Strategic Analysis of Boots: Porter's 5 Forces, Value Chain, and IT

This report provides a comprehensive business analysis of Boots, a major health and beauty retailer. It begins with an introduction and overview of the company, its history, and its organizational structure. The report then delves into a Porter's 5 Forces analysis to assess the competitive environment, examining competitive rivalry, the bargaining power of suppliers and customers, the threat of new entrants, and the threat of substitute products. The report further explores Boots' logistic, operations, and outbound logistics, highlighting key activities within the Porter value chain. It also identifies key value-adding activities and explores the use of innovative ideas and information technology to improve business processes. The analysis provides insights into Boots' strategies for gaining competitive advantages in the market. The report concludes with a summary of the key findings.

Business

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
Boots organization.......................................................................................................................3
History of company......................................................................................................................3
Porter's 5 Forces Analysis............................................................................................................4
Logistic, operations and outbound logistics.................................................................................7
Two activities in Porter Value Chain ..........................................................................................8
Key value adding activities of company......................................................................................9
Use of innovative ideas and information technology to improve business process ...................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Business is an institute that is established to provide various products and services to
people living in society for earning profit. Boots is a retailer of health and beauty products and
pharmacy chain operating its business in UK and different countries Ireland, Netherlands and
Thailand. Boost company by analysing its internal and external factors of environment is able to
gain competitive advantages in the market. Porter value chain also helps in gaining competitive
advantages by identifying opportunity available in market. This report covers brief introduction
of company and its various operations that helps in gaining competitive advantages in market.
Boots organization
Boots firms was founded 171 years ago in 1849 in Nottingham, United Kingdom by John
Boots and is one of the largest retailer in UK and Ireland. It has 2500 shops across Ireland and
United Kingdom ranging from local pharmacies to large beauty and health shops (Sculos, 2019).
Boot stores are mainly located on high streets and shopping centre to attract large number off
customers. It has 56000 employees in UK and 1900 in Ireland working effectively for
achievement of organisational goals (Boots. 2019. ). It has well-established brand image as more
than 170 years of trusted healthcare heritage and innovation in pharmaceutical wholesaling and
community pharmacy. Since 27 consecutive years, Boost is included in FORTUNE's 2020 list as
world most admired companies. Firms focus is to help customers feel and look better than they
ever possible and is part of retail pharmacy International Division of Walgreens Boots Alliance.
It has various brand such as No7, soap and glory and natural collection for skincare, sultan for
sun-cream and. Boots opticians and boots retail Ireland are different subsidiaries of Boot and it
operates retail websites loyalty card programme known as Boots advantages cars since 1997.
History of company
Jesses Boot at aged of 10 helped her mother in running a family herbal medicine shop in
Nottingham after his father death by establishing Boots in 1849. It was incorporated as Boot and
Co. Ltd in 1883 then Boots pure Drug company Ltd in 1888 (Powers, 2016). Boots was sold to
American United Drug Company in 1920 by Jesse Boot but it again sold back to British hand in
1933 because of deteriorating economic condition. Its name was changed from Boots Pure drug
company to Boots Company Limited in 1971. Boot planned to expand its business by diversified
into manufacturing and diversified of drugs. One of the important research of company was drug

for congestive heart failure in 1980 named Manoplax. Nurofen brand was sold to Reckitt
Benckiser in 2006 and then it expands its business into Canada by purchasing Tamblyn drugs
chain in 1978. Further it planned to expand its business by bringing bicycle and cars parts as
brand name Halford's in 1991 but it was sold in 2002 (Halliburton, 2018). Boots Opticians Ltd
became second largest retail optics chain in UK by acquisition of Curry and Paxton Ltd and
Clement Clarke Ltd. It further diversified its business into dentistry in 1998 having large
numbers of shops providing this services. It also ventures into Well-being services providing
various services to customers such as homoeopathy and nutrition advice to laser eye surgery. It
was announced that Walgreens would purchase 45% stake in Alliance boots for US$ 6.7 billion.
Thus, it will helps in expansion of both brand in UK and china market and in 2014 Walgreens
Boots Alliance purchase remaining 55% and form new holdings (Boots, 2018). Company is
planning to close 200+ underperforming shops as per 2019.
Products and services: Boots sells wide varieties of products and services to customer for
maximizing profit and market share. It deals in health and beauty products and related electric
products, food and drink, prescription and non-prescription medicines. Firms also provides
photography services but now also provide kiosk printing services due to shift from film to
digital photography. Opticians and healthcare are another products and services in which
company deals.
Porter's 5 Forces Analysis
Competitive environment is defined by the level of competition in the market. It is
associated with external business environment factor that denote the amount of competition
available for the business organization in the same market sector associated with the
organization. To assess the competitiveness in the business environment for the organization
Porter's 5 Forces Model can be used. This model involves business environment factors like
competitive rivalry, the bargaining power of supplier, power of customer, threat of new entrants
and threat of substitute products. Effect of all the forces over business operations of the company
are analysed in this strategical tool in order to frame an effective business strategy.
Competitive Rivalry (High): Competitive rivalry is among the major force involve in the
Porter's 5 Forces Model. This involves the amount of competition organisation face in all the
sectors like healthcare, beauty, photography and pharmaceuticals (Mu and et.al., 2016). All such
sectors involved in the business of Boot Company are very competitive in nature as company

management needs to deals with major rivalries in the market like Loreal. P&G and other
groups. This force is high as all the company's strategies related to the business development and
growth are majorly depends on over other competitors in the same market. Management always
focus over taking competitive advantage with the business strategies. Company management also
overcome the strategic advantages involve in the business strategies of other rivalry's in order to
sustain and improve the growth potential of the company. Customer's will always be keen to
procure the products and services of such companies who can offer better prices and product
qualities. This analysis focuses over making a suitable business development strategies that can
enable the company management of Boot company in taking competitive advantages in the
market by overcoming the impact of strategies framed by other competitors.
The Bargaining Power of Supplier (Medium): Bargaining power of suppliers is also a crucial
aspect involve in Porter 5 Forces Model analysis. Suppliers are also a crucial aspect of the
business operations as they enable the company management to serve its products to target
customer's around the globe. Boot Company is a multinational organisations that also involve
structuring and dealing with suppliers in other part of the country as well (Murphy, 2016).
Effective supply chain management system also enable the company management to reduce its
over all selling price as well. Out of all the impacts of suppliers over business operations and its
cost efficiency this power is medium under Porter 5 Forces for the Boot Company. Big
companies and organisations usually don't face any hurdle in dealing with its suppliers as all the
suppliers are also mainly depends upon big corporate brand to expand the profitability. In normal
business operations plenty of new suppliers also approach to big companies that also provide an
edge to big corporate over suppliers in the market. Based on all the above applications with
suppliers of company products the impact of this force is restricted to medium in nature.
Power of Customer (High): Customers has a major involvement in business development and
growth of the company. Customer's not only influence company's development and growth
potential by it also has a major involvement in the sustainability of the corporate organisation.
Boot company is among the major competitors in the beauty and healthcare sector that also
denote about the brand acceptance of the company in the target customer base. As the customer's
influence every aspect of business development and sustainability this power is relatively higher
as compare to other forces (Sioshansi, 2016). All marketing and operational strategies of the
company framed apparently to company's target customer base. Customer's support the company

in taking competitive advantage sin the market. Management of Boot company initiate several
offers like discounts, festive sales and other associated offers in order to influence the buying
decision of consumer's. Based on major implications of consumer's of company's products this
force is high under Porter 5 Forces model.
Threat of New Entrants (Low): New entrants are denoted by all the new organisations and
companies entered in the healthcare, beauty and Photography sector. Power of new entrants is
relatively lower for big brands and corporate organisations associated with the sectors. Boot
company is a well-established brand as the company is operating its business operations from the
year 1849 and currently company is serving its services in UK, Ireland, Thailand, South Korea
and Bahamas. As the market area is such huge for the company this power impacts medium or
low for the company. New entrants needs to establish a suitable base in the beginning so that
company can sale its products and services. Big brands and companies do not generally affect
new entrants. All the company's strategies are based on the major rivalry organisations associated
with the sector that can influence the buying decision-making of company's target customer's.
Irrespective the implications of this power is lower in market performance of Boot Company but
new entrants can influence the business of the company at regional level in shorter area but in the
major market this force is lower influence aspect on the business of the company.
Threat of Substitute Product (High): Substitute product can be denoted by all such products
that can replace the use of company's products. Big corporate brands always focus over products
development and improvement. Such companies always carry the huge budget to conduct the
research and development activity that enable big brands to introduce new products and services
in the market that can replace the existing products and its associated usage (Terao and et.al.,
2018). This force is higher in Porter 5 Forces Model as new product can effective influence the
buying decision-making of the potential customer's of the company. Substitute products can also
attract to company's loyal customer base. This force is a huge threat for big corporate
organisations like Boot company as the company management is competing with leading brands
of the sector which aggressively involve in research and development activities in order to
upgrade the existing product qualities.
All the forces involves in Porter 5 Forces model play an important role for the company
in taking competitive advantages in the respective market sector.

Logistic, operations and outbound logistics
Logistic: It is process of management of flow of good and services from point of manufacturing
to consumption in order to meet needs of customers and companies. There are two types of
activities that are to be performed by company such as Inbound and outbound logistic for smooth
operations of business (Démare and et.al., 2017). It managed resource that are tangible in nature
such as equipment, material, food and other consumable items. Boot is a large organization with
2500 stores in Ireland and United Kingdom that provides various products related to health and
beauty and prescription and non-prescription medicines to customers.
Primary Activities
Inbound Logistic: Boots operates its business across various nation and had global procurement
team to manage assembling of raw material for manufacturing of goods and services. Strong
relationship with suppliers and well-established brand image of company helps in receiving,
storing and distributing company products and services to large number of customers (Revathi
and Aithal, 2018). Company has around 2500 stores in UK and wide varieties of products yet it
ensures that sourced from where they are received should be ethical. Company also ensure that
products manufactured by supplier those have responsible attitude toward environment and treat
their worker fairly. Boots has stringent policies and process in manufacturing of products to meet
highest standard for satisfying needs of customers. Supplier audit is also conducted to ensure
standard quality of products and services by in house assessment to enhance profitability and
sales of company.
Operations: It refers to management of inner function of firms to run it effectively as possible
and enhance profitability of company. Boot is a large organization with number of operations to
be performed such as arrangement of capital, physical resource for establishment and operations
of business. Company operates its business in United Kingdom and other countries such as
Ireland, Norway and Thailand. It operates in Pharmaceuticals, healthcare, beauty and
photography industry. Therefore, needs to manage human resource for effective production and
performance of individual in order to achieve organisational goals. Boot operations is to manage
cost involved in raising fund, production of finished good and available profit margin from sales
of product and services. It is Thus, various operations are performed by Boot to gain competitive
advantages in the industry.

Outbound Logistic: It is outward movement of finished products and services of company to
final consumers thus it interacts company with customers. It includes distribution channel and
transportation of products and services to customers. Boot has 2500 shops across United
kingdom and Ireland that range from local pharmacies to large beauty and health products shops.
Customers can easily purchase its products at stores of boots are mostly located on high streets
and shopping centre (Talupula, 2019). It has large number of subsidiaries company such as Boots
opticians and Boots Retail Ireland that helps in expansion of sales and profitability of business. It
retails website also helps in attracting large number of customers as it provide ease to them by
offering products at their doorsteps. It has large number of pharmacy chain in United Kingdom
and other countries for quick delivery of products and services to customers.
Two activities in Porter Value Chain
Porter value chain analysis five primary activities of firms that are supported by
secondary activities for achievement of organisational goals. Primary activities such as inbound
logistics, operations, outbound logistic, marketing and sales and service that are supported by
various activities such as procurement, human resource management, infrastructure and
technological development. Thus, Human resource department and technology development
helps in smooth operations of inbound and outbound logistic of company.
Human resource department: It is responsible for recruiting, selecting, training and
development of employees for growth and success of organisation. Human department of Boots
is responsible for hiring right person for right job in order to perform function of organisation
effectively (Granda and Villarreal, 2017). HR manager train and enhance knowledge of
employees to deliver qualitative services and products to customer. It is also select person that
can effective manage stock of raw material for meeting demand of customers. Thus, human
resource department of Boots support various primary activities such as logistic, marketing and
sales and operations of business.
Technology development: Continuous change in technology helps in reducing cost of
transportation and helps in quick delivery of goods and services to customers. Boot by
continuous updating its technology and diversifying in research and manufacturing of drug and
other medicines is able to gain competitive advantages in the market. Boots also use social media
to market its products and services thus attracting large number of customer at reasonable cost. It
has also offered varieties of product on its official websites that provide easy to customer in

buying products and services. It also uses live track solution to ensure delivery of products to
customer within limited time. Thus, technology development helps company in expansion of
business and increasing profitability of company.
Key value adding activities of company
Activities that added value to products and services of company in order to enhance sales
and profitability of company by satisfying needs of customers beyond their expectancy. Boots
value added activities that helps in increasing sales and profitability of company are as follows:
Standardize quality of products: Boots focus is to provide qualitative products and services to
its customers at reasonable rates. Supplier of company are fully aware of standardize raw
material to provide qualitative products and services to customers. Strict policies and rules of
company are to be abided by supplier while manufacturing products thus it helps in maintaining
standard quality and satisfaction of employees.
After sales services: Company in order to expand its business and market share provides 24-7
customers support to attract large number of existing and new customers (Damanpour, 2017).
Highly skilled and knowledgable employees also helps in providing quality services to people
and achievement of organisational goals. Company by building strong relationship with customer
through its website able to get feedback and improve itself where it lacks. Thus, it helps in
adding value or sales of Boots products and services in the market.
Use of innovative ideas and information technology to improve business process
From the above analysis it can be stated that innovative ideas and information technology
helps in improvement of business process and enhancing competitive positioning of company in
the industry. Boot by offering its products and services through online website is able to gain
competitive advantages in the market. Customers can easily make purchase of products and
services by staying at their home (Chuang, Lin and Chang, 2016). Firm in order to expand its
business has use social media to market its product and services to large customers at reasonable
rates. Social media is used by large number of people thus it helps company in gaining
competitive advantages. Continuous investment in research and development department also
helps company in bring new and innovative products to satisfy needs of customers. It has
diversified in research and manufacture of drug for development of Ibuprofen Painkillere during
1960. Boot has also introduced Manoplax by continuous research for drug for congestive heart
failure. Technology development has contribute company growth and success as it develop

business such as children world business and Halfords bicycle and car parts business. It also
helps in enhancing brand image of company as innovative products and services attract large
number of customers. Information technological also helps in tracking of delivery of products
within appropriate limited time to customer. It also helps in storing data related to inventory
present in the warehouse and requirement of raw material as per demand of customer. Thus
reducing cost of maintaining extra inventory and wastage of material. Innovative ideas helps
company in gaining competitive advantages in the market by differentiating it from other
competitors. Information technological helps in availability of raw material within reasonable
time to meet needs of customers effectively (Secundo and et.al.,2019). Thus, information
technological and innovative ideas enhances competitive position and business process.
Company by using information technology can analysis its sales and profitability during various
years and improve its performance. Online presence of boots also helps in getting quick feedback
and building strong relationship with customers.
CONCLUSION
From the above report it can be concluded that business by using information technology
and innovative idea is able to gain competitive advantages in the market. There are various
activities that are needed to be performed by company to achieve organisational goals. It can also
be explained that Boots by analysing internal and external of environment is able to gain
competitive advantages in the industry. It also concluded from above report that porter value
chain model helps in effective delivery of good and services to customers and achievement of
organisational goals.

REFERENCES
Books and Journals
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Chuang, S. H., Lin, S. and Chang, T. C., 2016, July. Exploring the performance of service
innovation: Infrastructure capability and innovation orientation complementarity.
In 2016 10th International Conference on Innovative Mobile and Internet Services in
Ubiquitous Computing (IMIS).(pp. 527-530). IEEE.
Damanpour, F., 2017. Organizational innovation. In Oxford Research Encyclopedia of Business
and Management.
Démare, T. and et.al., 2017. Modeling logistic systems with an agent-based model and dynamic
graphs. Journal of Transport Geography. 62. pp.51-65.
Granda, E. and Villarreal, B., 2017, October. Reducing outbound transportation costs: A case
study. In Proceedings of the International Conference on Industrial Engineering and
Operations Management (pp. 142-150). IEOM Society.
Halliburton, R., 2018. Seven league boots. Pickle Partners Publishing.
Mu, L. and et.al., 2016, December. Distributed real-time pricing scheme for local power supplier
in smart community. In 2016 IEEE 22nd International Conference on Parallel and
Distributed Systems (ICPADS)(pp. 40-47). IEEE.
Murphy, C., 2016. Competitive Intelligence: Gathering, Analysing and Putting it to Work.
Routledge.
Powers, M., 2016. The new boots on the ground: NGOs in the changing landscape of
international news. Journalism. 17(4). pp.401-416.
Revathi, R. and Aithal, P. S., 2018. A Case Study on Aegis Logistics Limited.
Sculos, B. W., 2019. Sorry to Bother You with Twelve Theses on Boots Riley’s" Sorry to Bother
You": Lessons for the Left. Class, Race and Corporate Power, 7(1), p.4.
Secundo, G. and et.al.,2019. Knowledge transfer in open innovation. Business Process
Management Journal.
Sioshansi, F.P. ed., 2016. Future of utilities-utilities of the future: how technological innovations
in distributed energy resources will reshape the electric power sector. Academic Press.
Talupula, A., 2019. Demand Forecasting Of Outbound Logistics Using Machine learning.
Terao, N. and et.al., 2018. Digitally-Controlled Compensation Current Injection to ATE Power
Supply for Emulation of Customer Environment. Journal of Electronic Testing.34(2).
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Online
Boots. 2019. [Online]. Available through : <https://en.wikipedia.org/wiki/Boots_(company)>.
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