Boots UK Case Study: Business Strategy and IT Implementation

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MANAGING INFORMATION AND TECHNOLOGY

Table of Contents
INTRODUCTION............................................................................................................................. 2
INTRODUCTION OF BOOTS............................................................................................................ 3
CURRENT BUSINESS STRATEGY OF BOOTS.....................................................................................5
PRODUCTS AND SERVICES OF BOOTS............................................................................................5
ANALYSING POLITICAL, TECHNOLOGICAL, LEGAL AND ECONOMIC ENVIRONMENT OF BOOTS....7
ANALYSING PRIMARY ACTIVITIES OF PORTER’S VALUE CHAIN AND ANY 3 OF THE 4 SUPPORTING
ACTIVITIES....................................................................................................................................10
REFLECTION ON THE DEPLOYMENT OF IT IN BUSINESS AND USE OF INNOVATIVE IDEAS TO
IMPROVE BUSINESS PROCESSES..................................................................................................13
CONCLUSION............................................................................................................................... 15
REFERENCES.................................................................................................................................16
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INTRODUCTION
This assignment takes into account Boots, a health and beauty retailer as well as a pharmacy
chain in the UK. It includes the analysis of internal as well as external business environment of
boots. Also, this assignment includes an assessment of the role of information technology that
enables Boots to gain competitive advantage.
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INTRODUCTION OF BOOTS
John Boot opened the first herbalist store that offered a reasonable alternative to traditional
medicine in 1849 in Nottingham. In 1870, Mary Boot and Jesse started trading as M & J Boot
Herbalist by selling herbs including plants, roots and flowers that were collected locally, dried
and then powdered (Boots UK, 2019). The positioning of Boots as a store that offers traditional
medicine at greatly reduced prices was done by launching a widespread advertising campaign
under the slogan ‘Health for a shilling' in 1877. Boot & company Ltd established in 1883 and a
first qualified pharmacist, Edwin Waring was appointed in 1884 (Boots UK, 2019).
The company was renamed to Boots Pure Drug Company Ltd in 1888 followed by opening a
flagship department style store in 1892 in Nottingham. Boots athletic Club was founded in 1895
and also Boot Booklover’s Library was established in 1898 (Boots UK, 2019). A key synthetic
chemical such as aspirin was researched and manufactured by Jesse and a team of experts
during the First World War as Britain lost the chemicals supply from Germany. The product of
Boots became available for buying in India in 1915. In 1920, the United Drug Company of
America purchased Boots Pure Drug Company (Boots UK, 2019).
Stabilarsan an effective treatment for Syphilis was the first pharmaceutical patent registered by
Boots and was approved by the Ministry for health for using it in public institution in 1921.
Boots was licensed by the British Medical Research Council for undertaking mass production of
the newly discovered lifesaving drug in 1923 (Boots UK, 2019). The Boots store opened a 24-HR
pharmacy in Piccadilly Circus in 1925. The British ownership was undertaken in 1933 and also
opened a 1000th Boots store in Scotland. Owen Williams designed the D10 Factory on the
Beeston Site, epitome as scientific credentials of the company. Number Seven range was
originated by the company to provide prestigious as well as affordable beauty range (Boots UK,
2019).
Suntan creams of Boots become popular in 1939 to fulfil the desire of customers for a non-
greasy lotion. Penicillin was mass produced by Boots in 1944. 1947 was the year of expansion of
international wholesale and manufacturing business (Boots UK, 2019). Self-service stores were
introduced by Boots in 1951. In 1970, the Boots Charitable Trust was set up. Boots (retail
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buying) Hong Kong Ltd was founded in 1984. The Queen’s Award for Technological
Achievement was received by Boots for discovery plus development of Ibuprofen in 1985. A
range of skin, hair and bath product under Natural Collection was launched in 1989. Alliance
boots were formed by the merger of Boot Group and Alliance Unichem in 2006, which was later
privatised in 2007. 45 per cent stake was acquired by Walgreens an American drug store chain.
Alliance Boots and Walgreens combined to form Walgreens Boots Alliance in 2014 (Boots UK,
2019).
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CURRENT BUSINESS STRATEGY OF BOOTS
The company Boots aim to be the first choice of the people and communities for pharmacy,
healthcare and other beauty range. Its strategy focuses on its core business activities of
retailing of beauty and pharmacy-led health products and wholesaling and distribution of
pharmaceutical products (Nagaich and Sadhna, 2015). It also focuses on increasingly developing
as well as internationalising their product brands. The strategy is outlined by Boots by
strengthening as well as leveraging its identity as a predominant Feel-good specialist of the UK
across both divisions of pharmacy and health and beauty so as to drive sustainable profit
growth.
The company is well aware that today’s customers will not be satisfied with its heritage;
therefore it has geared up to completely transform its beauty offerings and stores owing to the
challenging high street conditions (Boots UK, 2019). It has decided to replace their traditional
beauty counters with discovery areas, trending zones and live demonstration areas. It also
plans to introduce over 200 beauty specialists along with present existing brand experts in in-
stores so as to give the right advice to customers after undergoing immersive training on
products.
PRODUCTS AND SERVICES OF BOOTS
The company Boots have planned to launch 20 new brands and 805 products in its stores over
the next six months. The company has around 2500 stores in the UK that ranges from local
community pharmacies to large destination health as well as beauty stress with the purpose to
helps the customer in looking and feeling better than they have expected (Hammett, 2019). The
talented teams of healthcare professionals deliver individuals conversation as well as
personalised support to inspire positive health choices today as well as in future.
The company offers complete care to each individual through the combination of opticians,
pharmacy, hearing care and range of consumer health care. The company also offers beauty
and skincare products along with makeup hair and other accessories (Goundrey-Smith, 2012).
In all, Boots sell prescription medicines through their pharmacies, retail medicines, varied
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beauty and health products including related electrical products, clothing for maternity wear,
baby and toddler ranges, opticians, hearing care, photography and food and drink for example
Boots delicious.
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ANALYSING POLITICAL, TECHNOLOGICAL, LEGAL AND ECONOMIC
ENVIRONMENT OF BOOTS
The external environment impacts the business operations of the Boots, therefore, some of the
factors of the external business environment are undertaken to explain their impact on Boots:
POLITICAL: boots has observed increasing political focus as well as pressure on health care
authorities across the world. In the recent decade, due to deregulation in the UK economy, an
increase was observed in the level of competition as various superstores put their efforts in
opening pharmacy stores. The business of Boots is subject to the widespread laws as well as
regulation at the local, state, federal and international levels, so any change or amendments to
such laws may result in a significant impact on its operations and financial performance. These
changes can result in the potential impact on the business, employees, customers and
communities (McGettrick et al., 2014).
The company is actively involved in activities related to politics and policy as it related to the
business form perspective of healthcare, pharmacy and retail. Long term profitability of Boots
impact can be impacted by the political factors such as political stability, taxation, government
bureaucracy and interference, trade and labour law policy, trade restrictions, product labelling
and other requirements in particular country or market (Guinzoni, 2015). As the company
operates in over 25 countries, it is exposed to different types of risks related to the political
environment and political system. The company needs to diversify the systematic risks of the
political environment in order to achieve success in the dynamic healthcare industry across
different countries.
TECHNOLOGICAL: development and emergence in technology result in increased competencies
and further enhance the services and products efficiency for improvement in different aspects
such as monitoring and treatments of the business. The operational activities of Boots include
technology as it helps in making effective decisions and management (Webster and Spiro,
2010). For example, Demand forecasting and Replenishment system in business procedures
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were implemented by Boots to improve its logistics system. Purchasing trend could be
effectively analysed by technological solutions.
Sales Assist was an IBM MobileFirst for iOS app powered by analytics was launched by Boots
together with IBM in 2016 so as to make it simpler as well as easier for the customer to get hold
of the products they require and improve customer retail experience (Boots UK, 2016). The
announcement was made on the acquisition of Wiggly-Amps Limited which is a health
technology company by Boots UK to develop the accessible digital solution enabling the
patients and GPS for better management of their prescription requirements (Hammett, 2019). A
7-year partnership has been signed between Microsoft and Walgreens Boots alliances for
developing new healthcare technology as well as retail innovations for boosting technological
capabilities (Sillitoe, 2019).
LEGAL: various legislative and regulatory restrictions are imposed by the government on the
pharmaceutical industry. Changes in laws and regulations such as employment law, consumer
law, trade law and social obligations affect the operations and business of Boots. The
intellectual property rights of an organization cannot be effectively protected in a number of
countries due to lack of robustness in the legal framework as well as institutions (Fox, 2013). It
becomes difficult for organizations like Boots to enter or operate in such market as it may lead
to the theft of secrets of Boots thereby affecting the competitive edge.
Boots must consider certain legal factors such as consumer protection, e-commerce laws,
discrimination law, antitrust law, health and safety law, employment law and data protection
along with keeping an eye on changes or amendments (Durán-García et al., 2011). The
uncertainty in future in the Affordable Care Act impacts on Walgreen Boot Alliance. It is
essential for the company such as Boots to ensure that the health care products and services
are goods for the customers according to legal concern.
ECONOMIC: recently the exit of Britain from European Union resulted in political as well as
economic instability as it resulted in fluctuations in currency market affecting company’
revenue and profitability (Harvey et al., 2014). The role of economic factors is crucial in
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successful operations of business however the company had effectively managed its business
regardless of economic turmoil in 2008. The economic factors such as inflation rate, the
elasticity of supply and demand, interest and exchange rates and economic stability impact the
revenues and profitability of the business.
These factors of a macro environment determine the aggregate demand as well as aggregate
investment in an economy whereas the factors of microenvironment such as competition
influenced the competitive advantage of Boots. Prices can be forced down by the strategic
groups due to their increasing growth in buying (Hillblom et al., 2014). The growth trajectory of
healthcare and beauty industry and boots can be forecasted by using economic factors of the
country such as inflation and growth rate along with economic indicators of industry such as
consumer spending and growth rate in the industry. The economic and trade protectionism
measures and policies of Trump administration affect the import and export of healthcare and
beauty products in the US resulting in an impact on Walgreen Boots Alliance.
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ANALYSING PRIMARY ACTIVITIES OF PORTER’S VALUE CHAIN AND ANY
3 OF THE 4 SUPPORTING ACTIVITIES
Porter’s value chain analysis is one of the powerful tools for the managers in order to recognise
the key activities within the firm that forms its values chain and has potential to gain
sustainable competitive advantages for the company.
Figure 1 Porter’s Value Chain Analysis
Source: Hillblom et al., 2014
PRIMARY ACTIVITIES:
The primary activities of the value chain of Boots are directly involved in producing the
products or services and selling them to target customers. The below is given the analysis of
primary activities of the value chain for improvement in the performance of Boots:
INBOUND LOGISTICS: strong relationships with suppliers are to be essentially developed by
Boots as their support is important in receiving, storing and distributing the product. Various
challenges may be faced by Boots in phases of product development without analysing the
inbound logistics (Harvey et al., 2014). Boots requires analysing the inbound logistics in order to
focus on each aspect of the transformation of raw material into a finished product. A long term
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partnership of Boots with IBM resulted in improving business performance as Information
Technology solution provided by IBM assisted Boots in managing a large amount of information
as well as getting accurate reports related to service performance, stock level and activities of
suppliers (Boots UK, 2016).
OPERATIONS: also Boots need to analyse its operational activities after the influx of raw
materials. Raw materials are processed and converted into end products to be launched the
same in the market. Machining, assembling, packing and testing along with equipment repair
and maintenance are some of the operational activities. Manufacturing and service operation
are included in it (Nagaich and Sadhna, 2015). Effective operational activities are essential to
improve productivity, maximise efficiency and ensure the competitive success of Boots as it also
helps Boots in achieving consistent economic growth, maximise profitability as well as set a
powerful basis for competitive advantage.
OUTBOUND LOGISTICS: activities carried out to deliver the products to the customers by
passing it through different intermediaries are included in outbound logistics. Material
handling, order processing, warehousing, scheduling, transporting and deliver to the endpoint
are included in activities of outbound logistics. Outbound logistics are optimised by Boots in
exploring the sources of competitive advantage and achieving the growth objectives of the
business (Goundrey-Smith, 2012). The customer satisfaction and growth opportunities are
maximised for Boots by timely management of outbound activities with optimal costs and
ensuring the minimum negative effect of processes of product delivery on its quality. Specific
significance is given by Boots to the activities of the outbound value chain in offering their
health and beauty care products as it concerns the health and wellbeing of end customers.
SECONDARY OR SUPPORTING ACTIVITIES:
The role of support or secondary activities is important in coordinating as well as facilitating the
activities of the primary value chain. The explanation of the benefits of analysing the support
activities is as below:
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