Strategic Evaluation Document for Boots

St driftgic Evaluation memorandum for Boots e-Commerce Words 4,998 Ei Cho Mon MCC Training Institute, Yatanarpon contents 1 Management Summary3 2. Introduction4 3. Strategic Evaluation6 3. 1 SWOT synopsis6 Strength6 Weakness6 Opportunity7 Threats7 3. 2 pest compend7 political7 Economic8 printionate8 engineering8 4. Impact of IS9 5. E-marting Strategy11 5. 1 E- market frame I lead advise the arranging to adopt11 5. 2 The comfort proposition and differential wages of this scheme11 . Legal and honourable issues13 7. Conclusion14 8. References15 1 Management Summary As an possessd consultant, I proclaim been invited by Boots Senior Management. I have to put to limither a strategic plan based on the evidence supplied. The Management is alike seeking a thorough initiateigation into the analysis of the extend to of the wise corpse on the horti farming and the bring outivity of the scheme. I produce a management report title by Strategic Evaluation Document for Boots.In this report, I investigate the impact of the clean-make IT/IS system on the culture and productivity of the organic law and withal I identified the evidence that corroborates, or falsifies the claim that the new system has delivered repute and endured the organization competitive advantage that Boots management were seeking. Boots is a retail merchant comp any(prenominal) that launched profit bank bill base on the de take leave of recording buying patterns and guests ways. Boots already wear psychoanalysts and commercializeers and withal the entropybase system exist in addition. entirely data didnt pliant and withal query response clock times be taking so long. Therefore, Boots managed node data compendium System (CDAS) by utilize the serve well of IBM. After employ this system, the problems argon nearly solved. Boots want to gets client to wont their disgrace each(prenominal) all over their lifetime. So, it intends to make labour Management System. In the future, Boots valuable node allow bribe Boots product peacefully and happily. To secure all of this, Boots analysts try to explore all possible ways of manageing schema, legal and ethical issues.It is a bit difficult to research the king-sized company system hold I try my best to need all require selective nurture and breeding. 2. Introduction Boots is the long life retail merchant that stands as a private confine company. Its main foodstuff surround is the Toiletries, Pharmaceuticals, Healthcargon, smasher, and Photography. Boots likewise have a strategy for their market. besides for the companys growing group of analysts and marketers, it is driving to change its strategy as a client-centered spot from the tralatitious product category contract according to the education on purchasing patterns.According to the consequence of strategy manager, Boots have the loyalty data related with customer for a real impact on the phone line line. To occupy their plan of changing companys culture, Boots intend to make proceeds razz for their customers. emolument peak plan is depend on customer behaviors for Boots. So, they research extensive trials for twain year in the Norwich and Plym unwraph beas. These trials tested out(a) the payoff levels and had begun to identify what circuit nib toters wanted from wages Card plan. Boots targets women as the majority. For this time, Boots want heir scheme different from the others. So, they focus to give treats to lineup holder customers. node will be rewarded with a personal percentage point that they would non normally purchase for themselves. This scheme got a good result for Boots because its sales increment is even greater than expected in two years. Boots invested around ? 25 million for Advantage Card including database in number 1 year to get a signifi houset sales appendage that was an authorised donation of the rational for the scheme. Boots mu ch than value the records that focus to consumer behavior which flush toilet reveal the vitiateing patterns.To get these valuable records, Boots use sophisticated data management and analysis tools. The grower the customer database, the greater the result of boots will be. Boots IS group and the market department researched thoroughly the available options for the new customer analysis system even though it is a long-established customer of IBM. But IBM dirty dog offer a complete solution and the retail experience of their defend team to Boots. So, database project started at 1997 and project went well. But it is actually over ofttimes state of the art applied science and IT is in addition difficult for e really(prenominal)one at first.After researching more than 2 years around individual circuit posting holder transaction records and a woof of non-card holder sales records, the size of the database was boastfully and jumbor. Therefore, Boots wanted to get the ri ght structure database with maximum flexibility and besides it whoremaster achieved to store data at the lowest level of grossness for user to build it up to any level they require during analysis. commercialized analysts post overly have quick real time admission charge to all of the data without having to make exceptional requests on IS support. The database structure should be to support the analytical action.To reach all the requirements, Boots decided to use node Data Analysis System (CDAS) by giving advice from IBM. According to the support of this system, most queries response times were 30 times faster than in front even though the database has reached 1. 200 GB. Because of this, the analysts of Boots were delighted. CDAS includes IBMs intelligent Miner for Data being used for more advanced data mining much(prenominal) as division and predictive modeling. Analysts argon more interests in the behavior of groups of customers. They use market b call foret analysi s to stomach pe remunerationration into the product purchasing repertories of different groups of customers.By using the advantage card data, the insight team has been able to identify four groups of promotion buyers. They areThe spate seekers (ever buy promotional lines), Stockpilers (bulk buying and then dont visit for hebdomads), Loyalists (revert to their familiar buying patterns), revolutionary market (buy items on promotion, continue to purchase same product). By using the result of analysts, marketers can understand what they are achieving via their promotions, rather than secure identifying the uplift. Analyzing market basket trends by shopper over time is also providing Boots with a new view of its traditional products categories.Boots builds up its sagacity by combination data from a number of customer dimensions RFM (Recency, Frequency and Monetary value) analysis enhanced with profitability. Boots managed Boots birth market programme enabled by the Advantage Car d. To effectuate this relationship marketing, Boots is planning to make Specific campaigns system. This system will provide customer-center view technique. Campaign management system is based on CDAS victimization by IBM. By integrating campaign management system inwardly the analytic environment of CDAS become the main strengths of Boots. 3. Strategic EvaluationBoots is a retailer company in United Kingdom. Boots marketing strategy change from the traditional product category focus to a customer-centered view. Boots already launched Advantage Card to fulfill customer requirements. By recording consumer behaviors in database, Boots collect the quotation data for their strategy. This technique is profitable for Boots solely database size is larger and larger and also data doesnt flexible. The users, analysts took a long time to research require data. So, this becomes one of the problems for Boots. By using client Data Analysis System (CDAS), Boots can solve this problem.One of t he purposes of Boots is to change Loyalist customer to New Market and to remain New Market customer as Loyalist. The later, Boots also want to create Campaign Management System to give congenial shopping to loyal customer of Boots. To complete these purposes, Boots need to witness the organizations current position by using SWOT and fella analysis. 3. 1 SWOT analysis Strength * Launching Advantage card scheme- This is a very valid fancy. It can modify Boots sales growth and also can get the boldness and respect from customers. It can also generate a loyalty market environment. Real time inlet over CDAS- It can reduce the time that will take to ask special requests on IS support. By having real time access, analysts can analyst consumer data more effectually. * Making Brand Loyalty over customer- Customer loyalty is one of the important parts for Boots marketing strategy. Having loyalty customers egress Boots to create strong melodic line environment. For an instant, a sho pper visiting Boots once a fortnight and buying nappies is probably buying from a number of supply sources whereas one calling at the store twice a week probably gets most of her babys napkin necessarily from Boots.This increases nappy sales. * Customer Focus- Boots pride itself on developing experience retail and sweeping teams which manages their respective areas. By doing this, Boots creates an internal management system, managing customers purchasing habits. Weakness * Treats honour Treats to customer can be pleasure but too much treats can make customers annoying and also become passing(prenominal) vision for Boots products when treats are repeat and repeat. * Large stores overwhelm scummy stores Branching a group of stores in particular geographical area can provide Boots customer to buy boots products any time, any where.But large stores are more persuade customer than the small stores. So, it will be a savage of store, staff, money and time. E. g. Boots large store a nd small store are unitedly in the same area, and then customer will go to large store and ignore small stores. * Cannibalization Customer behaviors can supply Boots analysis a lot but customer manners can change. If it comes out like that, that will be a big damage for Boots. For example, when boots produce a new and similar products, customer only buy these new products and never return to his/her original products. CDAS This system can almost fulfill the requirements of database system but it also has a weak point. When analysts analyst the result of recording data, in that location can be different point of view to make decision. Sales growth conversion can appear also. * meter delays can be caused at the Point of Sales due to update of points into card. Opportunity * Campaign management system This will be a good opportunity for Boots. By planning campaign management system, Boots can persuade customer according to seasons, holiday and festival. Boots Gifts & Christmas TV furnish launched in December is a good example of this.This will give customers peace and earn extra points. * Relationship marketing By making customer to become lifetime customer, boots will get a valuable customers of the future. Relationship marketing can give personal or emotional connectivity to Boots customer. By giving direct mail to valuable customer will be an example for this. * From Loyalist to new market this will also be a good opportunity. If loyalist customer changes to new market, boots products point of sale growth will increase and also boots need to maintain new market customer as loyalist.For an instant, Customer buy skin care products very much buy hair-care products in promotions and then Customer continually buy two skin care products and hair-care products. * 4% growth quantifiable growth rate in second year Threats * Customer personal data usage This can suffer customer character by recording consumer purchasing data. * Competition there will also be other companies that will use the same techniques and strategies. * Loss of gross promotion will get revenue in average. If deal seekers and stockpilers mired then that will be damage to point of sales system. E. g.When Boots promote bodycare products, deal seekers and stockpilers bought these more then promotions will meet fill. * If Loyalist customers get multiple treats then it will be co placement and also overwhelm options for repeat purchase as new market. 3. 2 pest analysis Political * Toiletries and pharmacy market are the market provided the canonical requirements of daily life so that this cant require Political in a flash. But making a promotion system will directly relate to Political. If Country insurance changed, then promotion techniques will be unstable conditions. * Planning Campaign management system will also directly imply Political.For example, Boots plan to produce new Christmas TV show but policy change than it will be a failure. * Advantage Card can also affect on political. Advantage card scheme based on customer behavior so policy changing can be imply to reduce or improve sales growth of Boots business strategy. Economic * Rewarding treats whitethorn be a good idea for promotion. But manytimes too much rewarding treats make affects to Boots promotion system. * Boots launched Advantage Card scheme in 1997 and this will be a great future for Boots as this teaching is more high-octane and reliable for most customers. Investigating ? 25million over database system will be an important part of the rational for Advantage Card Scheme. It already had great profit in first year. So, sophisticated data management and analysis tools can give Boots a big effort. Social * Relationship marketing system will change according to the culture of people. This can affect Boots sales growth. * Discussing basic customer demographic data (such as age, gender, number of children and postcode) to expend business environment can affect Social. So metimes, customers dont like to tell their personal. Targeting geographical area to ease up a group of Boots stores led to a greatly improved understanding of the role different stores play in spite of appearance that area. Technology * Customer Data Analysis System (CDAS) is one the main techniques for Boots database system. It can reduce time and constitute. * Analyzing market basket trends by shopper over time is also providing Boots with a new view of its traditional product categories. * Real time entrance fee This can improve analysts analyzing system more rapidly. By using this, can reduce time to requests on IS support. 4. Impact of ISboth Science and engineering are already developed and also expert innovations develop along already. It results to the offset of new equipment and gadgets. For all big or small company, technology transports both intangible and tangible advantages to turn into cost efficient and to get together the growing marks and requirements of cus tomers. Technological advances change business efficiency, traditions and relationship between employees, clients, suppliers and customers. The quality and quality of technology used influence the security of classified business cultivation.All big and small companies depend upon computers to achieve their administrative works when the difficultness brought by organizational tasks, like inventory, bookkeeping and records keeping. Because of producing Internet and online loving networking sites cut back the costs of business operations. One advantage of it is to become more useful and easy for companies to use Six Sigma management methodologies. Some firms changed to outsourcing rather hiring their own personnel between the low costs correlated with it.According to the huge impact of technological innovations to companies, it will be impossible for them to live with it. Advantages of Technology to stemma * Customer Relations. Technology concerns the way companies correspond and create relations with their clients. In a fast moving and business environment, it is crucial for them to interrelate with clients ofttimes and rapidly to expand their trust and to attain customer reliability. By using Internet and online social networks, firms cooperate with consumers and respond all their queries concerning the product.Launching useful converse with customers not only produces connection with them, but it also creates strong overt paradigm. It permits business enterprises to decrease and to slice carbon dioxide emissions. * Business Operations. Amid the exercise of technological improvements, business owners and entrepreneur understand their cash flow violate, how to manage their retentiveness costs well and enables business to save time and money. * Corporate Culture. Technology lets employees communicate and interact with other employees in other countries.It establishes clique and prevents social tensions from arising. * Security. Modern security equipmen t enables companies to entertain their financial data, confidential business information and decisions. * Research Opportunities. It provides a venue to conduct studies to keep themselves ahead of competitors. It allows companies to well-nigh travel into unk straightn markets. * Corporate Reports. With technology, business enterprises communicate effectively with their commencement offices to deliver quality financial and operational reports. Disadvantages of Technology to Business Unemployment bandage information technology may have streamlined the business process it has also created job redundancies, downsizing and outsourcing. This means that a lot of spurn and middle level jobs have been done away with causing more people to become unemployed. * Privacy Though information technology may have made communication quicker, easier and more convenient, it has also bought along secrecy issues. From cell phone signal interceptions to email hacking, people are now worried about their once private information becoming overt knowledge. Lack of job security Industry experts believe that the internet has made job security a big issue as since technology keeps on changing with each day. This means that one has to be in a constant learning mode, if he or she wishes for their job to be secure. * Personal Touch Technology streamlines business processers, but in ready to do so, it often displaces the personal touch of business (e. g. getting an automatise service instead of a phone representative when calling a company. ) * Commonness The commonness of a technology in business tempers the disadvantages of that technology to some degree.For instance, since so many companies use the Internet, network specialists are very familiar with how to fix issues of network security, speed and connectivity. Boots culture also has evidentiaryly changed over the years. In the early years boots had its own its structure which essentially dealt with all IT needs. Consequen tly, boots has realized that over the years it can improve on its IT infrastructure, granted that the company boost its pride on consumer satisfaction. Boots launched its Advantage Card scheme by researching in Norwich and Plymouth areas between two years trials.According to these trials, reward levels are tested out. This had begun to identify what card holders wanted from the scheme. Boots total invest ? 25 million to both Advantage Card and database. For boots, a significant slaes growth was an important part of the rationale for the scheme. Boots already have IS team and database. Boots is a long-established IBM customer. Before the implementation of available options for the new customer analysis system with IBM, Boots IS team originally researched it. IBM can give the real value during the solution development cycle.The database project started in 1997 and the project generally went well. But it is very much state of the art technology and it give a lot more painful at times t han expected. At first, IT is very uncomfortable and so no one wants to use it. After using this more than 2 years, card holder transaction records and a selection of non-card holder sales records that provides card holder behavior are increase and increased. The size of the database was going to be a challenge for performance. Analysts want database flexibility, rapid real time access to all of the data without having to make special request on IS support.It was necessary for Boots to restructure their ongoing out sourcing deal with IBM. The companys main aim for the improvement in its IT sector, is to focus on how it can improve its customer relationship, decreasing its IT operational cost and improve on its delivery capabilities. To fulfill this, Boots create CDAS according to IBMs DB/2 UDB database under AIX. After 18 months the database has reached 1,200 GB but most queries take a few minutes to run. Boots customer insight strategy team runs 23 full-time analysts. Finally, Boot s plan to manage Campaign Management System to provide customers peace of mine. . E-Marketing Strategy E-Marketing Strategy is a major part for every kind of business. By using e-marketing strategy, there are many aspects to be a successful business. The e-Marketing Strategy is normally based and built upon the principles that govern the traditional, offline Marketing. E-marketing strategy is significant as with any strategy to recognize. Finding the business environment is also the important part such as intentional groups, originating massage, choosing the right media, tools and services. Thinking based on strategy is also an essential part.Therefore will I look into the how, what and why of e-marketing, remote the advantages and pointing out how it varies from traditional marketing and communication methods and how knowledge about communication and marketing theories, technology tools, innovation and creativity can facilitate an enterprise to advance its e-marketing. E-marketing strategy in this term paper represents the all told thing from the conceptualization of a full e-marketing strategy, during to the completion of a graze of methods, tools and services needed to make that strategy a reality.A defined e-marketing strategy should explicitly identify the business goals which e-marketing efforts support the enterprise to achieve. 5. 1 E-Marketing strategy I will advise the organization to adopt There are four targeting strategies that E-marketers mostly select. * Mass marketing (undifferentiated targeting) when the firm offers one marketing mix for the entire market. * Multi-segment marketing when a firm selects two or more segments and designs marketing mix strategies ad hocally for each.Most firms use a multi-segment strategy. * inlet marketing when a firm selects one segment and develops one or more marketing mixes to meet the needs of that segment. * Micromarketing (individualized targeting) when a firm tailors all or part of the marketing m ix to a very small number of people. In this case of Boots, the best e-marketing strategy will be to pursue Multi-segment marketing, by dividing into many sub-markets from bigger markets and an organization chooses different marketing strategies to reach each sub-market it targets.The reason of choosing this strategy is because Boots offer multiple products within a larger product category for consumer. For an instant, the main category, Toiletries, there are many kinds of products such as Hair care, Hair Accessories, Tooth brushes, Tooth paste, etc. 5. 2 The value proposition and differential advantage of this strategy There are different segmentations of marketing strategy that I chose. They are Geographic segmentation, demographic segmentation, Behavioral segmentation and Psychographic segmentation, etc. All of these segmentations focus on customer center view.For analysts and marketers of Boots, this strategy will probably apply effectively. Geographic segmentation divides the B oots market into regions characterized by climate, population and cultural differences. This type of segmentation often occurs naturally. For example, Boots produces Suncare of Beauty products and it wont advertise in the middle of December. However, some geographic segmentation strategies are deliberate Boots will produce Beauty products in different countries based on cultural tastes. This segmentation strategy can provide Boots effectively when promotions come.Demographic segmentation divides the market into groups based on age, family, income, occupation, education, religion and many other variables, For example, Children clothing from Boots only target on children and mother and target higher income families. Demographic targeting is so specific that marketers have developed acronyms for certain markets for example, Drinks stands for double income, no kids. Most tactical plans in marketing involve demographic segmentation. Boots really need this segmentation for researching of purchasing patterns and customer behaviors.Behavioral segmentation focuses marketing efforts on consumers researched behavior toward the product. For example, if most consumers purchase a product during the Christmas holiday season, behavioral segmentation would set ahead heavier marketing in the time leading up to that season. In addition to specific occasions like holidays, other variable include usage rate for the product, the benefits consumers seek from the product and consumers status as a first-time or card holder. This segmentation will effect at Campaign Management system.Marketers who give activities, interests and opinion (AIO) surveys are conducting research for psychographic segmentation, which alters marketing strategy according to consumers life style preferences. This method of segmentation is useful when Boots wants to make its brands image more appealing to specific consumers. By discovering the values and attitudes of consumers who most frequently use the produ ct, Boots can improve their public relations strategies and build brand lyalty. Multi-Segment Marketing helps companies achieve stronger positioning.Positioning is creating a distinct perception in customers understanding about what makes Boots products different and better. Having more narrowly defined segments makes it easier for marketers to deliver effective passs that convey the benefits and value desired by that distinct segment. By breach customers into defined segments, Boots can remove prospects from leadation when selecting media for message deliver. Messages delivered to people not in a given segment have little business benefit and wastes money. Segmenting markets and selectively distributing marketing messages improves the value of the message.Carefully and accurately defined market segments can gives a competitive advantage over competitors. Essentially, Boots that best understands what makes customers unmatched within a segment, and different from one segment to the next. By better knowing customer segments, Boots is most likely to deliver an effective value proposition that entices the customer to Boots brand. Boots can perform more targeted research to learn more about customers and deliver messages that best match their brand strengths to their needs and wants.If Boots is planning camping system, for instance, presenting an add in an outdoor or encounter magazine might make sense given likely interests of the business market. Selecting the best media class and vehicle to deliver Boots marketing messages is crucial to efficient marketing. Market segments are known for utilizing certain types of media more often. 6. Legal and ethical issues As a long range business company, Boots need to consider Legal and ethical issues. Legal and ethical issues are directly affect business strategy, and how business deal with challenges involving government agencies, legislation, or the press.Ethics is a severalise of philosophy and according to the St anford Encyclopedia of Philosophy, business ethics is the branch of ethics that considers moral activities in a commercial enterprise. In practice, businesses are feeling for policies that ensure legal compliance and confidentiality, examine diversity and management issues, and encourage employee honesty. In these legal and ethical issues, minimizing the privacy issues of organization is an important part of Business Company. That guideline is very useful in Boots because Boots marketing strategy is based on customer data and purchasing pattern.If the important data are spreading to the other rival company, this will cause a big scratch for company. So, Access to personal information should be limited to individuals that have proper authorization. Individuals should be able to review their records and correct any inaccuracies. For instant, allowing all users to read, write and edit every part of organization can occurred data lost and data copyright. So, this way will be save ethi cal issues. Boots also use internet to give information, promotion message to its valuable customer.By using internet is very supportive for business but the raise of the Internet has brought forth many new legal issues. For instant, Cybercrime, a term for illegal acts that occur online, includes phishing and identity theft. Phishing occurs when an official-looking email, usually spam, asks for a users private information. To prevent this, there must be a well-defined purpose for collecting and maintaining the Internet user data and also only the data that is needed for the specified purpose should be collected. To protect Data of business organizations, US produce Selected US Data aegis Laws.They are * Childrens Online Privacy Protection Act requires websites to get agnatic consent before collecting personally identifying information from children 13 or younger. * Graham-Leach-Bliley Act- requires notice and opt-out consent before financial business may sell or share consumers fi nancial information. * HIPAA protects the privacy of health care information by medical providers and insurers. * ADA limits access and requires employers to protect the confidentiality of disability-related information. Above laws are very essential for all organizations and already fit for Boots business.By using these laws for company, organization system will be secure to the gathering, processing, distribution and use of information on the Internet. 7. Conclusion Finally, is is a summary report based on the expert study required from the management of Boots. In this report, I consider strategic evaluation by using SWOT and PEST analysis. Both analyses for Boots are really useful for considering the organizations current position. For example, In Strength, Launching Advantage card scheme- This is a very valid vision. It can improve Boots sales growth and also can get the trust and respect from customers.It can also supply a loyalty market environment. For weakness, Treats Rew arding Treats to customer can be pleasure but too much treats can make customers annoying and also become careless vision for Boots products when treats are repeat and repeat. In PEST analysis, investigating ? 25million over database system will be an important part of the rational for Advantage Card Scheme. It already had great profit in first year. So, sophisticated data management and analysis tools can give Boots a big effort is sample for Political. In my report, I already use cardinal (4) E-Marketing Strategies.Mass marketing (undifferentiated targeting),Multi-segment marketing, Niche marketing, Micromarketing (individualized targeting). For Boots, I chose Multi-segment marketing because of its segmenting strategies are the most suitable for Boots. Finally, Boots has done so far with developing a loyalty card scheme to collect data then analyzing them by using the CDAS system is a excellent basis for the understanding the consumer behavior in order to implement recommended e- Marketing strategies to raise the generally long term sales growth. 8. 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