Businesses choose certain objectives for different reasons. One way is to use the SMART method, which includes the following aspects of a business (definitions gained from a business website) Specific – Means being precise about what you are going to achieve similar to the mission statement Measurable – Giving measurement for an objective Achievable – Can or is it possible Realistic – If it is possible; how much so; are there enough resources e. g. funding and labour to achieve. Timed – When will the objective be achieved and putting the objective into a time frame of e. g. month or 2005.
The objectives chosen could easily have been designed around this method. I feel the objectives may have been chosen as opposed to others that may have been suggesting because they convey variation. The achievements that Boots will gain from following these objectives will be different and possibly more beneficial than that of other businesses objectives. This is because boots objectives are aimed at increasing value and service standards for the consumer who in turn will reflect on other objectives such profitability. Have and if so by how much have Boots managed to achieve set objectives
Boots has achieved some objectives and has managed to maintain them in secure ways. Customer loyalty has been expanded on and has a strong base in the form of the Advantage Card. Boots aims this at the regular custom and aims towards satisfying their needs. A proven measure of this is that they feel that 72% of regular customers have an Advantage card. Benefits such as price reduction and special offers also apply with this card. This is an effort to increase customer loyalty; the proof for this is that Boots feel that 14 million are members to this card scheme.
The objective of expansion and globalization has been that boots wanted to “reinforce our key role in the UK’s primary healthcare”. This means that they want to stick to current sales approaches but to expand on product range into health care. This applies to objectives such as modernization; better quality and services start of globalisation and as a long-term strategy increase in profits. Growth is an easy one to assess initially. Boots have set aside 17 and a half million pounds for 2003 for their own health brand so they can aim to expand product range to reflect on profits.
This has not however been put into action yet. Modernization and technology have been approached by ‘upgrading systems’ that will increase the level and speed of customer services. Boot in November recruited 7 000 members of staff which would have added to the level of customer service and they have also set out paid training for all staff which does encourage the modernization and the use of technology. This website in itself has all the information needed by a customer; this shows uses of technology in respect to improving customer services. Boots, as a company is a PLC this means that it is part of the private sector.
PLC stands for Public Limited Company. As it originated as a shop independently it has expanded in such a way that it has kept its independence by not being bought out by a bigger company (a holding company). It has however sold shares. Being a PLC means that boots has floated it shares on the stock market for anyone to buy. This has as with any business decisions had advantages and disadvantages. A business must analyze whether the advantages are more beneficial than the occurrences of the disadvantages to determine weather or not to become a PLC.
Some businesses would use a process of weighing up the advantages from disadvantages called a SWOT analysis. This assesses the Strengths against Weaknesses and Opportunities against the Threats. There are many aspects that contribute to these criteria. The strengths and weakness opportunities and threats when weighed up give an idea of weather it would be beneficial for a company to float it shares on the stock market. In purchasing shares of a company the owner of the shares is entitled to a percent of the profit that the business makes (dividend).
Due to this less profit is available to expand the business and use where it would be beneficial in contributing to raise the rate and amount of profit possible. In becoming a PLC the Company has to be registered at company house so everyone can find out about them and awareness is raised. Also in becoming a PLC the company has to agree that it will publish its accounts annually open to anyone who wishes to access them. Along with this it must produce a detailed prospectus giving information about the company i. e. its activities and speculations.
This means that competition would be able to see what you propose, how your accounts are and what you speculate for the future, in this they could steal business or proposed sales directions. In being a PLC other people from outside the business who purchase shares will be gaining ownership, this means a possible loss of control. The owners are the shareholders but this does not make them managers. The managers and shareholders may not see eye to eye and opinions may clash as owners do have say, this can cause problems.
An example of this would be that if the shareholders wanted to receive a higher percent of the profit in the form of dividends yet the managers wanted to keep it for investments. If over 51% of shares are sold it is then that the company will loose control and the greatest shareholder will then have control over the company. The more shares a person owns the more control they have and this means that the company would loose control. In this the companies communications would suffer and the company would become harder to motivate and communication would decrease.
Shares are sold to raise share capital money; this could be used for vital expansion in order that the company to take a new route in business or gain capital it needs to ever have a chance of making a break. In selling shares it means that the business has limited liability, meaning that they can not loose any more money than that invested. This is very important as it means that the owner(s) will never loose personal belongings if the company suffers.
If a company is going to float shares on the stock market they must value a minimum value of i??50,000. Being a PLC can increase reputation as PLC is considered to be larger companies that are highly profitable and run an efficient operation. A good reputation builds on customer loyalty and insures that it is a well-known name and for this reason is trusted and will attract custom. The advantages listed may be of a smaller amount but they by far suggest that it would be beneficial for the business to become a PLC. The main reason in my opinion is because it guarantees unlimited liability, which from the point of the owner is very important.
If the business suffers and is faced with liquidation there is no way that the owner would wish to also loose the rest of their life’s belongings to cover debts the business cannot cover. The other main benefit it that it raises capital that the business may need in order to greatly expands on its situation so that it can be a lot better and productive. The main disadvantage is the possibility of loosing control to shareholders. This is a possibility but at the end of the day both parties want the profits to increase and the business managers have the businesses best interest at heart.
This is a small aspect when compared to the benefits of having capital and limited liability as long as over 51% of the shares are sold on the stock market as this would mean control was lost. Every business has different functional areas incorporated inside it. This is so that in each functional area the tasks can be carried out accurately and to a high standard by trained staff in that field. This will help the business to reach targets, satisfy consumers and remain competitive. The main functions of a business include HRM (Human Resource Management) Marketing Finance Administration.