- making a profit
- providing goods and services to community
- surviving as a business or expanding
- providing a competitive service
- being environmentally friendly (this links with business ethics)
- profit maximization – which is growth in profit and the customers which purchase the product.
- Product satisfying - giving a bigger outlet for products to be sold i.e. base bigger shops.
Objectives on the other hand, are the steps needed to be taken to achieve these aims or goals. For example if Boots had an aim to open the new store in 6 months time then a good objective would be ‘to employ 10 new staff for the new store’. Most company’s aims and objectives can be found in their mission statement which outlines their intent as a company. They could also be sourced in places such as annual reports as well.
A way that many businesses set to achieve their aims is to create SMART targets. By using a SMART target, all of the things that need to be carried out to achieve the aim, can be measured to assure it is successful. SMART stands for the 5 things that need to be considered when making targets in a business. They are Specific Measurable Achievable Realistic Timed. By tracking each strand of the smart target it can be assured that the objective can be measured regularly to ensure that the business goals and aims can be achieved.
SMART can be shown in more detail as follows –
Specific – They should have focus and not be vague
Measurable – They should include a number that can be measured
Achievable – They should be challenging but realistic and possible.
Realistic – If staff don’t think that they can be achieved or that they are relevant to the business aims then they will be ignored
Timed/Targeted – The objectives must have end dates so that success can be measured.
4.0
As said previously the aim of the new venture is for the store to be fully operational within 6 months. I have decided to open the store at the end of October 2006 which will mean that work begins at the end of May 2006. I have chosen this date because I believe that it is an ideal opportunity for the store to open when people want to start buying Christmas gifts. People will be shopping at discover trentham for unusual and different gifts for people and will see the Boots store and maybe make use of the 3 for 2 Christmas promotion that occurs annually at Christmas in all Boots stores. To fulfill this aim it is crucial that some objectives are made so that the whole 6 months are fully planned out which will then result in the store being open in October. The objectives are all SMART targets, I have labeled how the first objective is SMART but the following objectives are in normal form.
Where we are at the moment, the Boots store is a bare shell. The exterior is built like the other stores in the location which in this case are like Swiss chalets. Therefore the first objective would be to get the first crucial interior building done. The first objective consequently will be to –
1. Have the lighting, heating, plumbing and flooring done first within four weeks completed by the end of the month. Here is how the target applies to SMART –
Specific – The objective applies to the 4 operations that need to be done first
Measurable – It is measurable because there is a time limit of one month, so if it takes longer it can be measured how much longer it has taken.
Achievable – It is achievable because there are no obstacles preventing them from being completed, they are the first things that need to be done before anything else.
Realistic – One month is a realistic time limit in the overall 6 month operation
Time – The time is the one month. All of the things needed to be done to fulfill the four tasks need to be scheduled and completed within that month.
The further objectives are as follows –
2. To create a floor plan and create that within the store in 4 weeks to be completed by the end of the month. (June)
This means that fixtures and fittings need to be ordered, installed and finished within a month after the first objective is fulfilled. This can be done by outside contractors so whilst this objective is being achieved further objectives done by Boots staff can happen at the same time.
3. Recruit and train existing staff for the new store within 3 weeks to be completed by the end of the month (July)
It is crucial that the right blend of staff is chosen for the new store. The workforce need experienced Boots staff that will be able to guide new staff and train them to also be experienced. Therefore the staff that are needed are as follows –
1 experienced pharmacist
1 experienced health assistant
1 experienced baby department assistant
1 experienced I.T staff.
The i.t. staff may only be employed for the technology installation but they are crucial. Someone experienced needs to set up the tills and epos system which is also vital as it will be used as an automatic ordering system whereby low stock is automatically ordered.
4. Recruit and train new staff within 3 weeks to be completed by the months end. (August)
New staff will need to be recruited, these will include part time and Saturday staff who will need less training than full time but will be a vital part of the team. It will be a good idea to recruit these people a good month before opening so that they can be trained within the new store so that they are familiar.
5. Order 100% of stock and distribute it to the shelves within the store within a month, this must be completed in the last day of the month (September)
The stock range needs to be determined way in advance of opening. The store is going to be relatively small so they will not have the same range as a larger store. Therefore the stock that is sold needs to be those that are wanted by the local residents and the everyday visitors to the site. Once the stock has arrived it needs to be put onto the shelves which can take a while as there will be thousands of items to be put onto the shelves.
6. Prepare the store for opening within 1 month to be completed by the beginning of October
The store will need to be cleaned at fully prepared for opening on the opening date which will be at the end of October. Promotion will need to be distributed to ensure people are aware of the opening and that the opening is a success. This will be done by delivering 10,000 leaflets door to door throughout surrounding areas in Stoke-on-Trent. Everything needs to be perfect for the opening day
7. Set opening and closing times within 2 weeks to be completed by the end of October.
Before the first day of trading, it needs to be determined what the opening and closing times for the store will be. Some days will have different opening and closing times. Mainly the store will be expected to open at 9.00am except from a Sunday when it will open at 11.00am. Closing times will vary but mainly be 5.30pm except from closer to Christmas when people are late night shopping so then the store will close later to make time for more trading.
If all of these objectives are fulfilled then the aim of being fully operational within 6 months can realistically be achieved. When the new store is open it will have effect on things such as sales, profit and market share on Boots as a whole. This store is an a totally different place that a Boots store would be typically situated, therefore a new audience may be reached thus resulting in more sales because a public that may have never shopped at Boots store are now shopping there which is obviously more sales and revenue coming into the Boots organisation as a whole.
Different functional areas will have different aims and objectives. They will be different to the aims and objectives that are set for the company as a whole and they will be different to the ones set for this particular venture. Here are some of the functional areas and the aims and objectives that they would typically have –
Human resources
Aim – to employ a new manager for the store in one month
Objectives –
- advertise the most
- interview the applicants
- make a decision (who is the best applicant)
- inform the most suitable person for the job that they have got the job
Finance
Aim – improve company finance by 5% over 12 months
Objectives –
- Cut down on waste, this will reduce costs
- Make better sales decisions that aren’t as costly to the business
- Keep retention levels high, the less people that quit working for the company, the less costs that are incurred for interviewing new people.
Administration
Aim – Improve office efficiency by 10% over 18 months
Objectives –
- Organise documents in alphabetical order in a well kept filing system
- Improve communications between clients to ensure that things such as orders and customer comments are constant and first-rate.
- Improve security systems within the business to ensure that everything runs safely and smoothly in an efficient manner.
Marketing
Aim – To improve customer awareness by 10% in 6 months
Objectives –
- Advertise new products on-line
- Advertise through product placement in up and coming movies that would give boots good credibility.
- Distribute flyers in areas that media coverage regarding boots would not typically reach so that they are aware of new and existing stores that they could visit.
Sales
Aim – Improve sales by 5 % in 12 months
Objectives –
- Make price cuts to entice customers and make more sales
- Use incentives through the advantage card that would not only encourage more subscriptions to the card but more sales made through it.
- Use sales promotions such as buy on get one free’s to get people interested in the company and the product, then when the offer ends they may be still interested at full price.
As you can see, all of the functional areas have separate aims and objectives of their own. But all in all, if each of their aims and objectives are fulfilled then it is likely that the business aims and objectives as a whole will also be fulfilled.
5.0
Another tool used by businesses to support objectives is action planning. Action planning can be used to focus the aims of the business over a given period of time. A type of action planning that is used to do this is Strategic Planning. Strategic planning is the process of determining a company's long-term goals and then identifying the best approach for achieving those goals. They are Long-term plans based on the organizations overall business objectives. Strategic plans typically last for many years. Strategic Planning can be followed through 4 stages, when each stage has been fulfilled then the objective has moved on resulting in it being completed and other objectives ready to be fulfilled. The 4 stages are –
- Where are we now?
- Where do we want to be? (vision)
- How are we going to get there (aims and objectives)
- Review of the business (is it on track)
If this type of planning was applied to Boots then these four steps would look like this –
- Where are we now? Boots are beginning to open a new Boots store in discover Trentham. It will take six months as of today and the interior work is beginning to be done.
- Where do we want to be? In 6 months the Boots store should be fully operational and open for business
- How are we going to get there? By setting aims and objectives which have been fully explained above
- Review of the business. After the 6 months the success of can be told to see if everything was done successfully and if things would be changed the next time a new store was opened.
Another tool that a business can use as action planning is tactical planning. It is very similar to strategic planning but on a shorter timescale. For example if the business needs to respond quickly to something that can have a negative effect on the business then tactical planning will be used to determine what they are going to do to resolve the matter. They might do this if the competitions product price is reduced dramatically which has resulting in all of your customers buying the product elsewhere. Then planning will be used to determine if the price is reduced in your business to get the customers back. This could be applied to boots. If there is another store on the same discover Trentham complex that is selling similar products that boots are then boots may decide to quickly change some of the prices as an introductory offer for the opening of the new store. This will make up peoples minds to shop at boots over the competition. Furthermore, if another store was to open at the same time as the boots store at discover Trentham then boots would need to quickly pull out all of the stops with promotion, to get people to notice the new store.
6.0
Once all of the aims and objectives have been set it is essential that the business has all of the resources needed to fulfill these objectives because if they don’t then the objectives cant be achieved. These resources include – staffing, equipment, working capital, Technology, administration etc. therefore I have completed a check list for all of the things that the new store will need to complete its aims and objectives, if all of theses things are completed then the aims and objectives should be successfully fulfilled –
Staff –
One manager will need to run the store and direct the staff. One full time Pharmacist will need to be employed which is a legal requirement. Another 7 full time equivalents will need to be employed which will range from staff working all week and maybe extra staff at the weekend where customer figures are likely to increase. These staff will be working 7 days a week at the Discover Trentham store.
Equipment –
5 tills will need to be purchased, installed and staff be trained up for them. Then at least 2 islands will be needed for both the beauty and health sections of the store, these can cost up to £20,000 each. Then at least 10 shelving units will be needed to accommodate all of the products on sale. The units will have 3 or four stories of shelving and be double sided and have gondola ends for offers. Other equipment that would need to be bought are tills. 5 tills will need to be purchased that will cost £1,000 each, therefore it will cost £5,000 all together for the tills. Furthermore, refrigeration units will need to be purchased because the new store will sell drinks and refreshments which will mainly appeal to the tourists that want a drink or sandwich. These are likely to cost in excess of £20,000 each.
Working Capital –
The equipment and fixtures and fittings all cost money. This money needs top be readily available to ensure that the store is fully operational in 6 months. If the right budget isn’t set and there isn’t enough money then this won’t happen. The budget needs to be big enough to accommodate the £105,000 quote for fixtures and fittings, the £5,000 for tills and installation and also the £40,000 for the 2 fridges. Therefore, not including promotion costs that will come from head office. The working capital will need to be £150,000. other costs that will be incurred include staff costs, but these will not need to be paid in the 6 months in advance of the new store opening.
Technology –
Technology is crucial in businesses these days. Epos systems are a necessity, they allow for automated ordering using barcodes, thus making the ordering process much smoother than it would be years ago. Other technology needed will include state of the art CCTV to try and cut down on theft which is an everyday worry of any business working in the public.
Monitoring is essential so that the Boots store can continue to perform at the level it needs to succeed. It is also essential that any problems that occur are dealt with right away. Things don’t always go the right way, therefore when things go wrong a tool that can help is troubleshooting. Troubleshooting is a method of solving the problem by working out what is actually causing the problem. By getting to the root of the cause, you can put it right so that it will hopefully not cause any further problems. Troubleshooting can be done in many ways and is good completed in a group where more peoples opinion can be gained to help get to the root cause. Ways that I, the boots manager could use troubleshooting include –
- If a member of staff was not performing then senior managers could use troubleshooting to decide their plan of action
- If a member of staff was suspected of stealing then trouble shooting could be used to decide what to do about it and determine if they actually are stealing
- Another example would be if the electric or the gas wasn’t working so there was no heating then you would use trouble shooting to see where the problem is coming from and call the builders.
- If there was a problem with shoplifting in the new boots store then we could troubleshoot to tackle the problem, this could involve improving security and buying new equipment.
7.0
When managing and monitoring the objectives in a business it is very important that every step along the way of doing this is monitored to ensure that each step is carried out properly and will result in the objective being completed successfully thus fulfilling the business aims. There are many different methods that can be used to monitor business aims and objectives. Namely Critical Path Analysis and Gantt charts.
Critical path analysis, also known as CPA, is a type of planning technique, used to plan complicated projects. It shows all of the operations in a project or operations and the time taken to show those that are critical to the completion of the operation. For example if one operation is delayed it will directly impact on the other operations that are yet to be fulfilled. By following the critical path it can be decided which path is most critical and most important to the projects/operations success. This is what a CPA chart would look like –
Diagram ref. wikipedia.co.uk
The critical path follows the top line i.e. A-B-D-F-G. this is because this line takes the longest to complete, so if the critical path was the bottom line then the top operation wouldn’t be able to be completed because it takes longer to complete than the lower operation. A CPA essentially located the longest time that the task will take to complete and shows where more than one task can be done at the same time to save time. A business like Boots would greatly benefit from using a CPA table to monitor its performance and future planning. It will allow them to see realistically how long a task will take to complete and see when things should be done. By having a specific route to completion then the objective is more likely to be completed successfully because the end is in sight as such and everyone has their own objective within the small tasks of the critical path.
Another method of monitoring that will help monitor the performance and future planning of Boots is a Gantt chart.
Gantt Charts (Gant Charts) are useful tools for analyzing and planning more complex projects. A Gantt chart is a useful tool for planning and scheduling projects. They allow you to assess how long a project should take, determine the resources needed, and lay out the order in which tasks need to be carried out. When a project is under way, Gantt charts are useful for monitoring its progress. You can immediately see what should have been achieved at a point in time, and can therefore take action to bring the project back on course if things are off course. Tools to create Gantt charts include Microsoft Project, this computer programme can allow a business to build and manage Gantt Charts.
This is an example of a Gantt chart –
Diagram ref. wikipedia.co.uk
Boots could use a Gantt chart and CPA table in the opening of the new store or other projects. It can allow them to see exactly how to fit every crucial operation within the set 6 month timescale. It will allow them to see what things can be done at the same time to save time and be more efficient. For example whilst the store is being fitted, there is nothing stopping the recruitment and selection team at boots, start recruiting internally and externally in time for the opening. As long as the store is ready for the time the staff have been recruited so that the staff can start training, there is not reason why the two things cant be done at the same time.
8.0
All business has things that happen that aren’t expected. This could cause problems or could be positive. Some businesses will only look at problems arising within the business. This is known as exception analysis. It involves the theory that Problems will be analysed when they arise and dealt with at that time. This might sound short sighted and if applied to the whole business then it certainly could lead to the business not spotting opportunities that might present themselves through other monitoring methods already considered. If boots did this in the opening of the new store then they might run into trouble. For example if they didn’t plan the opening in great detail and just waited for any problems to arise then the opening could be a disaster. Some problems that could happen are –
- Too many people arriving and there not being enough room in the store, therefore there needs to be staff or bodyguards watching the numbers entering the store
- Too few staff for the opening day, at such short notice there isn’t time to get more staff, therefore when planning it is essential that staff from other stores are on standby if they are needed to help out.
These things could easily happen so they need to be planned for and not just wait to happen because if you wait it could become too late to solve the problem.
Variance analysis is used to monitor what is actually happening to things such as costs, revenues and budgets in relation to that planned. Boots, for example, may have worked out a cash-flow forecast for the new venture and estimated its annual profits to be 100,000 for just that store. If the actual revenue shows a figure below that, then this is referred to as negative variance and may trigger the need to take some action to see what may be happening to have caused the negative variance. If, on the other hand, the revenue figures were greater than £100,000, then this would be referred to as positive variance. This might be good news but the business would still be interested in finding out why it has happened so they can use it when planning future ventures.
9.0
In an organisation it is crucial that the business is continually improving. If they find a good formula for the business and it is bringing in many customers then it may be a good source of revenue now but things are constantly changing and therefore a business needs to ensure that they take note of continuous improvement. A way of doing this is to use the kaizen method. Kaizen is a Japanese word meaning continuous improvement. It involves employees within a business being involved in improvement processes which will gradually improve the business over time. The key to kaizen is employee involvement and commitment to improvement. The main elements in the kaizen method includes –
- teamwork
- personal discipline
- improved morale
- quality circles
- suggestions for improvement
If these 5 elements are fulfilled then the three key factors that are labelled below will be able to be completed. The are –
- the elimination of waste
- the elimination of inefficiency
- standardisation
If kaizen is followed correctly then the business will be a much easier place to work in, this may then result in increased profit and sales because the workplace is better and working to a higher standard. Less waste and inefficiency will result in costs to the business being lower. These savings can then be used to be passed onto the customer in the form of price cuts or can be used for new ventures in the form of capital to open new stores. Overall it will allow for continual improvement.
Kaizen could be applied to the opening of the new boots store. It will allow for all of the operations to run more smoothly. However the most likely place that the kaizen method would be applied is in head office or production. If it is applied in production then it would hopefully increase output figures and speed up the time taken for the products to be made and delivered to the store, thus improving efficiency.
10.0
Another good way of monitoring the success of a single business or store within a business is to benchmark. This method involves similar businesses being linked together to compare their performances. The benchmark is average result expected in that area. Benchmarking is a process used in management and particularly strategic management, in which organisations evaluate various aspects of their processes in relation to the best practice, usually within their own sector. This then allows organisations to develop plans based on those used by the best business in the sector, usually with the aim of increasing some aspect of performance. Benchmarking is often treated as a continuous process in which organisations continually seek to challenge their competitors.
The procedures involved in benchmarking include –
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Identifying problem areas - Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; or in-depth marketing research, quantitative research, surveys, questionnaires etc.
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Identifying organizations that are leaders in these areas - Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of comparison.
Boots could use benchmarking against other boots stores within the UK. There are 1,400 stores in the UK all of different stores. These could all be grouped by size on the scale of the alphabet i.e. (A, B, C etc). if all of the A’s were grouped and so on, then they can be benchmarked fairly to see where things can be improved. Therefore if the new store was grouped with other small stores it can help compare the success of the new store against more established ones.
11.0
There are many factors that need to be taken into consideration when monitoring a business. Many of these can be external influences that can threaten the success of the business. A main external influence is the competitor. A competitor can really have an influence on the businesses success. They could do the following to influence business decisions –
- Create a new and better product
- Offer discounts
- Open up a new store
- Improve/refurbish an existing store to entice new customers.
Some of the external influences that can happen to Boots in their new store can include –
- Moving out of town – the highstreet is cramped with more and more brands and stores so new ideas need to be made to get new customers and improve market share. Therefore by moving out of town Boots hope to gain new customers from a different market.
- The new store is in Trentham Stoke on Trent – Stoke-on-Trent is known for old coalfields so if a misused mine was found under the Boots site then it would seriously hinder the chances of being fully operational within six months.
