TBUS 502: Integrated Capstone Project - Blackmores Company Analysis

This integrated capstone project analyzes Blackmores, a prominent natural health company. It begins with an executive summary highlighting the company's history, vision, and market capitalization. The project includes a detailed background of Blackmores, its business strategies, and a PESTLE analysis to assess the political, economic, socio-cultural, technological, and environmental factors impacting the company. The project identifies key business issues, such as supply shortages and declining market share, and outlines the outcomes of strategic changes implemented by the company. It provides recommendations for improvement, including enhanced market research, quality control, and supply chain management. The conclusion emphasizes Blackmores' position in the natural health industry and suggests strategies to maintain its competitive advantage. The report covers the company's operations, market share, and product range, along with an analysis of its financial performance and international presence. The project also examines the company's strategies for expansion, partnerships, and customer service. The analysis provides insights into the challenges faced by Blackmores and proposes solutions to ensure its continued success and market dominance.

Integrated Capstone Project (Management) 0
Title: Integrated Capstone Project (Management)
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Student Name:
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Company Name: Blackmores
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Integrated Capstone Project (Management) 1
Executive Summary
Blackmores is a company dealing with natural health products since the 1930s, when it was
founded by a naturopath Maurice Blackmore. The company has witnessed high grounds of
progress and even dexterity when it comes to capturing the markets in foreign nations. The
vision and mission of the company only focus upon improving the lifestyle choices of customers
through a definitive approach and this is one of the biggest reasons why the company has been
able to ensure high grounds of competition even in an unstable market. The analytical report
presented here deals with the background of the company and the various products provided as
well. A pastoral analysis has also been conducted in order to highlight the key factors that
actually motivate progress in the company. The market capitalization of the company today
proves to be 2 billion and more than 850 people remain employed. This report highlights the
very issues that the company faces and the reasons as to why multiple changes were adopted.
The outcomes of these changes and possible recommendations have also been included in order
to adopt a broad perspective.
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Table of Contents
Introduction......................................................................................................................................4
Analysis...........................................................................................................................................4
Background..................................................................................................................................4
Business Strategy.........................................................................................................................5
PESTLE Analysis........................................................................................................................6
Description of Business Issues........................................................................................................8
Outcomes.........................................................................................................................................9
Recommendations............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
The company of Blackmores is selected here for a detailed assessment of the various
issues faced by the organization. Information about the company along with its background is
also provided in an adequate manner. The size of the industry, its history, available resources,
and market share have also been highlighted in order to make the information complete. The
company has been facing quite a few business issues such as low supply and declining share
values in the market and the research highlights the various reasons that actually motivate a
change in the first place. The authorities in the company had to completely change strategies and
the various outcomes arriving directly from them have also been highlighted to a great extent.
The analysis also contains recommendations through which the company can profit and gain
significantly without issues and complications.
Analysis
Background
Blackmores proves to be one of the most leading natural help companies based in
Australia. The company follows the vision of Maurice Blackmore, who remains the chief
founder of the organization. The vision focuses upon being passionate about natural health and
even inspiring people to gain the utmost forms of control over their well-being (Braun, 2015).
People are also encouraged to invest significantly when it comes to leading a healthy lifestyle.
High-quality products are developed by the company and also services that help in the delivery
of a more natural approach to health. The company has a lot of expertise in the domains of
vitamins, minerals, nutrients, and herbs (Wickramasinghe, 2012). The company was founded in
the 1930s, where the first health food shop was opened in Brisbane. Today the organization has
grown to be an ASX 200 company in the market capitalization is as staggering as $2 billion. The
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organization employs more than 850 people and manufactures extensively in the domains of
vitamins, herbal supplements, and minerals. The products are sold in more than 17 markets
across the Asia-Pacific region. The product range provided by the company extends to
cholesterol, sleep, stress, eye health, and arthritis as well. The organization has been operating
for more than 18 years in the Australian market and holds more than 20% of the market share
(Brown-Paul, 2016). International sales constitute 23% of the revenue. The company had its
initial beginnings in the 1930s due to the missions and visions of an English immigrant Maurice
Blackmore. The Blackmores Group has entities such as BioCeuticals, Blackmores Institute,
Fusion Health & Oriental Botanicals, Impromy, IsoWhey, and Pure Animal Wellbeing (PAW).
The current share price of the company proves to be 93.10 AUD. With headquarters in New
South Wales, the subsidiaries include Pat Health Limited, FIT-BioCeuticals. The company also
deals with products such as pregnancy vitamins, fish oil, multivitamins, probiotics, magnesium,
herbs, nutrients, and minerals. Top products include Acidophilus Bifidus, Ashwagandha+,
Active Magnesium and Bilberry Eye Support.
Image Source: (www.smartcompany.com)
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Credibility and trust in the company of Blackmores prove to be the sole competitive
advantage present in the industry (Cai, 2015). For the past three years, the company has been
awarded as the most trusted supplement and vitamin brand by Reader's Digest. While employing
the core business strategies authorities at the company understand that countries in Asia are quite
different and requires a different marketing and sales strategy.
Business Strategy
While trying to ensure growth and prosperity authorities in the organization focus upon
company expansion. The strategy involves recruiting local people in each country who have been
to universities in Australia or have worked for several Australian organizations in the past. The
representatives operate on an independent note in places such as Thailand, Hong Kong,
Malaysia, Korea, and Macau (Di Costa, 2017). Another dominant strategy includes partnering
with Traditional Chinese Medicine and other healthcare retailers to ensure revenue growth. The
company focuses on establishing product awareness across the entire region. One such
partnership is with Eu Yan Sang which proves to be one of the most leading healthcare
companies based in Singapore.
PESTLE Analysis
Political
The present political system in Australia is very stable and this is the reason why the
company in the retail industry has not been impacted by the factors. The company also benefits
extensively from the trade agreements present with other countries, including New Zealand
(Evans, 2015). Economic relations and trade agreements with the country assist Blackmore in the
domains of lower taxes and higher grounds of security while trading even outside Australia. The
company also faces similar advantages due to the agreements made with China.
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Economic
When the economy slows down, the profits of the company can get reduced. 81.23% of
profits arrive from Australia and 19.57% profit hails from the continent of Asia. New Zealand
assures a profit of 1.54%. They can be a slight economic disadvantage present in the market of
China, but New Zealand has shown no signs of change for the past few years (Pash, 2016). The
growing unemployment rates have led to a decrease in profits extensively.
Socio-cultural
As Australia has equal opportunity rights for women in the workplace Blackmores has
ensured 70 percent job roles and positions for female workers. Blackmores is continuously trying
to invest in people through various training and development programs. The company has also
raised more than $1.3 million for charity, in which more than 32,000 people sought participation.
Employees in the organization also take interest in cleanup campaigns that benefit society
extensively.
Technological
Blackmores has tried to invest significantly in the domains of technology by improving
its supply and chain distribution network. Online customer service and support have also
improved to a great extent and this has ensured high grounds of competitiveness. Modern
technology has been made use of in an adequate way and various smartphone applications have
also been developed.
Environmental
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The company complies with all the environmental laws present in the country as it has a
long-term commitment when it comes to environmental sustainability and social responsibility as
well. The issues of packing waste have been decreased to a great extent across all the aspects of
the company. The authorities also participated in the National Packaging Convention. Various
recycling activities have also been undertaken so that wastage can be processed in an efficient
manner (Hope et al., 2016). The focus also remains upon conserving energy. Authorities in the
organization have adopted sustainable business practices along with responsible product
sourcing.
Description of Business Issues
The company has been facing extreme challenges due to the declining market share and
there has been a shortage of supply as well. The shares of the company fell by 16% due to the
ongoing shortages of ingredients such as whey protein and fish oil. Lack of supply proves to be
the most dominant challenge and the suppliers of the company have struggled extensively it
comes to responding to the increased requirements. Blackmores’ performance could greatly be
affected in the second half of the financial year due to this lack of supplies (LeDoux et al., 2015).
Though supply issues are not usually faced in the country of Australia, care must be taken
regarding the fact that the organization has always sought rapid expansion in other nations where
supply can become a tough challenge. This is the reason why new strategies must be developed
so that the market grip can be maintained to a great extent. Lack of supplies can provide
competitors the utmost advantages in such situations leading to a further decline in market
shares. Another dominant issue was the long lead times required to develop natural health
products and this is the reason why shortening these lead times and prove to be extremely vital
when it comes to improving sales (McGuire, 2016). Quality control is important for the
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authorities in the organization, but shortening the lead time has gained prominence over the years
due to the multiple disadvantages faced.
Such challenges motivated the authorities in the organization to adopt various changes
when it came to business administration so that the supply demands can be met, quality can be
controlled, the market grip can be restored and the lead time in product preparation can also be
reduced to a great extent as well.
Outcomes
The organization has tried to partner up with various suppliers and it also sought the
assistance of government authorities when it came to networking appropriately. Earlier the
organization only focused upon supplies that were easily available from within the country. A
lack of supplies has now pushed the authorities across international boundaries where a high
amount of control is being exerted upon price and even quality at the same time as well (Mudditt,
2018). Authorities in the organization are also trying to adopt modern technologies and product
manufacturing units through which the lead time in manufacturing can be controlled to a great
extent. It has partnered up with other manufacturing organizations in order to further the research
and development sessions. The company has also established contracts with companies who
excel when it comes to delivering end products in a controlled amount of time. Such practices
and actions have grown the networks of the company and a lot of the supply issues have been
tackled to a great extent as well.
Recommendations
The recommendations in such scenarios prove to be quite simple enough as Blackmores
needs to incorporate rapid changes in strategy when it comes to fulfilling the lack of supply.
Experts in the domains of market research and quality control must be invited into the
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organization so that the new suppliers hired by the company can be examined and investigated to
a great extent (Shergill-Bonner, 2013). Quality control might become an issue and the products
of the new suppliers must be tested adequately before implementing any finalize decisions. This
strategy change can directly lead towards prosperity and the market share will start developing in
a constant manner as well. The company will gain excellence in the industry to which it belongs.
As other organizations are being invited in order to gain production expertise, the lead time can
get reduced significantly with time. The company will be able to produce more products within a
shorter period of time leading to the higher grounds of efficiency and prosperity in market
revenue.
Conclusion
Blackmores has always remained one of the leading natural health companies located in
Australia and it has provided tough competition to all the contemporary organizations when it
came to quality, the variety of product and price at the same time as well. The company's passion
for natural health inspired a lot of customers not only in Australia but in other nations as well,
leading to the high grounds of growth and prosperity. It has captured the market of vitamins,
herbs, nutrients, and minerals and has gained dominance in the markets of Asia and New
Zealand as well. Though the company has been facing some issues in the domains of supply and
lead time management, collaboration with more suppliers and experts brought in from foreign
companies can help extensively, when it comes to controlling these lacks and deficiencies.
Though the stock market revenue and market shares have diminished to a great extent, the new
policies can easily help when it comes to gaining back the original position.
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References
Braun, L., 2015. Be our guest: A focus on evidence. Australian Pharmacist, 34(4), p.14.
Brown-Paul, C., 2016. Functional foods. Practical Hydroponics and Greenhouses, (172), p.24.
Cai, P., 2015. The long game. Company Director, 31(11), p.50.
Di Costa, N., 2017. Supporting pharmacy practice: Micronutrients and supplementation in
preconception, pregnancy and breastfeeding. Australian Pharmacist, 36(11), p.44.
Evans, S. (2015). Blackmores to give six weeks' bonus pay for 900 staff after profit surge.
[online] The Sydney Morning Herald. Available at:
https://www.smh.com.au/business/workplace/blackmores-to-give-six-weeks-bonus-pay-for-900-
staff-after-profit-surge-20150825-gj6v9c.html [Accessed 3 Apr. 2019].
Hope, D.L., Dickfos, S. And King, M., 2016. Who holds the keys. Australian Pharmacist, p.60.
LeDoux, M.A., Appelhans, K.R., Braun, L.A., Dziedziczak, D., Jennings, S., Liu, L., Osiecki,
H., Wyszumiala, E. and Griffiths, J.C., 2015. A quality dietary supplement: before you start and
after it’s marketed—a conference report. European journal of nutrition, 54(1), pp.1-8.
McGuire, T., 2016. Brands: More than a name... PS Post Script, (Nov 2016), p.5.
Mudditt, J., 2018. Market forces. Company Director, 34(2), p.38.
Pash, C. (2016). Blackmores shares drop below $100 as sales fall. [online] Business Insider
Australia. Available at: https://www.businessinsider.com.au/blackmores-shares-drop-below-100-
as-sales-fall-2016-10 [Accessed 3 Apr. 2019].
Shergill-Bonner, R. (2013). Micronutrients. Paediatrics and Child Health, 23(8), pp.331-336.
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Wickramasinghe, P. (2012). Micronutrients in childhood nutrition. Sri Lanka Journal of Child
Health, 41(4), p.157.
Image Reference
Smartcompany.com.au. (2019). [online] Available at:
https://www.smartcompany.com.au/content/uploads/2016/12/Blackmores-4.png [Accessed 3
Apr. 2019].
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