LD9634: Designing & Implementing SME Business Strategy for Booths

This report provides a detailed analysis of Booths, a UK-based SME operating in the grocery retail sector. It begins with an overview of the company, its products, competitors, and operational details, followed by an examination of the external environment using PESTLE analysis, identifying political, economic, social, technological, legal, and environmental factors impacting the business. The report then employs SWOT analysis to assess Booths' strengths, weaknesses, opportunities, and threats. Porter's five forces are also used to evaluate the competitive landscape. The analysis further explores Booths' strategic capabilities, including resource identification and competitive advantages. Finally, it discusses potential future strategies, including competitive and Ansoff strategies, and offers recommendations for improvement to ensure competitive survival in the marketplace. The report highlights the importance of adapting to changes in consumer behavior, technological advancements, and regulatory requirements to maintain and enhance Booths' market position.

LD9634 Designing &
Implementing SME
Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview of Company.................................................................................................................1
Organization's environment, external conditions and factors affecting industry.........................2
Analysis of the company's strategic capabilities .........................................................................5
Future strategies for organization................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategies is defined as set of all essential decisions taken by business owner to
complete achieve their business objectives and goals and to prevent the competitive position
within grocery or retail market (Rizos and et.al., 2015). Implementing and designing business
strategies for SME's is very essential as it helps to grow business and managed their performance
or activities within nation. It is the sets of plans and decisions taken by management to grow and
grab the competitive advantages which is beneficial for overall business. The present report is
based on SME's for example Booths that operate their business successfully in Northern
England. It explains background, products or services, competitors and company operations
informations. PESTLE, SWOT and Porter's five forces analytical tools to identify organization's
capabilities to deal with external and internal environmental factors. Value chain framework,
firm resources, competitive advantages in future by implementing value creating plans.
Furthermore, it justifies possible future strategies for Booths as they are using Competitive and
Ansoff strategies and also clarifies recommendation for improvement and to achieve competitive
survivals in marketplace.
Overview of Company
In UK there are many companies considered in Small and medium size organizations, for
example Booth. Booth is the chain of higher end supermarkets, most of company branches is
located in Lancashire, Cumbria, New Yorkshine, Greater Manchester and Cheshire. It is founded
by Edwin Henry Booth in 1847. Company attempt to compete on product quality as opposed to
just cost and develop on motto to sell the best quality products in its shops staffed by talented
assistants or workers. The main products of firm is beverage & tabacco, Food retailing etc. they
provide their better services to customers and efforts to satisfy them. Organization achieved
second platform in list of world's biggest food Retailers. Jack's and Waitorse is one of its
business rivals that try to beat Booths as well as grab the competitive advantages in marketplace
(Mellor, Hao & Zhang, 2014). The founder of this company opened its first shop called The
China House in BlackPool. In 1896 business is incorporated as the private Limited firm. In 1920
they invited all employees to become shareholders that help to retain people with them since for
so long. Firm has remained owned by Booth staff and family and comprise over 250
shareholders. The panel of top designers, analysts, suppliers, architects, journalists and retailers
is brought jointly by national trade publications.
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Company offer and deliver the best quality to people, thus for that reason Grocer rank it
as favourite food retailer in the world. They opened new head office successfully in Ribbleton
and includes environmental friendly characteristic such as using rainwater in toilets, they play
important role in CSR. The chairman of Booths commitment to accountable business functions,
actions and practices. They took personally has created the positive effect both on wider society
and inside the firm. Booths has only 28 stores which means that they cannot have large number
of customers base that might be effect its competitive strategies. Company is independent retailer
in UK, they manufacture products and supply all over the local areas independently. Recently
organization developed Artisan restaurant and food shop, the first one shop is located at Kendal
store. The size of their stores is varied but commonly at between 18,000 and 25,000 square feet,
it will consider as medium sized supermarkets. Booths stores has their own unique identity,
reflect landscape of location. It despite environmental deviation between stores, company brand
remains universally committed to providing its consumer the best and first class shopping
experience.
Organization's environment, external conditions and factors affecting industry
PESTLE analysis-
PESTLE analysis is comprised with many factors that can affect industry or specific
business. It is one of the better tool or framework which is used to examine and monitor macro
environmental components that impact on the organization's businesses performance and
activities. PESTLE is useful especially when specific company is entering into foreign market or
starting new business in marketplace. It is used to identify political, social, economical,
technological, legal and environmental factors that effect on any business planning process of
firms.
Political Factor- Political elements is actually degrees of government engagement in UK
economy. Thus, if government interferes with economy to any level then these external
environment factors become of importance. Government laws and policies, budgets, trade
restrictions, taxation policies, international trade laws, budgets and environmental law is
included in political factors. Due to changes in taxation policies, Booths business performance
affected the most. They have to pay taxes more than now which is difficult for them as they are
not been able to pay because company cannot generate revenue compare to its competitors in
market. High pay taxes impact on firm financial budgets and mostly on its profit margin that is
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not appropriate for business growth. So any changes in taxation policy and laws in future and
current will affect Booths.
Economic factor- All changes in country economy have the significant effect businesses.
GDP (Gross Domestic product), inflation rates and average national income, prevailing interest
rates of market and growth rate of economy is included in economic components that directly
effect on business productivity and profitability (Ghahramany Dehbokry & Chew, 2014). Due to
recession and inflation, Booths overall profitability get affected and lower down its operational
efficiency. It defined as economic factors that impact on company as well its all over functions
after Brexit. After Brexit, most of the small and medium size companies impacted because they
are partly dependent on laws of European Union and UK. Booths is one of the 4.5 million SME's
that operating their business within UK effectively.
Social factor- It is connected to cultural aspects, beliefs and attitudes that affect demand
for organizations services or goods and how company operates. Demographics, ethical issues,
lifestyle trends, consumer buying patterns, work ethic, customer role models and clients opinion
and attitudes is included in socio- cultural factors. Changes in people lifestyle, affects business
overall production process. Most of the people make some changes in their lifestyle, they want to
live healthy and eat healthy products that help to make them fit and healthy and prevent from
illness. Booths need to produce food products according to people preferences in context of
health and safety concern which impact on their manufacturer program.
Company reduce affect of these factors via producing healthy and tasty food and include
nutritious ingredients which help to attract customers.
Technology factor- It is typically one of the important factor of PESTLE analysis tool
which includes growth of technology and innovation of new technology in market.
Advancement within technology affect Booths and its marketing activities. In recent time, there
are many companies using social media platforms and tools included in it which is helpful to
garb the attention of people and increase profitability. It put pressure on Booths company as to
use Facebook, billboard marketing activities that enhance their performance and maximize profit
margin more than before. If firm cannot use and plan marketing through social media sites and
do not adopt new marketing technology they could not been able to attract people and retain the
existing ones with them for longer time.
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Legal factor- Legal factors include changes in health and safety regulations, guidelines
for safety and equality of women, legislations and laws, ethical standards for advertisement and
consumer rights that affect any businesses (Bianchi, Cosenz & Marinković, 2015). According to
change in ethical standards Booths and other companies must setting up their own pages on
social media sites by following ethics for promoting products which impact on their overall
business. If they set up Facebook and Twitter page to advertise alcoholic drinks, it is very
important to country gate and age gate assuring that their page is only accessible to those whose
age over 18 in UK. It helps to increase profitability and build positive market image, but if
Booths cannot follow the rules they face many issues.
Environmental factor- Eco- friendly practices, environmental laws and regulations and
technology to control pollution is the factors that impact on Booths company negatively if they
cannot considered it as whole business structure. CSR is play main role in affecting organization
business performance in marketplace, as accordant to this firm must give its contribution within
corporate social responsibilities that help to enhance their productivity and build good reputation
in market. But company do not follow CSR principles they cannot be able to sustain for longer
term period within economy.
SWOT analysis-
SWOT analysis is another strategic planning method used to support organization and
also help to identify its strengthen, weaknesses, threats and opportunities related to project
planning or businesses competition.
Strengthen-
Booths has constituted the loyal consumer base and strong presence within Northwest
England and also has successfully differentiated themselves through its commitment to provide
high services levels, better quality and offering locally sourced goods to customers. Company is
able to design individually its tailor and stores to each location.
Weakness-
Loss of family management and ownership is one of the weakness that can be considered
in context of Booths. They are not been able to shielded from structural changes taking place in
retail or grocery industry. Company is not been able to achieve economies of scales in
purchasing due to their size that impact on their overall performances.
Opportunity-
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Commitment to local sourcing is one of the best opportunity for Booths that help to
increase profitability its business. Booths is capable to provide customers greater choice with the
help of retaining supporting local communities as well as retain with traditional approach while
reinforcing local identity.
Threat-
Waitrose is one of the Booths business competitors, that poses as one of the biggest threat
for them as through business expansion (Mellett & O'Brien, 2014). Enlargement of Waitrose
across NE is likely to contribute to slower sales progress of late that impact on Booths business
because they are not been able to expand business as they have lack of scale in the past.
Porter's five forces-
Threat of new entrants- Threat of new entrants is high. Grocery market is profitable
that attract new companies which erodes profitability. It impacts on Booths company and their
profitable margin which get lower due to new entries in same marketplace and try to beat them.
Threat of substitute services or products-
Threat of substitute products is high. In grocery market there are many substitute goods
is existed that drive Booths customers towards them and impact on company revenues as whole,
it creates environment or situation for people to switch easily to alternatives.
Bargaining power of customers-
Bargaining power of consumers is High. Booths have low number of clients in market as
it give buyers the power to drive products prices down that impact on company sales as well as
financial budgets.
Bargaining power of suppliers-
Bargaining power of suppliers is Moderate. Booths has range of number of suppliers of
their products which means that distributors do not give power to drive up prices.
Competitive Rivalry among Existing companies-
Rivalry among existing organizations is Moderate. In grocery market Booths
competitors offer the same products that effect company profitability but not much higher level.
Analysis of the company's strategic capabilities
Strategic capability of the business can be defined as the ability of making planning for
the future for achieving success in the future (Ramanathan, Ramanathan & Zhang, 2016). There
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are different tools that will help in evaluating strategic capabilities such as making vision,
mission, values, goals and action plan. This analysis consist of different aspects as follows:
Identification of company resources
Booth is working under the retail sector that sell food, beverage and tobacco in various
parts of Northern England. As it is selling products that can be seen and touched. Tangible
resources will be used in the company to increase the productivity as well profitability of the
company. Effective use of resources in Booth will help in optimum utilization of resources that
will be more beneficial for the company regarding use of resources. These will help in gaining
more knowledge about the product from the marketplace. Booth is the leading supermarket chain
in England that offers varieties of food products for increasing productivity of the company
(Bolisani, & Bratianu, 2017). It is also stated that retail sector companies are more efficient in
dealing with variety of products to the customers that will help in satisfying needs and wants of
the customers.
Competitive advantage
According to the (Yin, & Jamali, 2016). Booth can use strategy that will help in
achieving competitive advantage of the company. It will use marketing mix strategy to compete
in the marketplace. It is necessary to sustain in the market for long term so that it will help in
enhancing growth for future. By doing innovation and bringing new ideas will also help in
getting competitive advantage for future course of action. By doing market research that will
help in analysing the customer trend through which business can be expanded for future use. As
there are different rivalry firms enter into the market coming with substitute product so
consumers are shifted towards them. This will lead to decrease the sales of Booth company. It
can also be gained by taking feedback from the customer that will help in improving quality of
goods and services that is provided by it.
As per the (Agi & Nishant, 2017). Price is another element that is important while
competing in the market. If the price is high and quality is not according to it then customers are
not satisfied with it. Customers are the king of present market so it is necessary to fulfil their
needs and wants. Bargaining power of the consumer is more in the market so seller have to sell
accordingly so that it will not get into loss. Therefore, Booth is also implemented strategies to
sustain in the competitive market. This will help in creating value in the market so that its
importance in the market will increase for future course of action.
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External Analysis
Customers are the foremost factor that affect working of the Booth company. They are
the king in the market so it is necessary to fulfil their taste and preference of them. These will
affect company's operation and that will lead to increase operation cost of the company. In
addition to it technological changes will also affect operation as bringing new technology will
also lead to change in operation cost as it will increase and company have to bear the loss. As
Booth is dealing in retailing sector so it will have to deal with lots of suppliers that will supply
goods in the market (Engert, Rauter & Baumgartner, 2016). Suppliers bargaining power also
influence production and using different technologies in the company that will lead to create
better opportunities in the future.
Political factors are also affected the working of Booth as in some countries political
instability is there that will lead to disturb the operation and that will decrease sales in other
countries. Changes in the exchange rate will have an impact on the export and import that will
lead to decrease profit. During recession period when prices are high at that time purchasing
power of the consumer will decrease and ultimately sales and profit will decrease.
Strength and Weakness of Booth
Strength
It is the leading retailer in the England that provide varieties of food and beverages. Its
brand image is good in the market that will lead to attract more customers towards it. It provides
high quality product to customers that will help in satisfying their needs and wants. It is
recognized as good brand that provide benefit to the consumers.
Weakness
Prices of the product is high that will segregate the customers and the company's sale is
low. Because of the changes in geographical location that will also lead to decrease sales as
different country is having different taste and preferences (Macchion & et. al. (2015). Operation
cost will increase because of changes in the technology.
Future strategies for organization
Competitive and Ansoff strategies is very useful and beneficial plans for Booths company
as they are using it (Klewitz & Hansen, 2014). It helps to strengthen firm operational efficiency
and other activities within business and make them able to beat its competitors in market place.
Recommendation for improvement-
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Booths has only 28 stores as it define that they cannot have high market reputation and
good customer base that impact on their profit margin. Effective marketing plans and effective
communication with its target consumers is the potential future strategies for Booths as
recommended for implementing within overall business structure.
Plan the best marketing plan and communicate with people is one of the best
recommendation for Booths that contribute to make them powerful and able to provide better and
best than others. With the help of effective marketing plan organization can attract people more
towards them as for purchasing their products that increase their consumer base.
CONCLUSION
As per the above discussion it is being stated that company's are using different strategies
to take competitive advantage in the market. It is necessary to sustain in the market for growth in
the future. The above company is dealing in retail sector that require changes in a regular interval
of time as so many competitors are available that will decrease its existence in the market. There
are external factors that affect the working of the company such as political factors that include
instability in the country will affect operations of it. Technological changes in the country will
increase operation cost of the company due to which its profit goes down. This is dealing in
tangibility of resources that can be used in company. For sustaining in the market various
strategies is being used to carry out business operations in the future. It will gain competitive
advantage by producing quality product and satisfying the needs and wants of the customer.
From the above study it can be observed that for retaining in the marketplace it is necessary to
create something unique that will increase profitability as well as productivity of the company.
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REFERENCES
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Online
About the Company. 2017. [Online]. Available through : <https://supply.booths.co.uk/how-we-
do-business/about-the-company>.
Booths brief overview. 2018. [Online]. Available through : <https://www.booths.co.uk/history/a-
brief-overview/>.
SWOT analysis: Booths sale highlights intense competition. 2016. [Online]. Available through :
<https://www.retail-week.com/grocery/swot-analysis-booths-sale-highlights-intense-
competition/7027709.article?authent=1>
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