously than some of its counterparts. In the future this will only serve to aid its popularity as the community becomes still more concerned with the issues which the Group already supports.