Applied Business

Unit 1:

Investigating Business

Contents Page

Introduction to Bhs...................................................page 1

Bhs aims.................................................................pages 3 - 4

Bhs objectives.........................................................pages 4 - 5

External Environmental Factors ....................................page 6

Marketing Activities..................................................page 10

In this unit I will choose and analyse a particular organisation with concern to its main aims and objectives, which I will explore. With the use of P.E.S.T.L.E analysis I will also analyse how external issues have contributed to the success of the organisation.

I have chosen to analyse a clothing and homeware retailer called 'Bhs' which is also known as 'British Home Stores'. Bhs has grown from a single store in Brixton in South London to a public company in 1931 to a multinational retail company. In 1945 Bhs introduced "a policy of quality and value-for-money that continues today". They are well established as they operate hundreds of stores across high streets nationwide in the UK and also have franchises in Europe, Russia and the Middle overseas. Bhs cater for men, women and children offering a wide range of products at affordable prices. They also offer a website to enable their consumers to browse through their products and make online purchases with ease from the comfort of their own home. Founder of Bhs is billionaire entrepreneur; Phillip Greene, who also controls the other high street clothing retailers: Topshop, Dorothy Perkins and Burton.

Like most businesses, Bhs has the aim to maximise profits. A business sets itself aims or short term targets which are based on how they would like themselves to perform. Bhs also sets itself objectives which are also known as 'Long term targets', these are results of what they would want their business to achieve. They can be either qualitative which are based on opinions or quantative which are explained using numeric figures.

Bhs's main aims

* To sell quality products at low prices to its customers. - They carryout this aim by extracting low priced raw materials and then manufacturing and selling their products at below reasonable prices. In order to keep their prices low and quality high for their customers, Bhs need to utilize enterprise skills to decide which products to sell. With the use of Marketing mix which are the tools price, promotion, product and place, Bhs can promote their products and make customers aware of their high quality at low prices.

* To carry out and transfer payments securely and conveniently for the customer. - in order to meet this aim and ensure every transaction made is safe and secure, Bhs need a team of individuals working together on the tills to intake all transactions.

* To generate a business where they are superior that competition. - Bhs aim to provide tough competition to all of its direct competitors including Matalan, Primemark and Debenhams which also include its indirect competitors such as Dorothy Perkins, River Island and Topshop. Enterprise skills will be required as entrepreneurs will be required to risk take and innovate Bhs with new ideas to be able to overtake competition.

* To minimize expenditure and maximize profit - in terms of better welfare and to ensure stronger stability in the market, Bhs aim to keep their production rate at a steady but high rate so expenditure is minimized and profitability is increased. Teams are required in this sector; a store manager will keep Bhs efficient enough to calculate when to order new stock.

* To provide excellent customer service to reassure customers of their trust and reliability - Bhs would prefer to allow any refunds or exchanges if customers are dissatisfied with their product as they offer a 28 day money back guarantee. In order to meet this aim Bhs would recruit a team of customer service specialists to help customers with any queries.

* To expand its business and attract more customers to extend its establishment. - Bhs aim to create a wider selection of products to increase revenue and provide tougher competition. This requires enterprise skills as it involves innovating and expanding the business. Qualities such as risk taking, self-confidence and self-motivation need to be utilized.

Bhs's main objectives

* To provide value priced clothes which can be afforded by any household - By reducing all their prices by 5% and at a cons

* tant rate for one year, Bhs will be able to monitor how much profit they had made and how many sales they had made. Using this information they are better informed when updating prices and are able to see which prices will be most suitable.

* To accept all types of payment methods including debit/credit cards. - By accepting all types of payment and major credit cards, this will enable Bhs to meet their customers' needs as it will be most convenient and quick for them. By accepting all major credit cards, Bhs can monitor how many customers are using credit cards to by products. This can give them a higher incentive to improve credit card services.

* To increase its net revenues by 10% each quarter and provide up-to-date affordable fashion. - In order to attract more customers and increase revenues Bhs may decide to use marketing mix to promote that the latest fashion is affordable and quality is not compromised. By offering more fashionable clothing meeting the latest trends over a time period of 3 months, Bhs can monitor sales and see if there had been significant changes.

* To hold a 20% larger section of sale over stock in selected stores - This will allow Bhs to extend their product range and provide other large extras including bedding, bathrooms and kitchens and increase their revenue. They can do this by minimising the area of stock and extending the area of sale. In some stores the amount of men or womenswear may be deducted and extra homeware may be installed. This will increase the area of sale and ad revenue.

* To give customers choices of shopping from retail outlets or online. - This will ensure more convenience for customers to shop at their ease. Bhs can do this by providing a website with an online shopping facility. This will also create more publicity for Bhs on a world wide scale and will also give them more advertising opportunities on their website.

* To provide only tested and quality approved products as well as to allow returns either by post or via stores - This will keep the customer satisfied of buying an approved quality product. They can do this by purchasing up-to-date machinery and professional staff, which can test the products to the highest degree.

* To introduce new products on promotional and limited offers. - This will attract more customers as they are introduced in seasonal times, preferably when people buy gifts for each other e.g. Valentines Day. Bhs will require enterprise skills to complete this, and they need to be SMART as this is step to innovate Bhs. This step must be carefully thought over and discussed by Bhs's entrepreneur and the board of directors.

* To include an after-sales service - This will give customers added reassurance when purchasing products from Bhs as they will know that they will receive extra assistance when required. This aspect will require a team of professionally trained individuals with enterprise skills. These individuals will need to be good at risk taking, confident and have good problem solving knowledge.

External Environmental factors

A business must take into consideration external influences as they can hugely affect the business and can prove compulsory for any business to succeed. This can involve micro-environmental aspects and factors such as suppliers, investors and competition. Bhs's objectives need to be SMART which is an acronym for Specific, Measurable, Achievable, Reliable, and Time-based. By having SMART objectives Bhs can ensure that there objectives are capable of being monitored and achieved. By utilizing the SMART criteria, Bhs are now well established as they used SMART to goals and meet customer needs. Bhs's business techniques are very smart as they utilize both physical and web-space to complete all advertisements and transactions.

Micro-Environmental influences:

Bhs has thousands of shareholders, which are its investors. Theses shareholders are similar to a team of individuals who invest together to keep Bhs running. Without these shareholders Bhs would face major problems in continuing business and would have to put themselves on sale. The share prices are extremely high yet the shares ate being sold very frequently. The shareholders of Bhs consistently invest and enhance the structure of the business. If share prices were to fall, this would become an issue for Bhs as its shareholders could sell their share and place it in another rival market.

Bhs's suppliers are technically themselves, but there are many other participating brands such as Tammy, Red Herring, KHome, Gordon Ramsay's collection and many more. They only manufacture the Bhs branded products themselves in their own factories; located in countries like Burma. Investments also compliment funds in order to manufacture more clothing. Bhs serve their own brand as well; this gives all of the gained popularity and status to Bhs themselves. This a very good way of Bhs marketing their business as all the status will go to them. Other participating brands have also contributed to Bhs as they have given the public an even wider choice of products. This also proves a risk which has been taken by Phillip Green, as he has decided to include other brands; this gives the public an opportunity of a second choice.

Bhs face a large competition sector which is mainly direct. Its competitors are mainly large department stores such as Debenhams, Marks and Spencer and Matalan etc. As these stores offer very similar products at similar prices. Bhs also face indirect competitors are stores such Topshop, River Island and Dorothy Perkins

The competition around Bhs is very strong, and this is good because this aspect separates the professional from the unprofessional. The competition sector for Bhs is large and is mainly on a base of direct competition. Bhs's direct competitors are mainly departmental stores such as Debenhams, Primemark and Matalan etc. All of these stores sell very similar products at a very parallel price and remain in the same market. Bhs's indirect competitors are stores such as River Island, Topman and Dorothy Perkins etc. These are the specialist stores which provide for a specific market with a higher lifestyle, whereas departmental stores aim practically everyone whatever their levels of lifestyle.

Macro-Environmental influences:

The other section of external factors can be PESTLE factors. These are external factors which can affect a businesses rate of production. PESTLE factors can create problems for a business either before or after. These factors are divided into many particular segments such as social/cultural, political, economic, legal and environmental. But not all segments affect a business as they can vary and this determines on the businesses aims and objectives. These PESTLE factors help a business identify any factors that may affect its rate of production/service. They are used in conjunction with SMART, as SMART allows a business to neatly organise and evaluate its aims and objectives and PESTLE analysis allows a business to identify any problems.

Bhs's businesses objectives will have to be:

Specific

The business aims and objective of Bhs need to be specifically explained and understood. Their specific aim is to provide quality products to its customers at low prices. Bhs has to be sure of what it wants to do which is to create quality products and sell them at value prices to the customer. External factors such as production costs are vital to be taken into consideration as like all business Bhs also has the aim of minimising costs and maximizing profit. In order for business aims and objectives to be specific businesses need to consider the following:
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Who

Who is involved?

What

What do they want to accomplish?

Where

Identify a location.

When

Establish a time frame.

Which

Identify requirements and constraints.

Why

Specific reasons, purpose or benefits of accomplishing the goal.

Fig. 1

Measurable

Bhs's objectives must be capable of being measured so that Bhs managers can asses whether they have been achieved.

A Bhs supervisor may decide to use the "The Gold Card" to measure who their loyal customers are, how much they spend and how ...

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