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:
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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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 often they shop with Bhs. This can be kept as a record and special offers can be sent to loyal customers. This Gold Card will also allow Bhs to send special offers, information and competitions to the loyal customers; these offers will vary according what the customers purchase more of.
Attainable
Bhs managers will need to decide how many tills they will need, how many employees they will need, and for which department. They will also need to monitor how efficiently the teams are working to see if any improvements can be processed to improve any aspect. They will also need to monitor customers' views and accept feedback of any verbal and / or physical improvement on shop floors need altering.
Realistic
Bhs's objectives will assist them on completing their aims. Bhs may decide to complete the aim of generating quicker sales, by applying an objective to improve customer service with extra provided training sessions to employees. This will speed up the long waiting times caused by large queues. Special bonuses can also be given to employees to give them a stronger incentive to work.
Time - Based
Bhs's objectives will need to have allocated commencing and concluding dates. Bhs managers may set there employees a two month time-base to complete the aim of producing quicker sales.
Bhs share prices are priced high which are continuously increasing, this proves they have met their aims and objectives.
Social/Cultural
Social and cultural factors are mainly considered when coincidental problems are created and which directly link to our society or culture. For example Britain's low birth rate can prove a disadvantage for Bhs because if the birth rate is low then there will be fewer candidates to contribute to our society and keep our economies strong, which affects Bhs on the long term as there are less candidates to help keep Bhs running. The ageing population is also a concern for Bhs as there are far too many 65 year olds than 16's. These aspects are less contributing for Bhs as they also require talented individuals and if there is a shortage of them, running the business may become very difficult. This can also be a negative aspect as Bhs tend to employ younger candidates. This is maybe because Bhs is a departmental store which requires employing mainly unprofessional sales and stock assistants. The amount of professionals being created is also quite low as many people are deciding to leave education and get a full-time unprofessional job. This can affect Bhs form achieving their objective as more skilled employees are required at head office departments when for example promoting products. If there are fewer entrepreneurs then these important processes will eventually be slowed down so the amount of birth rate is a major issue.
Political factors
Political factors affect a business achieve their aims, as for example changes in the possible change to the Conservative government control can also alter aspects such as tax rates which can lead to major issues. This can affect both Bhs and its employees as pay rises will become less appropriate and this will give employees less incentive to work as their welfare is not being looked after. The recent addressing of gay/age discrimination will also keep Bhs's hands tied back as they must recruit all forms of genders to avoid problems. The growth of the EU my also affect Bhs as the alteration from the £ to the Euro can de-value the UK's currency which will affect every business. This will totally make the UK economy collapse as virtually all business related aspects; including import / export rates will have to be recalculated. This will also be a time-consuming procedure. Bhs will also be affected as they have factories worldwide as product distribution will become very expensive.
The MPC
The Monetary Policy Committee controls the money supply in the economy by setting the interest rate which will affect Bhs. The MPC and their role in the economy can affect Bhs from meeting their aim of providing quality products at value prices. If the Monetary Policy Committee set interest rates too high then Bhs will suffer from a fall in consumption and consequently will have to raise the prices of their products. On the other hand if the MPC set interest rates too low, then Bhs would have to lower their prices.
Economic based factors
Economic based factors such as interest rates and inflation are a concern to businesses as they can hugely impacts our economy which leads to an impact on businesses.
If this happens then businesses and bankers will be worse off as less people will borrow money due to the level interest.
Higher rates of interest can make a weaker economy and this may repel consumers on buying higher priced products. Interest can affect credit card holders on limiting their spending. This will also be a disadvantage for Bhs as they hold a "The Gold Card" which is used for shopping and discounts, and if interest rises too high, fewer customers will use the card as interest rates will make payments more difficult to pay. This factor will disrupt both Bhs as well as its customers. The current inflation level is 2.4% and is predicted to rise to higher than 2.5%. This shows the level of inflation is beginning to rise too high and scraping 3%, the limit of inflation rate created by the MPC (Monetary Policy Comitee).
The UK retail sales had recently been surveyed and results showed the current year's retail sales had deducted due to high interest rates and utility bills. This has been a very negative aspect for Bhs as their sales had halved during that year. Bhs's enterprise skills had maybe lost shape and efficient decisions were not applied which therefore resulted in a major failure.
Excessive inflation is another social factor, this will also be dire for Bhs because the £ currency will also become weaker. Product prices will continue to increase as Bhs and all other businesses will be forced to increase their product prices. This is bad for the economy as the payment source of money will be de-valued. This factor will also be worse for Bhs as they are a value related departmental store and if prices increase then the definition of 'value' will not exist. This will then make Bhs's aims of providing quality and value products futile. Gold and plastic are also external influences for Bhs as they utilize these materials and their prices are continuously altering due to inflation changes. These factors can affect Bhs from meeting their aim of providing low priced quality products, as inflation will cause the prices of raw materials to rise and therefore production costs will also rise.
The Chinese have recently declared to minimize the amount of leather shoes they export to Europe. This factor will hugely affect Bhs as they many of the leather shoe providers are from China. This aspect can slow Bhs's leather shoe selling, as they do stock a wide variety of leather shoes. They may also require Bhs's entrepreneur to create alternative decisions about the leather shoe supplies.
The UK's unemployment level of 5.5% is considerably low, but it is still high considering the level of UK's economy. There is a certain amount of skills shortage as well; this can affect Bhs if they require higher skilled people as there are less graduated professionals in our economy. This is an extremely bad aspect for Bhs as their business requires not only teams and marketing activities but most importantly enterprise skills. These enterprise skills are what drive the business to success and without these
Technological factors
Changes in technology can affect Bhs as they may need to consider and implement this technology. The increased use of chip and pin has reduced the amount of identity and credit card fraud. Due to these reasons chip and pin has been made compulsory for businesses to implement. This means that payment methods are now irrelevant and everything determines on the goods and service a business provides. As 54% of UK consumers have internet access and 69% have broadband, this can imply that the remaining 46% shop via retail outlets but this is quantative statement as it is an unproven numerical opinion.
Legal factors
Bhs must comply with the equal opportunities act, this requires them to employ without discrimination or prejudice of race, nationality, gender or sexuality. This act must also be followed when trading. The Office of Fair Trading implements a system insures and contains all full legal requirements for a business, its employees as well its customers to follow. The employer must therefore ensure these requirements are implemented within the business to provide a safe working environment.
The aims of Bhs maybe affected by the following legal acts and regulations:
* The Health and Safety Information for Employees Regulations 1989
* The Fire Precautions (Workplace) (Amendment) Regulations 1999
* Health and Safety at work etc Act 1974
* The Employers' Liability (Compulsory Insurance) Regulations 1998
* The Lifting Operations and Lifting Equipment Regulations 1998
* The Health and Safety (Safety Signs and Signals) Regulations 1996
* The Workplace (Health, Safety and Welfare) Regulations 1992
* The Working Time (Amendment) Regulations 2006
The role of competition has now developed in comparison to how it was before. There are now plenty of investigator mergers, takeovers and acquisitions within business competition.
Environmental influences
Environmental influences affect Bhs's reputation, such as the use of plastic bags as they are non-biodegradable. This causes Bhs to pursue an environmentally friendly alternative. As many of the clothing products may cotton or be made out of cotton this can be an issue as cotton is modified and synthetic cotton is being created. This can affect Bhs's reputation and requires them to think of an alternative which is more environmentally friendly. As the high consumption of wood has cause it to become a scarce resource, this can influence Bhs's own consumption of wood and lead them to find an alternative.
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Marketing activities are a set of activities, which involve information researching about many aspects that will help a business to achieve their aims and objectives. Such activities include mainly the promotional activities, which are undergone in order to create the publicity for a product.
Market research is a process, which provides information that a business can use to achieve their aims. A business collects and analyses data to enable them to make better informed marketing decisions. With the use of market research a business can focus on its target market and make decisions such as where a business should be most appropriately located, as well as other decisions. Market research can uncover details about the market, such as the size of the market and whether it is growing. There are two main ways for a business to carry out its market research, which are Primary and Secondary research. Primary research, which is the gathering of newly and directly, obtained information from customers within the target market. This can be acquired in several different ways such as through surveys, observation, consumer panels and test marketing. A business can also use a market research agency on their behalf. Secondary research relies on information from already published data. This can be obtained from commercial research reports, government statistics and reports; the business's own data and also sources form the Internet. Both research methods involve advantages and disadvantages. The most appropriate method is decided upon the most conveniently approved method for the business itself.
Primary Research Advantages:
Primary Research Disadvantages:
* Provides up-to-date data on the target market.
* Meets exact needs for business.
* Helps business understand consumer behaviour.
* Time consuming to collect and analyse data.
* Expensive.
* May produce biased results if it is not carefully planned with clear objectives.
Secondary Research Advantages:
Secondary Research Disadvantages:
* Decisions are very quick.
* It is relatively cheap.
* Information can be accessed of worldwide areas.
* Outdated information
* May not be precise for business needs.
* Very expensively priced reports.
Fig.2
Bhs use primary research to obtain data; this is a very expensive method of research but is the most cost effective means of obtaining the data it requires about its target market and products as unlike secondary data, it is up- to- date and concise to their requirements. Primary research can be time consuming to collect and analyse but Bhs would rather carry out this form of research as it helps them to make better-informed decisions for the benefit of its customers and its own welfare.
Bhs may decide to create a questionnaire, which could allow them to get face-to- face with their customers and be able to discover what the consumer wants and needs. in order for the questionnaire to be efficient in it use it would have to be carefully planned with clear objective of its purpose set out prior to this. This can help Bhs discover whether the needs of all customers are being made and if they need to meet the needs of select groups in their target market such as young males. It can also enable them to discover the reasons behind why customers buy particular products. Bhs may also use test marketing in which they would release a promotional product on a part of the market and monitor the success of it by recording feedback. This initially may be an expensive form of research but can prove to be cost effective as consumer views are obtained before a full- scale launch which would be greatly higher in cost. The information collected from the research methods will enable Bhs to take their customer's wants and needs into practice. They will be able to make better-informed decisions on new fashion wear and trends or the range of variety they offer. It will also indicate how their competitors are meeting the customer's needs. The process of market research will help Bhs meet their aims and objectives as it will allow them to take the consumer's view on board and make adjustments if necessary.
Bhs's marketing mix includes the four marketing tools, which make up its marketing strategy. The four marketing tools consist of product, price, promotion and place. These four aspects influence a consumer's decision on whether to buy a Bhs product or not. The product is commonly known as the goods and services supplied by a business.
Product
The product is commonly believed to be the most important element of the marketing mix. It includes services as well as goods such as care insurance, healthcare, cars and property. Its success relies upon its features. The design of the product must to include the characteristics, which will appeal to the consumer; they included fashion, reliability, durability and convenience. Bhs offers a wide product range in terms of clothing as they cater for men, women and children in separate departments. This enables Bhs to appeal to a wide range of consumers of all lifestyles by offering a wide range of products, containing the characteristics to appeal to those consumers. Bhs also offer homeware products, which are characterized to suit all lifestyles as price ranges vary. These ranges of services are known as Basic services as they do not have multiple uses. The retail and homeware sector have low complexity and high involvement as people are continuously purchasing them.
As all Products have a finite life span Bhs take in to consideration the product life cycle, which is illustrated below.
The Product Life Cycle
Fig.3
The introduction of a Bhs product never really attains the market. If this occurs, this part of the cycle will allow Bhs to make changes to the product e.g. specification or changes to the design of packaging based on market research. At this stage Bhs will need to use marketing to promote its product so customers are aware of their products.
The next stage is the growth of the product, if the customers are satisfied with Bhs's products, sales revenues should in turn increase. Any on going research can then either be used as a guide to managers on marketing actions that are necessary or discontinued. Within this stage Bhs may use marketing to extend product awareness to new target markets if required.
During the third stage of maturity, sales level off and the products may give a steady rate of profit. Marketing activities may be utilized for reminder advertising or to produce newer improved versions of the product to attract more customers.
The final stage is the declining stage; this is when sales eventually descend. At this stage a business may decide to stimulate sales for a while longer by manufacturing revamped versions or by reducing prices, this is known as the extension strategy. As at some point Bhs may be forced to stop selling the product, they will introduce new products long before their established ones achieve the decline stage of the cycle.
There was a time when Bhs went into decline, and this is when entrepreneur Phillip Green overtook Bhs and reinvented Bhs from a single store in South London into a Multi-nationally located departmental organisation. This was a major risk Green took and his enterprise skills have taken Bhs form zero to hero. He has given Bhs a massive boost and has without a doubt revolutionised retail.
Price
The price is the total amount charged by Bhs for its products. Bhs would determine the prices of their products through considering three factors, which are; cost, competition and consumer. Bhs would have to think about the cost of producing the product as in order to make a profit they would have to set their price to cover the cost of making and selling the product. Bhs extract and manufacture products of low priced raw materials and decide on a sale price while keeping in mind their business aims of delivering its customers value products. Competition is considered when determining the price of products as Bhs are a departmental store, so they cannot charge customers a higher price compared to its competitors as they produced similar products and are not sufficiently unique and superior. The consumer determines the prices Bhs set for products as the price the consumer is willing to pay should also be conversed as the price they charge must determine the value of the product and the target market.
Bhs are successful in determining the price of the products as they create products using low prices and also sell them at a reasonably low price to customers but more than the production cost. This ensures Bhs keep their trademark of quality and value. Bhs's pricing strategy is competitor orientated, as they aim to sell products which hold value and quality compared to other low profiled departmental stores which hold value but no quality e.g. Matalan and Primemark.
Bhs utilize the Value and Price strategy as they mainly determine the price of their products according to the quality and popularity of them. Below are the following pricing strategies a business can employ:
Pricing Strategies
* Value and Price - Consumers tend to compare the price with the quality of the product. They tend to be concerned with the value of the organisation and its connection between the prices they have paid.
* Cost Plus pricing - This strategy involves adjusting prices depending on the affect this adjustment will have on business. If prices commence too high then the quantity of sales will descend unexpectedly. On the other hand if prices are adjusted too low then prospective revenue is forgone.
* Penetration Pricing - Penetration pricing will most likely make the demand factor elastic, as a relatively low price is required to attract customers. Penetration is generally applied when a new product is introduced in to a market, which needs to be penetrated.
* Competition Based - The existing competition is commonly an authoritative influence on prices. If the product is under direct competition then it will compete with many other related products. A business needs to be aware of the offers and prices their competition is offering and set their offers and prices closely with their competition.
* Skimming - This strategy consists of setting a reasonably high initial price in order to give up high introductory returns from those customers willing to buy a newer product.
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Promotion
Promotion can be defined as a series of marketing activities designed to attract and make consumers aware of products and persuade them to buy those products. Bhs promote their products using sales promotion. This method of promotion provides a financial incentive to purchase a product. It is also a persuasive method of promotion as it attracts more customers to buy Bhs products knowing they will benefit in multiple ways.
As well as sales promotion there are other ways in which businesses can promote goods and services through:
Advertising:
* As Television is viewed by millions of people this is the most potential market of advertising.
* Newspapers which can be advertise nationally and locally.
* Radio as it can be advertised locally and make local communities aware of new products and offers in their nearest store.
* Internet as it can be advertised worldwide and Bhs overseas franchises will be in increased favour. It is also a very good way of promoting and introducing new ideas. Online voting campaigns can be held to get feedback from what the public would prefer.
Merchandising:
* Consumers make decisions at the point of sale.
* Competitors make extensive use of merchandising.
* A variety of rival products are on display in stores.
* Rival products have only minor differences.
Public Relations:
* Making donations to charities, this will require a team of people that will work together with the community and relate with fund raising charities.
* Sponsoring sporting and cultural activities, this will publicise a business and also give the public a good impression.
* Allowing a public visit to the business, this will make customers aware of their service and will keep the business socially friendly. This will also give customers the feeling of a friendly and warm welcome.
Bhs mainly use the sales promotion techniques to promote products. Bhs sometimes include special offers with products, for example they have recently given away two tickets to Gordon Ramsay's restaurant to the winners of a competition, and this competition involved buying a certain set of cookware. They also have used many celebrities such as Gordon Ramsay and interior designer Kelle Hoppen to promote their products and services. This has given them a boost on achieving their aims and objectives as using celebrities give huge amounts of popularity. Bhs also promote their products via their website and TV,
Bhs can also create more publicity by public relations by sponsoring sporting or cultural activities. This will put the public on their side and will socially be more appreciated. Their website is created and maintained by web specialists. They manage the websites and edit them exactly as appointed by the entrepreneur Phillip Green. The websites are constantly updated and include all the latest information on current and forthcoming products.
Place
The place also reflects distribution as it covers a range of activities to ensure that goods and services are distributed to its consumers. Bhs distribute their products in various different ways. They provide retail flexibility via both physical and web storage. Bhs have over a hundred stores in the UK and many overseas. Their main selling technique is via retail outlets as this method of distribution lets its customers purchase products with their own choice and suitability. The use of web space is also very useful as it allows the customers to purchase products via online shopping through the comfort of their own home. Bhs find choosing the correct sale outlet very important, as they have decided to produce a Bhs store in virtually every major retail outlet centre in the UK to keep their foundation strong. This aim of becoming a very strong business has now been proven positive as the amount of opened Bhs outlets show that they are very successful and their success gives them permission to continuously open stores.
The distribution technique Bhs use is known as modern (producer - retailer - consumer). This distribution process firstly involves the producer manufacturing the product in factories and testing them before sending them to stores and warehouses. Bhs's manufacturers are themselves; this makes them unique as most retailers use other designers and manufacturers to create their products. This is further expense for other businesses which do this as it is more expensive to employ a separate service to produce products in comparison with a company of your own. The products are then directly sent to the retail outlets or warehouses (for internet shopping) and distributed to the customers.
Mass and Niche Marketing Strategies
There are two types of marketing strategies, mass marketing and niche marketing. The type of marketing strategy a business adapts determines on its aims and objectives. The process of market research determines whether a business should compete in a mass market or a niche market
Mass
Businesses that want to aim a wide market will adapt mass marketing. Mass marketing normally enables a business to sell products of a similar range which other businesses also provide. This type of marketing is very popular for the highly demanded products which are purchased by many types of people. There is a great deal of competition in this strategy as the mass marketing is never-ending with new stores opening regularly.
Niche
Niche marketing aims at relatively small markets and mainly aims to fulfil the unfilled needs of customers which have not been met by other businesses. This is one way of a small business to manoeuvre profitably in markets of which are governed by large firms. There is less competition in niche markets as the concentration level is low so the competition level also remains low.
Bhs remain in a mass market and this market is full of increasing competition for them. Philip Green has decided to launch Bhs in a Mass market as Bhs's business aims and objectives will better imply in a wider market. Although there are several competitors Bhs are remained untouched as they are one of the few businesses that aim to sell quality products at low prices. This is very hard for a business to do as most businesses aim to create immediate profit by selling either high quality products at a high price or low quality products at a low price. But Bhs have aimed to introduce the combination of quality and price to attract more potential buyers. The fact that Bhs remain in a mass market enables them to cover a wider variety of market. This is good for their profitability as their business aims compliments this aspect. This has enabled them to achieve their aims and objectives by implying this method into practice.
Enterprise Skills
Enterprise skills are professional business characteristics possessed by entrepreneurs and people related to the pro business sector. This can include the possession of physical or financial information. These certain people have the responsibility of making vital decisions about the types of product it offers. How they will be produced and how much they will charge customers.
Just like any other business Bhs also need to have the qualities and abilities to meet their aims and objectives. Phillip Green is Bhs's entrepreneur, he has created many other businesses and is now concentrated on Bhs. There are separate departments that consist of many different skill requirements. Bhs will need to have qualities of self confidence and motivation. Green needs to be clear about his short term goals as he is the self-starter. He will need the capacity to believe in his own abilities without the help of someone else. He will also have the capacity to ignore other negative opinions and figure out alternative options him self. Green also has to be good at the aspects of risk taking and has to be never afraid to fail, and recognize that failure is an indispensable part of future success. Green will also believe to learn new lessons from every experienced failure which can help on later success. Bhs also have to be good at identifying and exploiting marketing opportunities. This section of qualities will require concentrating mainly on customer needs and then constraining the motivation required to take benefit of these opportunities. Bhs will also have to be able to innovate, they will need to think of new ways to improve products and look beyond traditional perceptions by finding out about more updated products and customer views. Bhs will also need the ability to build teams and inspire them as there are endless talented individuals which can achieve goals without the help of others. These professional talented individuals can save Bhs a lot of time, which can also represent money. This can be better for Bhs if they decide to combine a group of talented individuals to merge their visualization and enthusiasm with others to meet their objectives even quickly and efficiently. Phillip Green has revolutionised retail and his success shows that he has met his aims and objectives. He had taken Bhs from a small store in South London to a multi-national store with many franchises overseas. His ability to risk take and innovate Bhs with new ideas has given Bhs a new presence.
The enterprise skills really helps Bhs complete their aims as the self confidence and risk taking aspects are important to create short term goals by giving the business a start and a set path. The identifying, ability to innovate and build teams help complete their business objectives. These sections of enterprise skills help the business expand their ideas of introducing new products and inspiring new members to develop Bhs even more. Enterprise skills are very important for a business as these motives are created by professionals, and this is what drives a business to success.
Groups and teams
In a team the individual members of the group work alongside and support each other. Bhs contain teams of people with clear objectives. People in a team help and complement each other, this will not happen automatically as people in the team have to co-operate to achieve tasks. Groups consist of individual members that work on the same project but work independently. There are two concepts of teams, team membership and team leadership. Team members often approve alternating roles, and this determines on each individual personal characteristics. Team membership can consist of:
* Active roles - Shaper, implementer and finisher.
* People roles - Co-ordinator, team worker and resources investigator.
* Thinking roles - Plant, monitor/evaluator and specialist.
Team leadership requires flexibility as effective teams can sometimes be very difficult to control. Different types of leaders suit different situations. There are two types of leadership, they include:
* Relationship-motivated leaders - Leaders that enjoy working with people and are people orientated.
* Task-motivated leaders - Leaders that enjoy getting the job accomplishes and are task orientated.
Neither of these leaderships is suitable for every occasion. The chosen leadership is determined on three factors. Bhs have many types of teams which vary from face-to-face advice given from customer service departments in stores, to after sales advice and support centres which can be contacted by phone and email. These types of teams require specific training and will need to have specific skills to achieve these types of jobs. These people need certain enterprise skills such as risk taking, determination, problem solving, independence and confidence. Another type of teams can be the employees that work on the shop floor; they will all be given specific duties to complete. This can vary from normal a sales advisor to a tills cashier. Other teams can involve behind the scene, stock staff which will work together to complete tasks.
* The quality of the relationship between the leader and the team.
* How clear and constructed the team task is.
* How much power and authority the team leader has.
In comparison with Belbin, Bhs's team leadership is task-motivated as Bhs aim to provide its customers the excellence in products and service. The Bhs Chief Executive has people roles - Co-ordinator, team worker and resources investigator. This role would require the Chief Executive to co-ordinate other employees on what they need to do. They will also need to be good at working with teams. They will also need to be a good resources investigator that can think of new ideas which can benefit the company. Bhs CEO will also need to be good a risk taking, ability to innovate, build and inspire teams and have good determination. The board of director is as far as it goes; these are fully trained and professional people that will have the skills of risk taking, self-motivation, confidence innovating abilities, and determination.
Bhs's marketing activities have greatly helped them become a successful business. They have utilized many different marketing ideas which have massively increased their publicity and importance in the market.
Bhs have used the help of celebrity talents such as Chef Gordon Ramsay who has designed kitchen collections especially for Bhs. They have also exercised interior designer
"Kelly Hoppen who has twenty five years of experience in interior design. Kelly has created two outstanding collections exclusively for Bhs called KHome featuring more than 180 products, with more to be added in the future." (Taken from the Bhs website) This is a really good way of promoting Bhs's products as employing very experienced people including celebrities will help endeavour customers to buy their products.
A team of professionals were also required to make this process come true and these people can include for example, Bhs's website designer to Gordon Ramsay and Kelly Hoppen which verbally work as a team to satisfy Bhs's customers as they all symbolise the same aspect, but in different departments. Bhs also hold competitions which can sometimes relate to the celebrities. For example they are currently having a competition where the customers have the chance to "dine like a star", at Gordon Ramsay's restaurant. This is a type of sales-promotion technique as it assures and satisfies customers in multiple aspects.
Bhs have now teamed up with an international brand known as Tammy and have declared to provide service overseas. Bhs also have several varying departments which involve numerous professionally trained individuals. There is a customer service department which is generated up of many different professionals that give advice on whatever concern a customer has. Other sections include, menswear, womenswear including wedding suits and lingerie, kidswear which also includes school wear. All of these services embrace a team of staff dedicated to give the required help. Bhs also have a careers section on there website, this is a good way of inspiring other talented individuals out there to come forward and join Bhs's team. With the help of these talents Bhs have overcome many aspects and introduced new complimenting and benefiting ideas. After they had stabled their position in the market they decided to take further risks and expand by:
* Changing store formats - create room for newly introduced bathroom, lighting and bedding.
* The stock of new clothing lines - introducing new brands and clothes.
* Special departments - Bhs has dedicated and niche departments that consist the school and weddings departments. In the wedding department, an expansion programme is underway with many products becoming available in an increasing number of stores and online.
* The online Bhs School Shop - 'Bhs School' is the latest department to receive a major design review; with its new "short, tall, big or small... we've got it all!" slogan and promises to "Fit the Nation".
* Bhs's school departments received a complete facelift (both in store and online) well ready for the Back to School 2006 rush.
* Brand Imaging - At present there are a number of corporate brands being used by Bhs, this is caused by Bhs's policy of refurbishing and applying new branding to the better (financially) performing stores first and slowly working through the store "league table" thereafter.
* Many departments within the stores have recently received a brand revamp. Departments receiving the updated branding include Women's and Men's Fashions, Sports Wear, Petite, School and Shoe Shop. Riviera (Bhs's holiday shop brand) received a revamp.
* The Bhs School website has also received a revamp to reflect its new brand identity; following suit with its online presence at least is Tammy who have also launched a new look website.
* The relatively useless main Bhs website will be introducing a range of Homeware, Furniture, and Wedding Attire later this year
* Gift vouchers are available in £1, £5, £10 and £25 denominations. £1, £5 and £10 vouchers are available to purchase at all Bhs UK stores; the £25 voucher however is only available to purchase at selected Bhs UK stores. All vouchers can be used as a method of payment in any Bhs UK branch and do not carry an expiry date; this has given Bhs customers better convenience.
* The Gold card, which is the Bhs combined payment and discount card, created and administered by GE Capital Ban. It has an average APR of 29.9% although, when paid by direct debit this is reduced to 26% - both carry a 56 day interest free period. Many other special offers were introduced which related with the Gold card.
* Every store has a Store Manager, Assistant Manager and Admin Manager. These positions are accompanied by Department Managers (Men's, women's...etc...) and the Restaurant Manager. There is also Loss Prevention (LPO), responsible for the security of the store. Each Store Manager reports to their Regional Development Executive (RDE).
* Bhs had opened a number of offices across the UK. Alongside the company's main head office in Marylebone, London; offices are also located at Euston, London and Luton, Bedfordshire.
* Bhs also had opened a range of stores across the world. These international branches are operated on a franchise basis and aren't directly owned by Bhs Ltd itself.
However Phillip Green, billionaire entrepreneur has admitted that he would have to spend at least £100 million to revitalise Bhs after profits at high street chain halved. Green also owns Top Shop, Dorothy Perkins and Burton. Bhs's clothing sales had dropped by 7.1% in underlying sales. Bhs's sales figures have been dropping recently and this isn't good news as they would have to spend colossal amounts of expenditure on aspects such as marketing etc. The main reasons why sales have declined are particularly due to high interest rates, and utility bills. People in our economy have other costs and a great deal of Bhs's customers hop with credit card and if interest rates rise too high (which is what has happened) then less people will buy clothes. This is also bad for Bhs as they have "The Gold Card", and Bhs will be forced to increase their interest rates as well.
Bhs spend millions of pounds on market research. They mainly utilize primary research as although it is the most expensive; its results are the most promising and accurate. This is good for the company as it lets them learn a lesson and discover any faults they are producing, this will also allow them to renovate problems so future problems are less likely. Bhs can also take more approving risks to achieve customer's needs. They do this many times throughout the year but are only required when there are losses. Bhs's experienced team members will allow them to take decisions themselves as they will know how their customer's minds work through innovation.
The Bhs organisation consists of several different roles which depend on the department of either basic trainees or professionals. For example Bhs's retail outlets may include shop floor or stock replenishment employees. By contrast, Bhs's Head Quarters department employ professionally trained employees to manage and complete more important and higher-skilled tasks. Bhs employees are trained at diverse levels as different tasks require different skills and qualifications. I think the professional related jobs are more important as they require more effort and time to complete. They are usually higher paid jobs as well, this can imply on how important these jobs are (for economic reasons).
The use of teams for Bhs can be extremely productive as this can allow the company to manoeuvre more steadily and efficiently. The contribution of professionally trained team members can make Bhs a stronger organisation. It will also be enhanced for Bhs if multiple talented individuals team up and create more effective ideas to improve its company. Teams for Bhs are huge advantages but there some disadvantages. On the other hand if Bhs exploit more talented individuals to work in teams, decision making will become inflexible and problems can be caused if disagreements occur. But this can be affected depending on the type of required leader - Relationship or Task Orientated leader.
I think Bhs's enterprise skills and teams have mostly contributed to their aims and activities. This particular factor is maybe the most important factor as Bhs's history proves a lot which supports enterprise skills. The history of Bhs is really interesting as their journey of how they have become such a successful business is something to be proud of.
Bhs's enterprise skills have given them to power and intelligence to achieve their aims and objectives. They have produced and introduced so many different expansions including Bhs School, Bhs Kids to Bhs Men's / Womenswear and Bridal outfits as well as Homeware. There success had also allowed them to provide a payment and discount card, known as The Gold card. Other introductions included more homeware which soon included bedding and lighting etc. Gift vouchers were also soon available for purchase; the amount of expansion Phillip Green has done is immense.
The enterprise skills have remained a success for Bhs apart from the recent halve of profits of the high street chain as a problem may have occurred and Bhs's enterprise skills can be to blame. Bhs do have a Phillip Green a very experienced entrepreneur who has several years of experience and this will be better for Bhs as making decisions will be easier for him as he will not require assistance. I think the enterprise skills have contributed mostly to Bhs.
With the help of enterprise skills Bhs have managed to:
* Transform a single store in south London into a multinational departmental store in the UK. With many franchises overseas.
* Minimize expenditure and increase profits by transforming Bhs into a store that trades all types of products including lighting and bedding.
* Phillip Green has managed to revolutionize retailing as he virtually started from scratch and has made Bhs achieve abnormal profits all the time.
* Phillip Green has also expanded Bhs to a massive degree with hundreds of stores nationwide. He has opened many stores overseas as well.
* The level of competition he has generated is also immense and Bhs is a now a worldwide brand.
The factors of Teams are necessary but not as important as enterprise skills. These teams are directed with roles and tasks to complete. As teams are required to make a job complete but the enterprise skills are what makes a business achieve aims and objectives. It allows a professional to attain and project their ideas to improve the business and indicate which other groups of teams will be required to complete these factors.
With the help of teams Bhs have managed to:
* Overcome their aim to generate a business that is stronger than competition. The help of the enterprise skills directing the teams has created Bhs a very strong competitor.
* Transfer transactions efficiently as their team of tills staff have taken this role in an appropriate manner.
The final factors of marketing activities are relevant for Bhs to use but this factor is less important than enterprise skills and teams. As teams are required to make a job complete but the enterprise skills are what makes a business achieve aims and objectives with the help of key characteristics. Marketing activities are an extra aspect all business must do efficiently to achieve an aim. It allows a professional to attain and project new ideas to improve the business and indicate which other groups of teams will be required to complete these factors.
With help of marketing activities Bhs have managed to:
* Provide the latest fashion wear at low prices as their current prices are priced at a value - price strategy.
* Promote Bhs to a certain extent where their products and brand is well known throughout the UK as well as worldwide with several franchises.
The four P's, Price, Promotion, Place and Product have contributed to Bhs as it has allowed Bhs to structure and organize their what they will sell, at what price, how they will promote and to where they will promote.
Overall I think the most important factor is enterprise skills. These skills have allowed Bhs to hugely expand and innovate continuously. The enterprise skills have given teams the tasks to complete by using marketing activities. This is why I think Bhs's stem is its enterprise skills and the teams and marketing activities are its branches.
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