Business Strategy for Boots Retail: A Comprehensive Analysis

This report provides a comprehensive business strategy analysis of Boots Retail. It begins with an introduction to business strategy and its importance, followed by an application of the PESTLE framework to analyze the macro-environmental factors affecting Boots. The report then delves into the internal environment, utilizing SWOT and VRIO analyses to assess Boots' strengths, weaknesses, opportunities, and threats, as well as its internal capabilities. Furthermore, Porter's Five Forces model is applied to evaluate the competitive forces within the market. Finally, the report concludes with strategic planning recommendations for Boots, integrating various theories and concepts to guide the company towards success. The analysis covers political, economic, social, technological, legal, and environmental factors, along with financial, human, and material resources of the company.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Applying appropriate framework to analyses the macro environment of Boots...................1
P2 Using appropriate frameworks analysing the internal environment and capabilities of
Boots...........................................................................................................................................4
P3 Apply Porter’s five forces model and to evaluate the competitive forces of Boots..............7
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for
Boots...........................................................................................................................................9
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy is the set of competitive actions which business can use in order to
attract customers and compete successfully in market. The report main aim is to select best
business strategy for the firm in order to lead it towards success. Further, the chosen company for
this report is Boots retail company in UK which is a health and beauty retailer company in UK
and currently the company have more than 2500 shops across UK.
The report will describe the macro factor that affect the external business of Boots by
applying PESTLE analysis and further by using SWOT and VRIO model, report will describe its
internal environment and the capabilities. Further, by using Porter's five force model, report will
evaluate the competitive forces of a given market and devise a strategic planning for Boots by
applying theories and concepts.
MAIN BODY
P1 Applying appropriate framework to analyses the macro environment of Boots
Vision:
 The vision statement is to be the first choice for pharmacy, health and beauty for caring
for people and communities around the world.
Mission:
 To help people for leading the healthier and happier lives across the worldwide Company
takes seriously its aims of inspiring healthier and happier world as reflected in their core
values such as trust, care, invention, partnership and dedication.
Objectives:
 To increases the sales of a business up to 20% in next 2 years.
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To determine the macro environmental factor, it is beneficial for the company to use
PESTLE analysis because it s a strategic tool that helps to determine what are the external
environmental factors that effect the business in negative or positive ways. These factors are as
mentioned below:
Political factor: The factor that basically deals with the political situation of the country
and Boots is operated at global level. Therefore, it is quite necessary for the firm to keep
adhering all the laws and run the business as per the stable political situation of a country.
Further, there is now growing political focus as well as pressure on the healthcare authorities
across the world (Teece, 2018). Even the government in UK also make changes in the tax
policies and labor laws through which the business is affected. Apart from this, the trade
restriction Is another political factor that affect the business when it want to expand its business
in another country.
It has been analyzed that UK is one of the most powerful nation which yield a lot of
influence, therefore, Boots have to make strategy in order to cope up with this political factors.
For instance, IN UK there is sudden change in the political system of UK, such that the tax rate
may increases, at that time, company have to make strategy in order to cope up with situation
2
Illustration 1: PESTLE Analysis
(Source: PESTLE Analysis, 2018)

and it is quite necessary for a firm to follow all the trade regulations and legal framework to run
a business smoothly (Barney, 2016).
Economical Factor: It is another factor that affect the business in negative way. The
economic factor mainly deals with the economy of the country which generally fluctuate and it
deals with inflation and industry's economic indicators that affect the business in negative way.
For instance, during inflation rate, the customers spending power also decreases because
company raise their products prices and people are not able to spend high price on such products.
At that time, quoted firm have to be make strategy in order to cope with this situation such as
follow competitive pricing strategy which helps to overcome from this situation (Ghemawat and
et.al., 2018).
Apart from this, there is a sudden increased growth in the strategic buying groups which
also force to down the prices of products and to cope with this situation, Boots has to lower
down the prices of their products so that it will help to raise the sales and satisfy the needs of
their customers as well.
Social Factor: Social factor affect the external environment of the business in adverse
way such that most of the people are generally concern with their health and they prefer to eat
healthy and diet food. Keep it into the mind, government has also given emphasis more on the
healthy eating due to increasing obesity. Apart from this, the increasing aging population also
offers a range of opportunities and threats to pharmaceutical industry. Apart from this, the
company has to provides best healthy and beauty products to their customers (Brandenburger
and Stuart Jr, 2016). Many people also shift towards another business when they find best and
reasonable products, this affect the business in negative way, Such that it lower down the sales.
Now, people are becoming more informed and their expectation are also changed such
that they are becoming more demanding and thus, to satisfy the needs of their customers, it is
quite essential for the firm to keep producing the healthy products and organic beauty items to
attract wide range of customers.
Technological Factor: It is another factor that affect the business in negative way and
recently the advance technology provide wide scope for the companies to raise their business at
further level of success. In the same way, Boots can also take an advantage of Internet in order to
provide online services to their customers. Further to promote their business, it is also necessary
for the firm to use advance tools of marketing such as social media, direct advertising etc.
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through this, the chances of sales increases and thus it provides positive impact upon the business
performance as well (Schwartz and Davis, 2018.).
Legal factor: The retail industry have many rules and regulations and it is also quite
essential for a business to keep adhering all laws for its smooth function. In the same way, Boots
also comply with laws such as Employment law, Discrimination law, Health and safety law etc.
Apart from this, before entering into another country, it is quite necessary fro the firm to
critically evaluate all situation so that it will help to gain high competitive advantages as well.
Further, the business should also make sure that products are good for their customers and Boots
should follow copyright and patent as a intellectual rights.
Environmental Factor: Environmental factor also affect the business such that on an
ethical issue, the sales of organic food and ethical treatment of animals affect the business of
Boots in negative way (Akter and et.al., 2016). As a result, the company's overall performance
got affected and the sales decline. But on the other side, company need to analyze that how their
business and marketing plans link in with the environment issue so that it will help to creates
positive impact upon the business. Apart from this, it should be mandatory to reduce the carbon
footprints and also increasing the energy efficiency as well in order to protect the environment of
the country. Further, it is quite essential for the firm to comply with sustainability act so that it
help the business for its smooth functioning.
P2 Using appropriate frameworks analysing the internal environment and capabilities of Boots
To determine the internal environment of the company, it is necessary to use SWOT
analysis that helps to determine the strength, weaknesses, opportunities and threats of Boots.
This Is as mentioned below:
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Strength: The company has its unit in more than 2500 across UK which means that it has
a brand image with global presence. The customers are attracted due to price cuts specially in
beauty and toiletries. Company also uses advance technologies into their workplace and always
uses strong social campaign to promote their business. Apart from this, Boots also offer the
products at reasonable rates as compared to other company so that it helps to attracted wide
range of customers towards it. Moreover, it has strong customer base because of high quality of
food and healthcare products (Thompson, Strickland and Gamble, 2015). The quoted firm also
refocus and achieve the overall objectives with a strong labor workforce that helps to run
effectively in market.
Weaknesses: Company did not focus on certain market and this lead to affect the
business overall performance such that the focus from the core operations of the business has
also led to loss for over diversification. Thus, it is considered its weakness. Further, the price cut
in different parts of a business may also have an effect on the customers acceptability on
company's boots products prices. Sometimes, using the low raw material on manufacturing boots
also lead to affect the business performance in negative way. Such that the products quality may
not satisfy the customer’s needs.
5
Illustration 2: SWOT Analysis
(Source: SWOT Analysis, 2018)

Opportunities: Having a good quality of products will provide an opportunity to Boots
to expand its business at foreign market through merger or franchising so that it will help to
make its global presence (Pisano, 2015). In addition to this, taking action by reducing the number
of stores and then focusing on improving the remainder of stores would also reduce the cost and
also provide an essential capital that can be reinvest in some other parts of a business. Therefore,
this will help to provide many opportunities to Boots for its better performance and to show its
global presence as well.
Threats: the biggest threat for Boots is such that it faces tough competition from their
rival and sudden changes in supply chain and the system within company may also hinder the
growth rate for the next one year. On the other side, the company also faces threat if the internet
sales of drugs continue to grow then Boots could also lose a significant proportion of its market
share. Therefore, to mitigate this, it is quite essential for a business to keep making strategies so
that the threat can be overcome (Zhao and et.al., 2016).
Further, to determine the internal capabilities, VRIO analysis is tool in strategic planning
which is used by the firm in order to make effective business decisions. The analysis also
provides an information and the results that provides a competitive advantages and for Boots, the
VRIO analysis is as mentioned below:
Financial resources: It includes money, share, bonds and debentures and for Boots, this
resources are valuable, rarely, imitability and organized. Thus, it shows that the company gain
high competitive advantages as well.
Human Resources: It means the people skills, people, knowledge and for Boots, it has
sufficient human resources that clearly shows that it can gain high competitive advantages.
Material Resources: It refers to raw material, facilities, machinery and equipment and
the company has a brand image which means that its material resources are valuable, rare,
imitate and organized and this shows that it gain high competitive advantages for a firm.
Particulars Valuable Rare Imitate Organized Implications
Financial
resources
Yes Yes Yes Yes Realised sustainable
Competitive advantages
Material
resources
Yes Yes Yes Yes Realised sustainable
Competitive advantages
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Human
resources
Yes Yes Yes Yes Realised sustainable
Competitive advantages
Successful
implementatio
n of digital
strategy
Yes No No No Cannot provide competitive
advantage
Distribution
and logistics
cost
competitivenes
s
Yes No Yes No Medium to long term
competitive advantages.
P3 Apply Porter’s five forces model and to evaluate the competitive forces of Boots
To determine the competitive advantages, it is quite beneficial for the firm to use Porter
five force generic strategy, it is the strategic tool to analyses industry and also understanding
underlying levels of profitability as well. Thus, this forces are as mentioned below:
Threat of new Entrants (low): The quoted firm faces low threat of new entrant because
in UK, there is a low chances of entry of new company in Pharmaceutical industry as it requires
a lot of investment and there are no chances of getting success. But on the other side, if new
company may be entering then the company can easily manage by innovating new products and
services because it has been analyzed that new product not only bring new customers but provide
a chance to old customers to buy the products from Boots (Porter five force model for Boots,
2018). Apart from this, the company should also build the economies of scale so that it can easily
lower the fixed cost per unit.
Bargaining power of Suppliers (high): Boots have a strong influence on the suppliers
such that the switching cost of Boots in the industry has decreased and it has been analyzed that
the overall impact of higher supplier bargaining power will help to reach wide range of
customers (Adi, 2015). Even the company also tackle the bargaining power of suppliers by
building efficient supply chain with multiple suppliers and even the company also provide
innovate products by using different raw material so that if the prices of the products go high
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then company can easily shift to another in order to sustain its brand image in market. As the
company have large suppliers whose business is also depend upon firm, therefore, the company
has to provide best quality of products to their customers in order to keep its bargaining power
high.
Bargaining power of Buyers (high): The quoted firm have high buying power such that
as it provides best quality of products with reasonable rates therefore, the firm have good
customer base as well. Further, the company also provide different advantages to their customers
that helps to saves money and raise their loyalty as well. Company keep provide unique products
that helps to increases the brand identity. Apart from this, the brand always keep informing their
customers whenever it introduce new products in market by using advance technologies
promotional tool. Thus, these things keep attracted customers towards the firm and helps to raise
the profitability and sales as well.
Threat from Substitute products (low): the company have low threat of substitute
products because Boots offer a wide range of products to lock the customers and also uses
different key performance indicators in order to improve the performances. This shows that the
firm faces low threat of substitute products (Zhao and et.al., 2016). Further, Boots always tries to
look around a new innovation that helps to keep raising its financial performance and help to
sustain its brand image in market as well. In addition to this, if sometime the company faces the
threat from their substitute products, they it can be easily tackle by bring service oriented rather
than product oriented and the firm should also understand the core need of their customers rather
than what customers are buying. Thus, this helps to lead a business towards success.
Rivalry among existing products (high): the quoted firm faces tough competition from
the rivals such that in this competitive era, all business provides best quality of products with low
and affordable prices. But on the other side, Boots follow the competitive pricing strategy in
order to sustain in this competition in which the prices of the products are changes as per
identifying rival's strategy (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena, 2016). Apart
from this, the company continually made improvement in their stores as well as in marketing to
compete. Thus, in this way, by building sustainable differentiation and by build scale so that it
can compete better will help to increase the market share as well as sustain the brand image too.
Boots use Porter's Generic Competitive strategies for determining the relative position
within the industry in which company is operated. These strategies are useful for determining the
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profitability which is above or below the industry average (Salavou, 2015). The fundamental
basis of above average profitability in long run which is sustainable competitive advantage. This
model involves three generic strategies for accomplishing above average performance in
business such as:
Cost Leadership:
Company sets out to become the low cost producer in their industry. The sources of costs
advantage are varied and depend on the structure of the business. They can involve the pursuit of
economies of scale and proprietary technology and other factors. If company can achieve and
sustain overall costs leadership, so that it will be above average performer in its business.
Differentiation:
Boots tries to be unique in its industry along some dimensions which are broadly valued
by purchasers. It boosts one or more attributes which many purchasers in the industry (Barney,
2015). It perceives as essential and uniquely position itself to meet those wants. It is rewarded
for its uniqueness with premium price.
Focus:
The focus rests on the choice of narrow competitive scope within an industry. The
focuser selects segments or group of sections in the industry. There are two variants of focus
strategy such as cost focus and differentiate focus. Both variables of focus strategy rest on
differences among focuser's target segment and other sections in the industry.
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for
Boots
Ansoff's matrix is the strategic planning tool which aids business determine their goods
and market growth strategy. Ansoff's product and market matrix advised that business attempts
to grow depend on whether it markets new or existing goods in fresh and existing marketplace
(Banyard, 2014). Boots is the largest pharmacy-led health and beauty chain in the UK. Company
has around 2500 stores ranging from localized pharmacies to large destination well-being and
beauty shops. The purpose of company is the aid their consumers look and feel better than they
ever thought possible. In this context, company is utilized the Ansoff's matrix for their product
development across the world. In this matrix, there are areas such as:
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Market Penetration:
The market penetration strategy is the least unsafe since it leverages many of the existing
resource and capabilities. In relation to that, Boots try to accomplish growth within existing
goods in their current markets segments which purpose is to enhance their market share.
Effective maintaining market share will outcome in development in growing market (Ansoff's
Matrix, 2010). There can be exist chances to raise market share if competitors reach capacity
limits. Market penetration has limits. If the firm is to continue to grow, so that market
approaches saturation another strategy must be pursued.
Product Development:
Product development strategy can be appropriate if the company's strengths are regarded
to their specific consumers instead of the particular product itself. The Boots develops new
products and targeted to its existing market segments. It can leverage their strengths by evolving
new products targeted to their existing consumers (Chown and et.al., 2017). The case of new
market development and product development carries more risk than simply attempting to raise
market share.
Market Development:
Market development option involve the movement of additional market segments or
geographical regions. The development of new markets for the good can be good strategy. If the
10
Illustration 3: Ansoff's Matrix
Source: (Ansoff's Matrix, 2010)

core competencies are regarding more to the particular product, so that it is experience with
specific market segment (Banyard, 2014). Market development strategy typically has more than
risky market penetration strategy because Boots is expanding into new market. This can help to
increase the sales and profits of firm.
Diversification:
It is the most risky since it requires both product and market development. It can be
outside the core competencies of the Boots. Diversification can be reasonable choice if the high
risk is remunerated by the chance of high rate of return. In this strategy, Boots grows by
diversifying into new businesses by evolving new products for new markets. This can help to
increase the sales and profits of firm.
With the help of it matrix, it is identified that Boots wants to introduce the existing
products in the new market which called as the market development (Balkhy and et.al., 2016).
Also, company want to launch the new products in the existing market which is called as product
development. This can help to make strategic plan for achieving the strategic objectives and
goals of Boots. This can aid to become the higher position within the industry.
Strategic Plan for Boots:
Strategic planning is management of organizational activity which is utilised to set
priorities, focus energy and resource and ensure that workers and other stakeholders are working
towards common goals, set agreement around intended results (Barney, 2015). It is the result of
the strategic planning process. The strategic plan provides direction by determine their strategic
concept to business. This can help to increase the sales and profits of firm. Boots is the largest
pharmacy-led health and beauty chain. Different steps includes in strategic plan such as:
Mission, vision and Objectives:
The vision statement is to be the first choice for pharmacy, health and beauty for caring
for people and communities around the world. The purpose of Boots is to aid people for leading
the healthier and happier lives across the worldwide (Zahurul and et.al., 2016). Company takes
seriously its aims of inspiring healthier and happier world as reflected in their core values such as
trust, care, invention, partnership and dedication. Company will utilised the SMART objectives
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which involves specific, measurable, relevant, time bound and achievable for effective strategic
management plan.
Internal Analysis (SWOT):
Strengths  Company has powerful research and
development team and offer optical
solutions to customers.
 Boots is offering innovative goods
across the broad range.
Weaknesses  Company is depended upon the UK
markets which leads to fluctuations.
 There are not present retail stores of
Boots as compared to their challengers.
Opportunities  Boot's grow the business through
expanding into other nations (Zahurul
and et.al., 2016).
 With tapping emerging economies for
better international operations.
Threats  There are high level competition from
localized and international brands in
pharmaceutical industry.
 Large regulatory cost can lead to
decreasing revenues for selected
company.
External Analysis (PESTLE):
Political Factor  As per the international regulations, company has
come under the raising the global pressure.
 As per taxation policies, company has benefited
from lower taxation policies.
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Economic Factor  High level of fluctuations in currency markets
which involve in economic factor that impact on
sales of Boots (Chown and et.al., 2017).
 Increasing inflation rate which impact on sales of
selected company.
Social Factor  High level of education in the existing market of
Boots which impact on sales and promotion of firm.
 Broad population in getting access to essential
services which has been result of raising investment
in public services.
Technology Factor  The low cost of production with the help of
adopting the latest technology in sales and
marketing sector (Balkhy and et.al., 2016).
 Enlargement of mobile technology which has
transformed expectation of consumers.
Actions:
Company adopted many actions and strategies after analysing the internal and external
analysis of business and business environment. In order to that, Boots needs to follow strategies
and actions in which segmentation, targeting and positioning help to them for implementing
strategic plan as well as achieving the mission, visions and objectives (Banyard, 2014). In
relation to that, company needs to focus on health and beauty conscious people. Also, they are
targeted on upper, middle class and middle class with the demographic segment. They also focus
on women and home makers towards their product and services. Through retail store services,
company helps to consumers look and fell at their best. This can help to increase the sales and
profits of firm.
In this context, company is utilised grand strategies which is general concept for
accomplishing the strategic goals of business. There are three broad categories such as stability,
growth and retrenchment strategies (Barney, 2015). In stability strategy, it is intended to ensure
13

that continuity in the functions and performance of Boots. After that, it is designed to raise the
sales and profits of firm in growth strategy. In retrenchment strategy, it designs to reverse to
growth strategies which involves negative sales and profitability trends of firm. Company also
utilised BCG matrix as action plan which includes star, question marks, cash cows and dogs.
BCG Matrix:
This BCG Growth Matrix is portfolio planning model which is based on the observation
that company's business unit can be categorised into four combination of market growth and
market share relative to the largest challengers.
Monitoring and Implementation:
It is the necessary to monitor and implement the strategic plan through adopting different
techniques and tools such as formulate the strategies and implement within the Boots. It helps to
achieve the strategic objectives and goals of business. Therefore, company needs to monitor
overall strategic plan than implement in the business (Salavou, 2015). The strategies which
includes structure, culture and leadership within the company. Thus, monitoring and
implementing the strategies is the essential part for achieving the strategic goals and objectives
of business. In this context, company needs to improve and develop the structure, culture and
leadership within the business. This help to increase the promotion, sales and market share of
Boots. Also, this can be aid to make the higher position and competitive advantages within retail
and health sector. Boots face different risk factors such as utilization of financial resource,
14

technological risk, government regulation, loss of key personnel, competitive factors, high
implementation costs and other factors affected on making strategic plan.
CONCLUSION
By summing up above report it has been concluded that having an effective business
strategy will help a business to be successful in the market. From the study, it has been
concluded that by applying PESTLE analysis, macro factor affect the external business
environment and also cause hindrances in the path of success. Further, SWOT and VRIO are also
used in order to determine the internal environment and capabilities of Boots and this shows that
the business has a brand image in market and having good quality of products, the company also
gain high competitive advantages in market. Ina addition to this, in order to evaluate the
competitive forces, Porter five force and Porter generic strategies are used in which it has been
concluded that the company follow competitive pricing strategies. Further, by using Ansoff
growth vector matrix, report concluded the strategic direction and through effective business
plan, report provide a strategy for its future success as well.
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