Extended Project: Strategic Analysis of Boots Pharmaceutical Industry

This project undertakes a comprehensive analysis of Boots Pharmaceutical, a leading UK-based pharmaceutical company. The study begins with an overview of Boots' background, highlighting its history and strategic position within the industry. It then delves into an internal analysis, examining product differentiation, brand values, marketing strategies, human resource management, and supply chain management. The project further explores the external environment using Porter's Five Forces model, assessing the threats of new entrants, substitute products, bargaining power of suppliers and customers, and the intensity of rivalry among competitors. The conclusion synthesizes the findings and offers recommendations for strategic improvements, aiming to enhance Boots' competitive advantage and market performance. The project emphasizes the importance of adapting to market dynamics and optimizing internal processes for sustained success. The report also mentions the alliance with Walgreens and its impact on the company.

EXTENDED PROJECT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
BACKGROUND OF BOOTS PHARMACEUTICAL...................................................................1
Strategic position of Boots Pharmaceutical Industry.......................................................................1
Internal analysis of Boots Pharmaceutical Industry.........................................................................2
Product Differentiation...............................................................................................................2
Brand Values...............................................................................................................................2
Marketing....................................................................................................................................3
Human resources management ..................................................................................................3
Supply chain management..........................................................................................................3
External environment of Boots Pharmaceutical Industry...........................................................4
CONCLUSION AND RECOMMENDATIONS............................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
The present project is completed after taking base to the Boots company which is
operating in pharmaceutical industry of UK. Apart from this, it is one of the leading firm which
provides pharmaceutical and beauty products across the UK and republic of Ireland. Key purpose
of the present study is to internal environment of the Boots pharmaceutical firm. Apart from this,
product differentiation, management of human resources as well as supply chain management of
the selected company is explained under this project. At the end of study, external environment
of Boots is described by taking base to the Porter's Five Forces analysis. On the basis of these all
the analysis, recommendations are provided to the cited firm in order to make proper
modifications within entity.
BACKGROUND OF BOOTS PHARMACEUTICAL
Pharmacy industry are crucially required to be present. The selected organisation Boots
Pharmaceutical Industry is founded 168 years ago in Nottingham, United Kingdom with an
objective to improve the health and well-being of local communities. The entity headquarters in
Beeston, Nottingham, UK. Initially, it started with herbal medicines that were sold in year 1860.
This long span of the company helped in creating a tremendous brand image in the
pharmaceutical sector. The area served by the Boots Pharmaceutical Industry includes UK,
Ireland, Norway, Thailand. etc. However, it may be recognised that the major among them are
UK and Ireland. There are about 25,00 stores in these place if combined. Further, around 70,000
people are employed in UK in the cited firm. In context to Ireland, this figure is 1,900. The
company recently alliances with Walgreens which helped in strengthening the brand image.
After the merging the number of the employees raised to 400,00 and the total operational
revenue gets doubled (Walgreens Boots Alliance, 2017). According to the annual report, the
statistics of 2016 were observed to be favourable to the alliance. The gross profit is obtained to
be 53.1 millions whereas the operating income is 44.7 millions.
Strategic position of Boots Pharmaceutical Industry
In order to examine the strategic position of any entity, it is necessary to analyse both the
internal and the external environment. This analysis will help in understanding the present

position that Boots Pharmaceutical Industry has. In addition to this, the major emphasis is given
to the competitive advantage. This technique helps in becoming a leading player in front of the
major competitors that will directly increase the company sales (Oelze and et. al., 2016).
Consequently, more profitability will be there. Besides this, the analysis of competition will be
done using Porter's Five forces model to look the overall factors impacting the business. Porter
defined competitive advantages as being “at the heart of firms performance in a competitive
market”. Competitive advantages can be translated for Boots Pharmaceutical Industry in iconic
brand image of association of Walgreen and the selected firm and low cost product as compared
to other competitors.
Internal analysis of Boots Pharmaceutical Industry
Product Differentiation
Boots pharmaceutical industry is a leading player in innovating the product according to
the recent trends. This innovation helps it in keeping the competitive advantage in front of the
major competitors. In addition to this, an IT assisted system is developed by the entity on which
the set of tools will be present. These tactics can be used to collect, process and interface the
information (Christopher, 2016). This innovation in the services are the result of the effective
market research and development strategies used by the organisation. The firm focuses on the
needs and demands of the customer for developing the products. Further, feedback,
questionnaires, etc. are also conducted on a timely basis to examine the expectation of the
consumers to the service. In addition to this, a high level of communication is maintained in the
entity so that the development can be done in an appropriate manner by involving all the
associated departments for taking the decisions. These elements leads the firm to get the desired
product that can meet up with its' goal to achieve competitive advantage.
Brand Values
Brand image is a component that influence the customers to trust on the services.
Consequently, this domination helps the Boots pharmaceutical industry in gaining competitive
advantage from the major competitors. The cited firm is present in the pharmacy business since
168 years and this long span of time (Wildavsky, 2016). This period is proved to be successful in
creating the name of the firm "renowned". Further, the business of the major competitors is not

limited up to the pharmacy only. Thus, this diversion of the rivals is an advantage for the Boots'.
However, it may be recognised that it has dependence only on the UK market. Thus, the entity is
required to plan some effective market entry strategies to undergo international expansion.
Marketing
The method of the marketing is the most effective tool in which any organisation can
gain competitive advantage (Burrell and Morgan, 2017 ). In context to the Boots pharmaceutical
industry the promotion methods are trenchant and draws attention of large number of people.
Besides this, the alliance with the Walgreen have helped in promoting the services in a manner
that bring tremendous growth in the profit. Further, the company provides Boots Unique Selling
Points (UPS) on every purchase. These earned points can be redeemed on their next purchase.
This tactic is observed as a saving method by the customers and the satisfaction from the
products of the company among them increased. Also, the promotion of complete healthcare
services helped them in becoming the first choice of the buyers. In context to UK, the entity
keeps the maximum market share in the pharmaceutical industry.
Human resources management
The pharmacy company provides its services at UK and Ireland. The total employees
working in the entity are 400,000 and to manage such a large figure, an effective HRM is
present. Human Resource team ensures the proper training of the workers so that they can attain
the entire skill set required in the various operations of the business. Human Resources is direct
responsible with the recruitment, training and development of the people working for Boots
Pharmaceutical company (Brewster and Hegewisch, 2017). The biggest tool used by this team is
the performance management. This techniques increases the motivation level of the employees
and thus, attain the desired business objectives.
Supply chain management
The supply chain management on the Boots Pharmaceutical company is recommendable.
The entity is having an effective control over the logistics. Besides managing the innovation in
product, the quantity is also being managed. Recently, the organisation has implemented an IT
system to assist the supply chain system (Chelladurai and Kerwin, 2017). This addition to the
firm, ensures the record of every single detail along with the time-effectiveness. All the

information is processed in this tool which helps in maintaining an appropriate record of all the
suppliers and customers. Also, the errors will be minimised by using this strategy. In this way,
the Boot can achieve a competitive advantage.
External environment of Boots Pharmaceutical Industry
In order to make analysis of external environment of a particular company, there are
different kinds of the models and theories available. In the present case scenario, Porter's Five
Forces model is taken into consideration which helps to make effective external analysis of the
Boots Pharmaceutical company. It includes basic five aspects which are explained with reference
to cited firm as below:
Illustration 1: Porter's five forces model
Threat of new entrants
Very first aspect of the selected model of external environment analysis is threat of new
entrants which reflect level of barriers of potential firms in order to enter in pharmaceutical
industry. According to the survey it has been analysed that threat of new entrants in this industry
is low which helps to the Boots company for gaining high revenue in an appropriate direction

(Porter, 2008). Further, basic reason due to which threat of new entrants in pharmaceutical sector
is low is that, in order to establish new firm high level of capital and financial resources required
up to the larger extent. Along with this, different government policies and rules also create high
barriers and obstacles for the potential entities to enter in selected industry.
Threat of substitute products
Under the pharmaceutical industry threat of substitutes is lower to the moderate situation
because very limited substitutions are there. The Boots company has basically two kinds of
substitutes which are like natural remedies as well as generic medicines. Further, medicines of
the selected pharma company are used at the majority level as compared to the generic and
natural remedies available in the healthcare industry. Basic reason for occurring this level of
substitute products is that, cost and price of generic as well as natural medicines are lower in
comparison to the pharmaceutical medicines. Hence, it can be said on the basis of survey that
threat of substitute goods and services for the Boots company is from the low to moderate
condition (Moreno-Izquierdo and et. al., 2016).
Bargaining power of suppliers
In the industry of pharmaceutical, wide range of suppliers available who are of the two
categories basically like raw materials providers as well as manufacturers. In these both the
sectors major number of companies operate which create low bargaining power in front on the
customers. When number of raw materials and intermediary products providers are high in the
industry then lead to create high level of competition for Boots enterprise. Due to this particular
condition, they have not high level of power in order to bargain with relevant customers. Apart
from this, switching expenses of suppliers under the pharmaceutical industry are higher due to
which power to bargain with Boots organisation is lower in the market. Therefore, they have to
offer products to the customers at lower prices which create direct impact on profitability of
Boots firm.
Bargaining power of customers

Another aspect of the Porter's Five Forces model is bargaining power of the buyers which
shows that, customers have power to bargain with firms up to which extent. When the consumers
have high level of bargaining power in the industry then lead to decline revenue and profit
condition of the companies (Kotabe and Kothari, 2016). As per the survey, this particular aspect
in the pharmaceutical company which is Boots is moderate to high. The reason is that, there are
wide range of the firms providing raw materials to customers where they have option to go for
another company. Apart from this, level of buyers in the pharmaceutical industry is also which
include doctors, drug stores, patient, hospitals and other pharmacists. Therefore, bargaining
power of consumers within Boots pharmaceutical is relatively moderate to the high level.
Rivalry among existing competitors
In the pharmaceutical sector there are wide range of firms operating which lead to create
high level of competition in the market. On the basis of survey of pharmaceutical industry in UK
it has been assessed that, rivalry between existing companies of this sector is high (Chatterjee,
2017). Therefore, competition for the Boots company is also high in the market.
CONCLUSION AND RECOMMENDATIONS
It can be concluded from the above analysis that, Boots company has the better and
effective strategic position in the market which lead to attract customers. Apart from this, human
resources and supply chain both kinds of the management system within this pharmaceutical
firm is effectual and best. As per the external environment analysis, Boots firm is at the moderate
condition because bargaining power of buyers and suppliers is high and low along with high
level of rivalry. However, it has not effective strategies for gaining competitive advantage and on
the basis of this some suggestions are given below:
 The Boots pharmaceutical enterprise should employ product differentiation tactics in the
workplace which lead to attract huge number of customers. The reason is that it not
providing unique and high quality of the medicines to its existing consumers. As it will
start to offer very differentiate medicines they people would like to attract towards it.
 Further, it can be advised to the Boots firm then it needs to enter in new and international
market because as of now it operating within UK market only. Moreover, it has scope to

enter in such kind of market up to the greater extent and able to generate high level of
incomes.
 In addition to this, the Boots pharmaceutical firm requires to consider cost management
strategies as well which will support to reduce prices of the medicines. Further, more
users will attract towards it and able to grab competition level in the industry.

REFERENCES
Books and Journals
Brewster, C. and Hegewisch, A. eds., 2017. Policy and Practice in European Human Resource
Management: The Price Waterhouse Cranfield Survey. Taylor & Francis.
Burrell, G. and Morgan, G., 2017. Sociological paradigms and organisational analysis:
Elements of the sociology of corporate life. Routledge.
Chelladurai, P. and Kerwin, S., 2017. Human resource management in sport and recreation.
Human Kinetics.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Kotabe, M. and Kothari, T., 2016. Emerging market multinational companies’ evolutionary
paths to building a competitive advantage from emerging markets to developed
countries. Journal of World Business. 51(5). pp. 729-743.
Moreno-Izquierdo, L. and et. al., 2016. Pricing Strategies of the European Low-Cost Carriers
Explained Using Porter's Five Forces Model. Tourism Economics. 22(2). pp. 293-310.
Oelze, N., Hoejmose, S. U., Habisch, A. and Millington, A., 2016. Sustainable development in
supply chain management: The role of organizational learning for policy
implementation. Business Strategy and the Environment. 25(4). pp.241-260.
Porter, M. E., 2008. The five competitive forces that shape strategy. Harvard business
review. 86(1). pp. 25-40.
Wildavsky, A., 2016. The self-evaluating organization. In The Art and Craft of Policy
Analysis (pp. 223-251). Palgrave Macmillan, Cham.
Online
Chatterjee, H., 2017. Competitive Strategy in the Pharmaceutical Industry. [online]. Available
through: <http://thought-leadership.top-consultant.com/UK/Competitive-Strategy-in-
the-Pharmaceutical-Industry—978.html> [Accessed on 4th October 2017].
Walgreens Boots Alliance, 2017. [Online]. Available through:
<http://www.walgreensbootsalliance.com/about/vision-purpose-values/> [Accessed on
4th October, 2017]