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Investigating Business-Boots Plc and Vodafone Group - Essay Example

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The Boots Company is an international pharmaceutical manufacturer and retailer of health and personal care products. The company operates under three divisions: Boots Retail, Boots Retail International and Boots Healthcare International. Boots Retail includes the company’s UK and Ireland operations…
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Investigating Business-Boots Plc and Vodafone Group
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Investigating Business – Boots Plc and Vodafone group Business The Boots Company is an international pharmaceutical manufacturer and retailer of health and personal care products. The company operates under three divisions: Boots Retail, Boots Retail International and Boots Healthcare International. Boots Retail includes the company’s UK and Ireland operations. The company has three services in this division: Boots the Chemist, wellbeing services, and digital wellbeing. The division also includes Supply and Support Services which includes the company’s supply chain, logistics, procurement, manufacturing, properties, engineering and facilities management activities. Boots Retail International undertakes the company’s operations in South East Asia and Europe. Similarly, Boots Healthcare International focuses on three core therapy categories – analgesics, cough & cold and skincare. Aims & Objectives : -> To make Boots a more modern, competitive and efficient retail business. -> To increase the net profit with a huge margin. -> Deliver customer satisfaction. -> Deliver value to the shareholders. Strategies : -> The best strategy to increase the profits is to focus on healthcare market as it has a huge potential for growth. -> In order to increase the level of customer satisfaction simultaneously with an eye on cost-cutting, it is advisable to enhance the services provided and also enhancing the IT services being provided. -> Increase in the promotional activities is highly required looking at the current position of the firm in the market. -> Increase in overseas business. SWOT Analysis: The Boots Group specializes in the manufacture and retail of health and personal care products. It has an international presence, operating under three divisions: Boots Retail, Boots Retail International and Boots Healthcare International. The Boots Group operates Boots the Chemists (BTC), a drugstore chain with about 1,400 shops in UK and Ireland. The companys other core business Boots Healthcare International is a leading UK maker of over-the-counter (OTC) drugs and it sells OTC drugs in some 130 countries. Boots Contract Manufacturing is one of Europes largest suppliers of private- label toiletries and cosmetics. -> Strengths : Boots holds a position as the dominant retail provider of UK healthcare products and market leading private label brands in the sector. Boots the Chemist is the UKs largest health and beauty retailer. Operating out of over1,400 outlets, it is the countrys leading dispensing chemist and has dominant market shares in OTC medicines, cosmetics, fragrances and toiletries. Approximately 40% of the company’s sales are through its own label. Other businesses include a small concession-based overseas retail operation and Boots Healthcare International, an OTC wholesaling business. The Boots own brands, ranging from No 7 to Botanics and accounting for around 40% of sales, remain perhaps the most potent weapon in the group’s armory. A further modification of the positioning of the Boots private label could improve the representation at entry price points strengthening the groups private label hold on the market. -> Weakness : Boots is still extremely diverse. The Boots Group, considering recent attempts realign towards its core functions still has a number of diverse operations that are loosing money for the group. The group’s Wellbeing services continue to perform poorly and Boots have seemingly experienced problems exiting this sector, be it through poor choice or a high exit barrier, as a large amount of money is currently held in this sector. Also the group is still yet to completely rationalize its low performance operations in Europe and Asia Pacific with many operations not utilizing retail space effectively. Sales currently cannot be increased without capital expenditure and with products outside the groups traditional core selling poorly any gains are removed because of inefficiencies in inventories and retail space. -> Opportunities : Enhance differential pricing - BTC should enhance its pricing differential according to the local competitive landscape. This would probably push prices up in certain neighborhood stores, likely without significant market share loss, and allow a more competitive price position in the key locations where BTC is trading head-to-head with the supermarkets. Space utilization - Although BTC has selectively re-entered certain leisure product categories, it has yet to utilize fully the space vacated when it exited non- health and beauty products. This represents a big lost sales opportunity. It is likely that Wellbeing Services were partly contrived with a view to filling this vacant space, with damaging consequences, and therefore a substitute for this line is required amongst others. - > Threats : Consolidation in the healthcare industry. The healthcare industry is extremely competitive and as competition becomes more intense a trend of consolidation is likely to spread throughout the industry. Customer confidence/acceptance. Much of The Boots Group’s current strategies are dependent upon continued customer acceptance of the group’s core product lines. The company’s brand identity has been affected because of the introduction of numerous product lines that have worked to dilute the Boot’s brand. Such recent actions have increased the threat as to whether consumers will continue to buy the company’s products into the future. Marketing Analysis: Here we will consider the 4P’s of marketing of this firm. -> Product: There are a large number of products in which Boots Plc deals with. The major consideration should have been to fill up the product line wherever a gap is being formed. -> Price: The general competition of The Boots Group has a price advantage in its field despite inferior buying power because it sells the products through lower cost space with less dedicated service cost. -> Place : In recent years Boots Plc have seen a tremendous growth in the international market. Many more promotional activities should be considered in order to expand the overseas business. -> Promotion: The ‘3 for 2’ strategy has been the bedrock of the BTC promotional effort for many years, coupled more recently with the Advantage Card. This allows for a planned schedule that can be pre-funded by suppliers and allows BTC to guide points redemption to maximize sales of higher-margin product. Products & Services Analysis : -> For fiscal year ended March 2005, The Boots Group Plc. Generated total revenue of £5,470.7 million. -> Boots the chemist - This division includes healthcare, beauty and toiletries and other. Total revenue generated amounted to £ 4.6 million. -> Boots Health care International made inter-segmental sales of £28.5million. -> Boots retail international made inter-segmental sales of £1.9million. Review : The year covered by this report has been a period of intense change for Boots.  In spite of some challenging competition and a downturn in the consumer economy, much of the work identified as necessary to make the business more modern, competitive and efficient has been successfully implemented. They have the right strategy in place under exactly the right management team – a team which is doing a great job in a very difficult market.It can be concluded that Boots has witnessed enormous strides forward in the past few years. Vodafone group : Business Description: Vodafone Group Plc is the world largest telecommunications company, with a significant presence in Continental Europe, the United Kingdom, the United States and the Far East through the Company’s subsidiary undertakings and investments. It provides an extensive range of mobile telecommunications services, including voice and data communications.The Groups mobile subsidiaries operate under the brand name Vodafone. In the United States the Groups associated undertaking operates as Verizon Wireless. During the last two financial years, the Group has also entered into arrangements with network operators in countries where the Group does not hold an equity stake. Under the terms of these Partner Network Agreements, the Group and its partner networks co-operate in the development and marketing of global services under dual brand logos. Aims & Objectives : -> Vodafone’s vision is to be the world’s communication leader – enriching customer’s life , helping individuals, businesses and communities be more connected in a mobile world. -> Enhance the customer services being provided. -> Enhance the relationships with the stakeholders and deliver value. -> Increase the net profit – expansion of international business. Strategies : -> Value creation : Vodafone aims at providing the best possible return to the share holders The criteria for investment decisions, acquisitions and business relationships should be primarily economic but they should also include social and environmental considerations. -> Equality of opportunity and diversity through employment policies would help in retaining the best talent. ->It is highly essential to pursue mutually beneficial relationships with business partners and suppliers. In this way the promotion of the application of Business Principles could be done by business partners and suppliers. -> Optimum and careful utilization of finite resources. SWOT Analysis : Strengths : Vodafone aims to deliver increasing value to its customers by creating innovative services that meet these different needs, supported by world class customer service. This service fundamentally changes mobile communications for our customers and gives Vodafone a platform to deliver a market leading, differentiated proposition. Customer management with rising customer expectations and increasing choice, effective customer management is increasingly important. Billit enables  billing for multiple services within a single system and provides functions for e-Services, content commerce, voice and IP services. Billit is a highly flexible billing system that enables the billing of services in any network. Billit can work as an independent system or it can be integrated into an existing billing infrastructure, for example as an add-on for mobile IP service billing in an existing GSM billing system. Market share stabilization and Efficient and research and development activities. The Companys ordinary shares are listed on the London Stock Exchange and the Companys American Depositary Shares (ADSs) are listed on the New York Stock Exchange Weakness : Tough time for core operations. High levels of competition. Opportunities : Vodafone and Google team to create innovative mobile search experience for mobile phone users. Vodafone will integrate Googles search capability into its consumer service, Vodafone live!, providing customers with the most relevant information, wherever they are and whatever time of day it is. Orange and Vodafone to link mobile Instant Messaging communities. Working under the open standard interoperability principles, established by the GSM Association, Orange and Vodafone customers will be able to send and receive Instant Messages to friends and family seamlessly across each others mobile networks. Vodafone and Microsoft collaborate to deliver comprehensive email solution for business. Threats : Intensifying competition and pricing pressures in several of its key markets. Cable competition to broadband - Broadband is considered as one Vodafone’s key current and strategies. NTL and Telewest control around 50% of the broadband market and although they have recently scaled back broadband operations they have been much quicker than Vodafone in rolling out their broadband services. NTL and Telewest are both working to upgrade their networks so that they can provide broadband services to consumer in all the areas covered by cable networks. Regulation of competition - The UK telecommunications market is fully open to entry and is highly competitive. As a result, the UK Government and Oftel have indicated their expectation that it will be appropriate to move away from sector- specific regulation to greater reliance on the Competition Act as individual markets become sufficiently competitive. By virtue of provisions in the Competition Act 1998, UK competition law is in line with European Community law in prohibiting anti-competitive agreements, concerted practices and the abuse of a dominant market position. Marketing analysis : Here we will be considering the 4p’s involved in the marketing strategies of the firm. -> Products: Vodafone is engaged in a large number of products and services. Its services includes wireless communication services and many such related. -> Price: The general competition of the Vodafone Plc group has a price advantage in its field over its competitors. -> Place: A huge overseas expansion and diversification of business in business markets is highly advisable. -> Promotion : An effective promotional strategy is highly essential in order to expand the business and reach the goals. Products & Services Analysis : -> Vodafone’s net income fell 50.2% to $1.19 billion, while sales grew a modest 3.9% to $17.13 billion. -> Wireless revenue jumped 21% to $6.16 billion, and the unit acquired another 1.4 million customers, up 66.5% from last years quarter. -> Vodafone and other regional-phone companies are trying to slow defections by trying to persuade local-phone customers to buy packages that typically include wireless and long-distance calls, as well as high-speed Internet access. -> Verizon Wireless is still the number-one ranked US mobile operator, until the $41 billion merger of Cingular and AT&T Wireless Service completes later this year. Review : For the fiscal year ended March 2005, Vodafone Group reported revenues of $61,849 million, an increase of 28.8% against the previous year. Customers have voted with their phones to make Vodafone Group the worlds #2 wireless phone services provider (by subscribers) -- with more than 133 million (trailing only China Mobile (Hong Kong)). Vodafone Group has grown rapidly through acquisitions and has advanced toward its goal of creating a pan-European wireless network. The company, formerly known as Vodafone Air Touch, owns stakes in wireless carriers around the globe. Vodafone companies are leading mobile phone operators in the US (45%-owned Verizon Wireless), Germany (D2) and the UK (Vodafone). The company is uniting its far-flung affiliates under the Vodafone brand. REFERENCES : - -> Hague Paul (2002) – Market Research – A Guide to Planning, Methodology and Research. -> www.vodafone.com. -> www.boots.com   Read More
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