Boots: Analysis of Competitive Environment and Value Chain Report

This report analyzes Boots, a major pharmacy and health and beauty retailer, focusing on its information technology management, competitive environment, and value chain. The report begins with an introduction to Boots, its products, and services. It then analyzes the competitive enviro...Read More

Managing information
and technology

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Introduction of company.........................................................................................................................3
Background of company..........................................................................................................................3
Products and services of company...........................................................................................................4
Analyze the competitive environment of company..................................................................................4
Analysis of inbound logistics, operations and outbound logistics............................................................7
Analysis of two supporting activities in Porter's Value Chain of the business.........................................8
Identification of key value adding activities with justification................................................................8
CONCLUSION...........................................................................................................................................9
REFRENCES............................................................................................................................................11

INTRODUCTION
In today’s time information technology is considered as essential part of business because
it is related to cost of doing business as well as opportunities to conduct more business at local,
national and international level (Galliers and Leidner, 2014). Through it firm able to gain
numbers of benefits such as increase value, quality, productivity, processing and so on.
Organization selected for this assignment is Boots which is operating in Pharmaceuticals, beauty,
healthcare and photography industry. It is founded by John Boots in year 1849 and their head
office is located in United Kingdom. This firm is nested in different locations such as UK,
Thailand, Republic of Ireland, South Korea and Bahamas. Topics covered in this report are brief
introduction of company, analysis of completive environment analysis and value chain as well as
it will also include key value adding activities.
MAIN BODY
Introduction of company
Boots United Kingdom Company is formerly as Boots the chemists and it is trading as
Boots. Respective firm is pharmacy and health and beauty retail chain at United Kingdom and
other nations. Respective company is one of the largest retailer in UK as well as Ireland, in both
term i.e. revenue and numbers of stores or shops. They have nearby 2500 stores across the both
location, which is from local pharmacies to big health and beauty store (Freund and Jones, 2014).
Respective company shops are generally nested at high streets as well as at shopping centers.
They generally sell numbers of health as well as beauty products and they also provide hearing
as well as optician care services in their store. This firm operating a retail website from 1997
which run a loyalty card programmes known as The Boots Advantage Card through which they
able to attract as well as retain customers for long time. Its subsidiaries companies are Boots
Opticians and Boots retail Ireland. There are approx 56000 employees are working at UK
location and 1900 are at Ireland.
Background of company
Boots Company is launched by John Boot in year 1849 after death of his father in 1860,
Jesse Boot helped his mother from the age of 10 in running family’s herbal and natural medicine

shop at Nottingham that was integrated as Boots and Co. Ltd in 1883 and it become Boots Pure
Drug Company Ltd. in 1888. Then at 1920 Jesse Boot sold respective company to the American
United Drug Company. After than in 1933 Boots is sold back to the British because of
implementation of deteriorating economic circumstances at North America. In 1971 the Boot
Pure Drug Company name changed to The Boots Company Limited, slowly business of
company is expanding. In between 1898 and 1966 several branches of Boots are incorporated
lending library department named as Boots Book Lover’s Library (Durugbo, 2014). In year 1987
Boots Opticians Ltd was established with the acquisition of Curry and Paxton Ltd. as well as
Clement Clarke Ltd. and Boots become second largest optical retail chain at United Kingdom.
Moreover in 2009, Boots optical acquired one the oldest optician chain i.e. Dollond & Aitchison.
Products and services of company
Boots is operating its business at Pharmaceuticals, beauty, photography and healthcare
industry operating at United Kingdom, Republic of Ireland, South Korea, Bahamas and Thailand.
They are offering their wide range of products and services through various brands such as No 7,
Natural Collection and Soap and Glory – Skincare Soltan – Sun Cream. They offer wide range of
products and services such as prescription medicine sold through pharmacies, non prescription
medicines, huge range of health and beauty products that include electrical products like shaver,
hairdryers, electronic toothbrush and so on (Busse, Meinlschmidt and Foerstl, 2017). Along with
this respective company also offer lunch time food and drinks that are available as a section of a
Meal Deal promotion as well as they also provide other products like optical, cloths for babies
and many more. Boots have another section of service i.e. photography which include digital as
well as kiosk printing services.
Analyze the competitive environment of company
Competitive environment is considered as dynamic external system on the basis of which
business operates, competes as well as functions. According to this if a particular industry has
more numbers of sellers then company face huge competition at marketplace whereas if there is
less numbers of sellers of specific products or services then the competition is low (Shahar, Satar
and Bakar, 2019). For example there are numbers of companies operating in fast food industry
which show high competition at the respective industry. On the other hand there are technical
based industry have low competitive environment because there are limited company that are

operating in respective industry. There are mainly four types of competitive environment i.e.
perfect competition, oligopoly competition, imperfect competition and monopoly competition. In
respect of Boots Company they are conducting analysis of competitive environment by using
Porter’s five models because through that they can understand about market as well as it will also
help them in developing decision successfully and effectively. Explanation of porter’s five force
model in respect of Boots company is given below:-
Porter’s five force model
Respective model is developed by M. Porter in year 1979 in order to understand about
different competitive forces which impact on the companies operating at particular industry.
Generally these factors determine a sector structure as well as level of competition in specific
sector. If there is strong competitive force at the industry then it is less profitable because they
have low entry and exist barriers as well as this situation also define that specific industry have
few buyer, more suppliers and there is also availability of huge substitute products such as
clothing retail industry (Garba, Armarego and 2015). There are five key competitive forces
which impact on the business operation s as well as functions at the particular industry,
evaluation of all five forces in respect of Boots are given below:-
 Threat of entry: According to this factor, if in a particular industry any new firm can
easily enter and exit then threat will be high, this is generally take place when firm is
highly profitable as well as there is minimum or no barriers on entry and exit (Ellwart and
et. al., 2015). In respect of Boots, they face moderate threat of entry and exit because they
are operating in both pharmaceutical as well as beauty industry. From which
pharmaceutical have huge entry and exit barrier according to which Boots will face low
threat whereas in respect of beauty industry there are few barriers which leads to high
threat for company.
 Bargaining power of suppliers: Through this factor or force a company able to
determine power as well as control of their suppliers which is also known as market of
inputs. If the power of supplier will be high then they can demand for huge money for
supplying low quality products and services (Yoder-Wise, 2014). On the other hand if the
power of supplier is low then they need to offer high quality products at the low prices. In
respect of Boots, there are very few suppliers who offer raw material, resource and other

essential according to company products and services. This show power of supplier is
less for respective organization.
 Bargaining power of buyers: It refers to that force which show numbers of buyer in a
particular industry, if numbers of buyer is high then the power is low whereas if there
will be less customers then power will be high. In respect of Boots Company there are
huge numbers of buyer in respective industry but they have wide range of options from
which they can purchase similar products (BOOTS, 2020). So the bargaining power of
buyer of respective organization is high as through competitive companies’ products and
services customer able to fulfill their need, requirement and demand.
 Threat of Substitutes: Through this a company management can analyze how easy their
customers can switch from another competitive company products and services. This is
generally take place when competitive organization similar products as well as services at
the low prices (Singh and Crisafulli, 2016). In respect of Boots Company they are
operating in both pharmaceutical as well as beauty products industry so in pharmaceutical
industry threat of substitutes will moderate because in context of medicine people prefer
only trusted and famous brand. On the other hand in respect of beauty and skincare
industry they face high threat because there are numbers of company who offer wide as
well as similar range of beauty products.
 Industry rivalry: This force of respective model helps an organization in analyzing
competition at the marketplace. Through this firm can analyze numbers of competitions
at the potential marketplace as well as it also help in determining what they can do for
gaining advantage (Evans and Price, 2017). In there are huge companies operating at a
particular industry then respective force is high. In context of Boots, the industry rivalry
is moderate which show rivalry is not too high and not too low. This is so because there
are numbers of companies operating in pharmaceutical industry but not all have power to
attract customers. Due to this respective company enjoy moderate rivalry at the potential
marketplace.
Through porter’s five force analysis Boots company management able to understand its
competitive market according to which they can develop effective as well as impressive
strategies. This will also help in determine risk and opportunities by understanding that

respective company can gain competitive advantage as well as it will also help them in boosting
or growing business successfully.
Analysis of inbound logistics, operations and outbound logistics
Inbound logistics: It can be defined as storage, delivery and transportation of goods that
are bought by an organisation to carry out operational activities. While performing operations it
is very important for the managers to make sure that they pay attention towards all of them. All
the raw materials which are purchased by an organisation such as Boots are considered as the
part of elements of inbound activities (Koc and Bozdag, 2017). In order to perform operations
properly, the managers buy goods from outside which are carried within the warehouses so that
different types of boots could be manufactured for the clients according to their choices.
Different activities which are performed under this task are material handling, inventory control,
returning to the supplier, warehousing and vehicle scheduling.
Operations: When all the inbound activities are performed by an organisation then
operations are performed with the help of them so that demand of market could be met properly.
For example, managers of Boots order material in inbound procedures which is kept in
warehouses. In order to manufacture all the footwear all of them are used. It is very important for
all the business entities to make sure that operations are carried out in systematic manner so that
long term goals could be accomplished.
Outbound logistics: When goods are manufactured by an organisation and sent out of
the warehouses for the purpose of sales then they are considered as the part of outbound
activities. It generally includes storing, distribution and transportation of goods to the destination
where they will be sold (Noe and et. al., 2015). All these activities are performed properly by
Boots so that it can attain growth in the market. While sending finished goods outside of the
warehouses the management makes sure that all the boots are having good quality as it helps
them to attract large number of customers and retain existing ones. It starts with the order of a
client and ends with the delivery of it to the user (Sivula and Kantola, 2014).

Analysis of two supporting activities in Porter's Value Chain of the business
There are various supporting activities of Porter's Value chain and all of them are
required to be focused by all the organisations to carry out operations appropriately. Two of them
are described below in context of Boots:
Human resource management: It is very important for all the organisations to make
sure that all the staff members are managed properly so that long term business goals such as
higher profits and profitability could be accomplish (Thompson, Strickland and Gamble, 2015).
For the purpose of attainment of them proper human resource management is required. In order
to carry out operational activities properly it is essential for companies such as Boots to place
right person at right designation so that employees can contribute in development of business.
While planning to grow a business it is very important for all the organisations to make sure that
all the human resources are managed systematically as it will result in higher productivity. If the
top level executives of an organisation are not able to control and plan the actions of all the
employees so that possibility o errors could be reduced. In Boots managers pay attention towards
HRM as it helps the company to meet its targeted goals such as high profits. Ignorance of this
support activity may result in lower engagement of workforce in their jobs.
Technology: It is another support activity of Porter's value chain which should also be
focused by all the organisations as it may result in strengthen market share. It guides all the
entities to make sure that they are using latest technology to carry out operations as it will be
beneficial for them to meet expectations of clients. It is also focused by managers and other
executives of Boots as it helps them to use latest technology to make boots. It is very beneficial
for the whole entity as it results in higher number of customers and increased revenues which are
advantageous for market image of an organisation (Flanagan, Lepisto and Ofstein, 2018). This
support activity requires attractive skills of managers so that they can conduct research and
analyze the latest technique which can help them to develop the business.
Identification of key value adding activities with justification
There are various activities which are beneficial for organisations. It is very important for
managers to be aware of all of them so that value could be added within the business. There are
various support and primary activities which are focused by Boots. These are firm infrastructure,

human resource management, procurement, technology, in and out bound, market and sales,
service and operations. Some of them which are adding value to the organisation are as follows:
Marketing and sales: it is very important for all the business entities to make sure that
marketing related activities are performed by them on continuously as it can help to aware clients
about the products that will be sold to them. In Boots marketers and managers make sure that
effective strategies for marketing and sales related activities are performed as it helps them to
attract large number of clients. It is a value adding value for the business because it establishes a
positive image of company in the market.
Service: In order to be the first choice of customers it is very important for all the
organisations to provide them appropriate services that fulfill their needs. If a company is not
able to deliver best services to the customers then it will lead it towards failure. The managers of
Boots make sure that they provide satisfactory facilities to all the clients so that value could be
added to the business (Hosseinzadeh, Hajjarian and Porbar, 2016). This primary activity is very
beneficial for the organisation as it results in highly satisfied customers and higher profits.
CONCLUSION
By above discussed point it can be summaries that in today’s time every company is
adopting information technology because through it they able to grab business opportunities
available at the marketplace. Through it company also able to conduct their work in effective and
successful manner which help them in attracting more and more potential customers towards
their products and services. In order to adopting information technologies in appropriate as well
as successful way company need to perform several activities such as analyze company
background so that they can develop proper strategies. Along with this they also need to evaluate
their products and services as that will help in building strategies according to requirement of
company as well as customers. Moreover firm also need to conduct analysis through different
model such as Porter’s five forces analysis and Porter’s value chain model because through that
they can analyze situation and market properly. Through porter’s five forces model an
organization management can analyze competitive marketplace effectively which help them in
developing proper strategies as well as action plan. Moreover by that they also able to determine
risk and identify opportunities which leads to increase in business operations as well as functions

at local, national and international level. By conducting these analysis it can be determined that
through information technology a company can boost their performance as well as it will also
help them in managing their work successfully. In respect of this report which is based on Boots
company which is operating in pharmaceutical, beauty and skincare industry they need to adopt
advance information technology because through that they able to understand need and demand
of customer which helps them in decision making process. Respective company can adopt
innovation in their manufacturing process as that will help in various ways such as minimize
costing, wastage, quality get increase, work load of employees get deceased, increase in
employees performance and so on. Directly this will leads in enhancing company’s products as
well as services quality through which firm can attract more and more customer that will help
them in gaining competitive advancement at the potential marketplace. So now a day it is
essential for each and every companies to adopt advance information technology as that will help
them in gaining competitive advantage by grabbing opportunities at the potential marketplace.

REFRENCES
Books and Journals
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Data Systems.
Ellwart, T. and et. al., 2015. Managing information overload in virtual teams: Effects of a
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Evans, N. and Price, J., 2017. Managing information in law firms: changes and
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breweries: a value chain analysis. Journal of Small Business and Enterprise
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Freund, J. and Jones, J., 2014. Measuring and managing information risk: a FAIR approach.
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strategies in managing information systems. Routledge.
Garba, A. B., Armarego, J. and Murray, D., 2015. A policy-based framework for managing
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Noe, R. A. and et. al., 2015. Human resource management. Gaining a Competitive.
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Singh, J. and Crisafulli, B., 2016. Managing online service recovery: procedures, justice and
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Online
BOOTS. 2020. Available through: < https://prezi.com/xbhlldvifufe/boots/>.