project report for owen muzi, greenwich university ourseworks website , project reports

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COURSE: Electronic Commerce
TITLE: “Strategic Evaluation Document for Boots”
NAME: Owen Muzi m.
STUDENT NO.: BSC 13010
DATE: 5th
October, 2013
CENTRE: ZCAS

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Table of contents
i. Title page …………………………………………………………………page 3
1. Management Summary……………………………………………………page 4
2. Introduction……………………………………………………………….page 4
3. Strategic Evaluation…………………………………………………………page 5
4. Impact of IS…………………………………………………………………page 10
5. E-Marketing Strategy……………………………………………………...…page 11
6. Legal and ethical issues…………………………………………………….…page 13
7. Conclusion………………………………………………………………….…page 14
8. Appendix ………………………………………………………………………page15
9. References………………………………………………………………...…….page16

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“Strategic Evaluation Document for Boots”
By
Owen M Muzi
A consultant
At muzitex

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1. Management Summary
Am a consultant and the senior management at boots invited me to put together a strategic plan
looking at the evidence they have given me. Boots is one of the biggest retailers in the world, UK
to be particular.
The senior management is also looking forward to a thorough investigative report into the
examination of the impact of the new IT/IS system on the culture and the productivity of the
organization.
I must write a report called “strategic evaluation document for boots” which I need to submit to
the management of boots.
In this report I must provide evidence that shows all the claims that the new IT/IS system has
brought and giving boots a competitive advantage.
The report will look at the history of the organization to aid us know the cause of most actions
the management have taken to help the organization continue being on the top. The other
important aspect we will examine is the organization’s strengths, weakness, opportunities and
threats using the SWOT analysis because these impact the performance of the business within its
sector.
Boots is now facing evermore competition from leading supermarkets as such Tesco’s, Asda,
Sainsbury’s this has forced Boots to cut prices, increasing their product range. This has also lead
to Boots implementing new IT/IS systems to help the evolvement and development of the
company so that they can gain economical advantage and rise amongst their competitors.
Moreover this report must show the current strategic position and examine the current
competitive position of boots.
2. Introduction
“Boots organization started with an agricultural worker. He made and sold herbal medications.
He started a shop in goose gate. This man’s name was John Boots.” (Information from Boots UK
Limited. "Boots UK". Retrieved 20 March 2010)
In 1970 boots started to grow under the leadership of Mr. John Boots’ child Jesse Boots after the
death of Mr. John Boots. Jesse engaged professional pharmacist and Jesse obtained more new
places to occupy and other chemist, it expanded with more than 500 stores in England, Wales
and Scotland.

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The Boots Group has become one of the largest leading pharmacy-led health and beauty
organization in the United Kingdom, with operations in retail and manufacturing. Boots has
broaden their product range and distribution channels that cross over 17 countries worldwide,
Boots employs over 60,000 workers in total and has approximately 1,500 health and beauty
stores in operation.
“Boots retails a variety of products which included “Boots” own brand items that have become
some of the UK market leading brands by revenue. Boots international channels of distribution
are embedded within a host of retailing stores across 14 countries, with an approximate further
95 stores owned throughout Asia. Boots over the years has generated vast amounts of profits,
trading profits for the year ending in March 2006 Boots Group saw trading profits from the year
ending 31 March 2006 of £335.9 million. As of the 31 March 2006, Boots had net assets worth
£1,651.5 million.” Cited “Boots announces £7bn merger deal". BBC News. 3 October 2005.
Retrieved 29 May 2013.
The business grew with Jesse as the leader of the business. He had a skill of buying bulk and this
helped in providing the customers with competitive prices without altering the quality. Boots
under the leadership of Jesse had experts who helped Boots to be known for quality, value and
excellent service.
In Nottingham the places for boots were used for warehouses, factories and laboratories for
further research into new pharmaceuticals and chemicals.
In 1933 a 1000th
store selling a wide range of products was opened selling brands such as No.7
etc. the retail business was supported by the manufacturing of boots branded products.
The company kept to expand its research and manufacturing, following the making of the
National Health Service in 1948. More developments were made with the introduction of self
service in stores in the 1950s, records (“Harry Wallop” (19 June 2012)
Boots have brands that are known and in recent 10 years there is an introduction of successful
brands e.g. 17 cosmetics and botanics also the new venture of Boots opticians. These and a lot
more made Boots to enjoy their success but now with competition from a lot of companies such
as Tesco and Asda, Boots have to wake up and have a strategy.
3. Strategic Evaluation
SWOT ANALYSIS
Using the help of the SWOT analysis we will see the current stand of boots. All companies have
their strengths, weaknesses, opportunities and threats. Boots also have and these normally help
us to see the current position of any company.

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Strengths for boots
Boots is a well know beauty and health retailer with a well-known brands. The company has a
reputation for providing customers with excellent customer service. This is what customers value
so highly. Providing customers with wide range of high quality products throughout its stores is
strength.
Below is a list of products that boots provides.
1. Health and beauty
2. Personal care
3. Cosmetics and toiletries
4. Baby care
5. Bathroom toiletries
6. Dental care
7. Hair care
8. Men’s toiletries
9. OTC medicines
10. Prescription medicines
11. Pharmacy service
12. Paper products
13. Perfumes
14. Skincare
Figure 1. The list was taken from the Boots website shown below
Figure 2.Image of Boots website.

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Research conducted by the BBC TV Horizon programme found that Boots ‘protect and
perfect serum’ performed better than more costly brands. This finding is certainly one of
Boots strengths as it provided a brand reputation and recognition.
Boots has a lot experience over the years. This has made boots a well-regarded organization
by most customers in UK and beyond.
Boots won the best retailer in the cosmetics and toiletries in 2007 fighting off their rivals
such as Superdrug’s.
The company has a very sophisticated information system that is used to support their
international logistics system. With the aid of the information systems Boots has the knowledge
of their best customers, furthermore this enables the growing team of analysts and marketers at
Boots to use the information on purchasing patterns to drive strategic change within the company
from traditional product category focus to a customer orientated view. Using the IT systems it is
now possible for the team of analyst to create target customer profiles without having to create
extract data, after identifying the set criteria the system automatically produces a mailing list
with the details of matching card holders. The new system allows Boots to have that unique
personal relationship with their customers, enabling them to treat each customer individually
which is absolutely another strength Boots comprise of. With these systems in place Boots has
the leading advantage with their competitors as can aim their promotions and marketing
campaign to certain groups of consumers, thus allowing them to supply and meet their customer
demands with the best service available.
Boots has a unique loyalty scheme that is different from any of its other rivals, as it is focused on
‘treats’ for the customer rather than the rewarding the housekeeping money. Boots considered
approach to new technology and products have definitely allowed the company to gain rich
rewards, for example their loyalty card attracted 10 million customers within a year of its launch
without doubt strengthened the company. Boots Advantage Card rewards the customer with
personal items which they may not have normally bought for themselves for a number of reasons
which may due to a limited shopping budget etc. Research that was carried out by Boots found
that from the early research trials carried out, that the customers really valued this incentive.
Boots unlike one of their main competitor Superdrug’s has gained the market edge with the use
of their loyalty card, as Superdrug’s do not currently have a loyalty card and so this is an strong
advantage for Boots.
Weaknesses for boots
Even with the IT advantages and retail experience that Boots has attained over the years there are
many areas of weakness within the organization due to the huge span of control. As Boots sells
products across many sectors (such as toiletries, electrical health and beauty), this may limit the
flexibility they have compared to some of their more focused competitors. As mentioned before

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Boots product range is very broad therefore it is difficult to focus on their product branding.
With providing wide range of products Boots leaves itself more vulnerable to competitors in the
marketplace which is a weakness for Boots.
Boots products such as the Botanics range requires the use of a variety of raw materials and
manufacturing processes which increases carbon emissions, this is a weakness for Boots as
consumers who are trying to reduce the carbon foot print are switching to organic products. As
Boots Botanics range requires use of a lot of raw materials which leads to increase in carbon
emissions. This is a weakness for the company as Botanics range is one of Boots most successful
products, if they do not take steps to find alternative sources for their materials and reducing the
carbon foot print they face losing customers to fellow rivals who are offering ‘green’ products.
Boots lengthy approach to research into new technology and products is a weakness as this
allows competitors to take the chance of entering the market with their new technological
expertise and use it to their advantage. The use of the Advantage card is on of Boots main asset
but this can also be a weakness to the company due to the lack of customer assurance, customers
may feel as though their privacy is being invaded as every detail of their shopping experience is
recorded. Without the customers using the Advantage Card, Boots will lose their customer if
they feel invaded, which could lead to a drop in sales. As the team of analyst will use their data
from the loyalty card for their marking campaigns for their products, this could end up isolating
individuals by sending mix messages to its customers.
Boots has stores in the UK and across the world but with such a huge span of control it can be
hard for Boots to communicate company goals and objectives. This can have a knock on effect
on the culture and productivity of Boots International, for that reason this is a weakness for
Boots.
Opportunities for boots
Boots have several opportunities at hand such as the use of further information technology to
develop and improve running efficiency which will allow Boots stay ahead of their rivals, such
as the supermarkets like Asda, Tesco etc. Boots at the moment only trade in small number of
countries, so there are vast business opportunities for expansion in increasing consumer markets
around the world. Opening stores in new locations and smaller local convenience stores offers
Boots the opportunity to exploit market development. Boots can develop their product range
further to create further opportunities, developing their internationally brand recognition.
Boots have the opportunity to rebrand their products and services such as their network of
pharmacies where they can use strengths from both Alliance Unichem and Boots brands. The
stores can be formatted around the customers journey around the stores so that customers can
visit each section that maybe relevant to them.
Boots can also improvise and include services such as ‘drive-through pharmacy’ across the UK
stores as according to the Daily Mail; Boots in August 2008 took over a McDonald’s restaurant.
Customers can drive through handing in the prescription at the window and picking up their
medication at the collection point, this will prove to a great hit with busy mothers and commuters

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which will see sales roar up. Boots has the opportunity of opening further similar formatted
stores across the UK.
Boots majority of the customer’s maybe women but studies show that there is a rise in male
vanity; new figures show that there is a 30 per cent increase in men choosing to have a shot of
the Botox in order to keep the wrinkles at bay. Boots has already developed lines that appeal to
men, sales of men’s skin care products are growing faster than other Boots products. Boots has
the opportunity to diversify its products further to included further lines that will appeal to men
as the market just for Botox alone is worth hundreds of millions of pounds a year.
Boots also has the opportunity to target the younger audience which mainly includes consumers
who are students; Boots can join schemes such as NUS to attract students who are the Boots next
generation of customers. The NUS scheme has been running for years and has proved to be very
successful for those companies who have signed up including one of Boots main rivals
Superdrug’s.
Boots also have the opportunity to employ professionals and offer clinic services for those
consumers who have a busy schedule to keep or for those working mothers. Mothers worry about
their little ones especially when they fall ill, they require assurance and advice from a
professional on which course of treatment is the best. Such service will surely attract customers
and be a reason for them to opt to use Boots instead of their rival Superdrug’s.
Threats for boots
There a lot of threats below are some of the threats I have noted:
Many companies are outsourcing their manufacturing to low cost regions of the world. But boots
has manufacturing, warehouses and labs for research in the UK, thus resulting in price deflation
in some of the product ranges and having intense price competition is a threat. Consumers are
now shopping around for a better deal, consumers can compare price of products and purchase
the cheapest. Such consumer price sensitivity is a threat to the boots.
One of the clearest threats to Boots is the diversifying of most supermarket retailer they are now
dealing with all products e.g. foods and non-foods. More consumers use their grocers for all
personal products; this will have huge effects for Boots markets share. Supermarkets or groceries
are able to provide very competitive price as well as convenience which are driving consumers
away from the specialists. Customers want a one stop shop now.
There are a number of pharmacies that are coming up in the UK and worldwide. Pharmacy is
fundamental part of boots brand, it represents one quarter of the sales, thus being the foundation
of Boots authority and credibility. Bigger supermarkets such as Asda and Sainsbury are now
offering in-store pharmacies. Sainsbury is offering a new method of organizing doctors’ visits,
customer would book appointments using their normal surgery but attending the clinic at the
supermarket such efforts are attracting customers from specialists such as boots. There are amid
fears that boots may soon start losing revenue from prescriptions to supermarkets.

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Another threat is the internet people are turning to buy products on the internet. Internet based
companies are able to provide competitive priced products with option for home delivery.
Although boots have their online site, there is far too much competition online.
There are also environmental threats as ecology and the environment are increasingly priorities
for consumers most consumers are going ‘green’.
Pest analysis for Boots
P= political
E= economic
S= social
T= technology
Political
The law made by the law maker does affect business too whether positive or negative. In the UK
there are many laws that affect the running of Boots as the business e.g. under electronic
communication act 2000 the data from UK is not permitted to get outside the country.
Boots would want to expand not only in the UK but outside also.
Economic
A lot of businesses get affected by the economic crisis. Depending on what the business deals in.
Boots deals in basic necessity product so even when there is economic crisis, Boots can survive.
Social
Humans’ behavior is as the result of culture, Boots should see the culture of people there is a lot
of usage of the internet and technology now. Boots should also make online marketing not just
offline.
Technology
Right technology should be chosen. Easier to use by customers and members of staff. Boots has
Customer Analysis System CDAS it can detect purchasing trends etc.
4. Impact of IS
The new IT/IS systems has made a positive change on the organization. Sales have increased.
The use of advantage cards for example is successful with 10 million card holders signing up
within the first year. This has increased sales. Productivity within the company has expanded;

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Boots can now target specific customers with specific needs of products. Boots knows the
purchasing patterns of its customer this will help the company to change its traditional product
category, the new will be customer cantered view.
The new system allows the commercial analyst to have quick real time data without IS support
team.
This makes analyst determine what groups of people are buying and their buying history, this is
the information needed to target these groups of people with promotions. Understand customer
needs and wants gives Boots an advantage over its competitors.
The new system aids in decision making e.g. layout of store, prices location for the new store etc.
As Boots sources external materials, the system helps store data of all activities concerned with
sourced materials.
The information that these systems provide to the team of analysts and marketers are crucial for
the marketing campaigns to be successful. This provides Boots that competitive edge.
4.1 The impact of the new IT/IS system on the culture and productivity of the
organization.
Information is very important nowadays, if the company doesn’t know up to date information the
competitor will have an upper hand.
IS and IT are related to each other. Business need an IS and the IS should aim at sustainable
competitive advantage.
The positive impact of information system on the culture of the organization is there will be no
delay in decision making because the data will be easy to access. E.g. buying behaviors of
customers analysts just need to check in the systems.
Most companies engage third parties to provide an IT and IS. Boots sign a database project with
IBM but Boots choose not to subcontract the analysis because data is so valued. This is the
positive impact on the culture of the company.
I assume that Boots’ staffs do not resist new systems. Because Boots has a very much state of art
technology used at Boots. Culture is important in the organization and will affect the way the
system is developed and must be appropriate with the organization.
Boots analysts use customer data analysis system (CDAS) and they produce buying patterns and
consumer behavior.
5. E-Marketing Strategy
There are a lot of e-marketing strategy that I will advise Boots to use e.g. e-mail marketing this is
a form of direct marketing which uses e-mail to send commercial messages to an audience.
Social media marketing this is the use of social media to market. Nowadays a lot of people are
on social networks.
5.1 E-Marketing strategy to adopt.

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In my view, I would like to suggest to Boots to adopt internet e-marketing strategy like social
media marketing this is because a lot of people now are on social media and because of mobile
devices they will be communicated to in real time.
Not only internet marketing (online) can attract more people and increase customer but also
offline marketing enhance branding of Boots Company and products.
Online marketing can open the company to overseas customer that is the biggest advantage of
online marketing.
In online marketing strategy for Boots, Boots need to make the process of market segmentation.
Having a CDAS it can help in identifying buying patterns for customers. Boots marketers can
market Boots very well because they have data like age, sex, family size/ income, occupation,
education and post address etc.
Boots needs to make one of the marketing strategy geographical segmentation such as region ,
country, county size and climate, city or SMSA, density. This will help segmentation of a target
market for advertising.
5.2 Value of this strategy
Three are 5 elements (5Ps) in the marketing mix.
First and foremost, I would like to advise that Boots should adopt customer relationship
management (CRM) strategy. The first p is people so Boots should have a relationship with the
people. Boots need to make customer relationship management strategy because customers have
option to buy and they have many choices, if Boots can use CRM strategy, they can have
opportunities that include identifying customer needs. Using CRC strategy can create good
image and customer service.
Next is place or positioning nowadays place is not so much an issue because of e-commerce.
Boots need to have an e-commerce strategy in place because customers are all over the world.
What am saying is Boots must have a place or presence on the internet because customer can buy
on the internet now; distance is not so much an issue nowadays.
Products at Boots if well branded can persuade customers that buy products to buy again and
again. So branding is one of the e-marketing strategies and it is, to attract the group of customers
who are brand loyalty.
Promotional strategy is other e-marketing strategy. These are some of promotions business can
have;
New brand promotion
Seasonal promotion
Old products promotion
Sales promotion makes customers to paying inducement like a Boots’ three for the price of two
and two for the price of one.

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Using their card, Boots can identify groups of buyers that can reflect on e-marketing strategy.
Using internet Boots can inform promotion time with e-mail to the customers.
Promotion strategy has become increasingly important to business enterprises it produces
additional sales.
Pricing is a very important strategy too. Customer want competitive price now. Why buy at a
costly price the same product that is cheaper in other retailers.
6. Legal and ethical issues
Ethics can be said to be sets of standards that’s determine whether an action is good or bad.
6.1 Information gathering
Boots need to let consumers know that the company is collecting customers’ demographic data
from advantage cards and it needs to have a clear data policy.
Toiletries are personal items when customers buying them and you monitor the buying of these
products customers may not like it especially females.
Information processing
Processing of sensitive data is not allowed unless there is a strong justification.
Information distribution
Do not share customer data with other outside the company without the consent of the customer
or authorities.
Information usage
Information must be used to provide improved customer service. Every day Boots’ staff should
make back up for customer file. As Boots use the customers’ information it should be aware of
‘the controlling the assault of non-solicited pornography and marketing act.’ This is the act that
makes it a crime to send commercial e-mail message with fake or misleading message.

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7. Conclusion
In conclusion boots have good and powerful aspect as well as bad and weak aspect. Boots should
therefore focus on both this is the only way to remain in business. This is a strategy.
With support and backing from IMB Boots should use to full capacity IT system and
technologies like large database system to come up with big strategies. The IT system and
technologies at Boots can aid in the analysis of their customers that buy from Boots already and
those that have not started yet but they have visited the stores. All data should be gathered in one
system.
Boots have a lot of products and more are still coming. I recommend they come up with a niche.
In the e-marketing strategy, an advice is to come up with online and offline marketing. Boots can
make not only domestic market expansion but also overseas market expansion. The advice is
Boots should make use of e-commerce to expand market overseas.

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8. Appendix
Acronyms and what the stand for.
IS …………………………….information Systems
IT…………………………….information technology
CRM………………………… customer relationship management
CDAS………………………… Customer data Analysis System
UK……………………………..united kingdom

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9. References
1. Boots UK Limited. "Boots UK". Retrieved 20 March 2010
2. Harry Wallop (19 June 2012). "Alliance Boots sells 45pc stake to Walgreens". The
Telegraph
3. Viceira, L. M., &Mitusui, A. M. (2003) Pension Policy at The Boots Company PLC,
Harvard Business Review, Harvard Business School, 27 August 2003
4. “Boots announces £7bn merger deal". BBC News. 3 October 2005. Retrieved 29 May
2013.