Introduction
A strategy "is produced by a concern of the resources of the organisation with regards to its environment, the excellent purpose being to add value" Dobson (2004). According to Stredwick (2008), "Strategic research can be involved with the strategic position of the organisation". It contains the organisation's ideals, culture, resources and its own environment. It tackles the following questions: what exactly are the main element characteristics of the organisation, what changes are going on in the surroundings, and how will these influence the organisation and its activities. Furthermore, a detailed inner and external environmental analysis including an diagnosis of culture allows the organisation to make a tactical choice and also help in the strategic execution.
Therefore, the survey will use different tools such as SWOT (Strengths, Weaknesses, Opportunities and Risks) analysis in relation to Michael Porter five pushes analysis to emphasize where B&Q (UK) is, and the environment it manages in, is strategically and where maybe it's in the future and the nature of competition. It talks about inside factors, the strengths and weaknesses of B&Q, and external factors, the opportunities and hazards facing the business. Besides, PESTLE (Political, Economic, Socio-cultural, Technological, Legal and Environmental) research is another tool to be used to analyse the macro exterior environment. Johnson (1992) Social web may also be used for the evaluation of B&Q culture.
B&Q was the first national DIY retailer and has been around the DIY business for more than 30 years. Richard Stop and David Quayle (B&Q) wished to bring value, much longer opening time and a broader product range to everyone. Inside the 1980s it bought the Scottish DIY string Dodge City and eventually became part of the Kingfisher Group. Today, B&Q is the UK's leading DIY and garden centre merchant and its stores offer around 40, 000 inspirational home improvement and garden products for the homemaker, periodic to serious DIY and trade experts.
Strengths, Weaknesses, Opportunities & Dangers (SWOT) analysis is an instrument of environmental scanning targeted at analysing both the internal (strengths and weaknesses) and exterior environment (i. e. opportunities and threats) to see if the company can seize new opportunities given its advantages and face new threats despite its weaknesses. Thus, a SWOT evaluation is a well-rounded research which moves well beyond the internal environment.
Strengths
Leading brand and good reputation
B&Q is the main leading brand in the UK and is twice the size of its competitor. It includes market size of 31bn as regard to how big is repair, maintenance and improvement market. Being the number one position in the UK market, B&Q has a major strength as they are before their competitors. Furthermore, B&Q's reputation is strong and popular which means people notice with respect and believe in it, for example, B&Q is supporting Prince Charles in his "Preserve the Rainforest".
Increased market share
B&Q has a market share of 14% where it uses 22, 602 employees and has 321 stores in the UK (http://www. kingfisher. co. uk/index. asp?pageid=33 seen [19/10/10]. Thus, B&Q will continue to grow in the home improvement and garden sector. Their increased market talk about is an integral with their success as it increases reputation, earnings and the value of the organisation.
Constantly creating new, differentiated, Progressive and wide range of Products
B&Q offer around 40, 000 products to get. B&Q also offers its strong own-label such as B&Q car boot protector, B&Q Feet pump and so forth. B&Q has innovative, well displayed products and they're also continuing with their renewal programme which includes updating product ranges such as launching their first fair-trade products and making more eco-products.
Thus, B&Q's innovation keeps it a front-runner in the home improvement and garden centre as it is regularly re-launching and designing new products. Hence, having a product differentiation strategy makes B&Q at an improved competitive gain.
Sites
B&Q has the right positions and new opening opportunities. B&Q has 321 stores in the UK. In addition they encourage more eco stores such as their eco flagship store is found in New Malden and provides innovative developments such as 108 underground bore holes, 100 metres deep which temperature and cool the store with energy from the earth. In addition, for the first year 2010/11 half progress, three large and 1 medium stores revamp (kingfisher strategy improvement, March 2010). Thus, this is a strength which shows the overall performance of the B&Q.
Adding value to the organisation
Adopting Michael Porter (1985) value string strategy through all its major and encouraging activities, B&Q 'Delivering Value' programme of self-help initiatives is working well, meaning now it creates significantly higher gains and cashflow from its functions and a much better go back on capital because of its shareholders [www. kingfisher. com].
Technological strengths
B&Q have embraced technological growth in their business. For instance, it has their own website where customers can shop on line namely, www. diy. com, thus facilitating e-commerce. Furthermore, B&Q intranet facility also helps in enhancing its inner communication system where insurance policy and types of procedures of the company can be reached to all employees. Furthermore, on the 4th august 2010, B&Q has launched its first iDIY APPS which makes it easier for customers to 'get the work done' insurance agencies B&Q experts available for them whenever needed. It really is new at apple store and free to download for I telephone and I pad users. Moreover, a variety of green solutions have incorporated into new stores at B&Q.
Good customer romantic relationship management
More than three million customers come at B&Q (UK) entrance doors every week. Thus, B&Q comes with an extensive customer bottom part, which really is a major strength regarding sales and profit. Besides, B&Q preserve their customers by giving them the chance to create, design their own product regarding to their preference. B&Q offer different kinds of discount for regular shoppers which also assist in customer retention such as the diamond card that offer ten percent10 % discount off to the over 60's every Wednesday off selected acquisitions or products, Trade Discount Card which offers special discounts for trade customers and Corporate and business Gift Cards which receive discounts for bulk spending.
Effective Human Source of information Practices
B&Q has been given again for the fourth year working the Gallup best place of work award. Besides, on the 22nd June 2010, B&Q UK also scoops the very best award at institute of inner communications [www. kingfisher. com]. B&Q UK is also accepted for its constant emphasis on employee trained in order to improve customer satisfaction. For instance, 15 500 employees of B&Q UK have completed a Retail Skills Level 2 NVQ or DO-IT-YOURSELF Knowledge Qualification honored by City & Guilds.
B&Q has an extremely experienced workforce which drives the organisation with knowledge and skills. In general, we can therefore comment that B&Q UK focus on the "soft" aspect of human resource management. They invest in people through good communications, teaming and training.
A participative management style
B&Q has an organic and natural or flatter organisational framework which reflects its culture. Employees are empowered and have freedom of expressing new ideas. Thus, B&Q unlocks the potential of its employees. At B&Q, they have been occupied laying the foundations for future growth. For example, they lately launched a Dragons' Den-style panel to help them filter new progressive and strategies from staff which is called the Creativity Den. This, therefore, motivates a culture of entrepreneurship and empowerment.
Financial resources
B&Q has increased their financial performance; this is proved by the main element performance indicators such as the operating margin which includes increased from 2. 8% in 08/09 to 4. 9% in 09/10. Thus, the rigorous focus on producing improved cashflow from operations, lowering the investment in working capital, whilst tensing control buttons over capital costs, has yielded a significant decrease in financial net debt [www. kingfisher. com ]
Effective misuse and recycling management
Reducing waste help to improve efficiency of company, thus, up to now B&Q has 48 % less carbon emitted from waste material. They have tried out to manage their creation in a systematic way through the use of technology. They encourage customers to come back old products and presentation for recycling.
Low threat of new entry (one element of Porter's five forces analysis)
Being the market leader, having a market size of 31bn, focusing on product differentiation; economies of scale; having cost advantages; having high capital requirements and being part of kingfisher, the third largest do-it-yourself retailer on the planet, B&Q, has low risk of new challengers.
Bargaining power of suppliers: one element of Porter's five makes analysis
B&Q maintain strong marriage using their suppliers, for case, ensuring that their suppliers supply them with eco-friendly products. Thus, the bargaining vitality of their suppliers is low, making B&Q getting a competitive benefit.
Weaknesses
As per kingfisher business review, august 2010, B&Q like to like sales has increased on seasonal products such as garden products; however, one weakness will be that sales of garden product will be reduced due to winter weather that may discourage customers to invest in their gardens.
B&Q website, diy. com, has a poor e-commerce ratings as these were ranked underlying part overall, with customer scans of 50%. In addition, the site received only two legend ratings for price and product out of five personalities. Furthermore, there is also delivery issues; from over presentation and delays to time slots which ultimately shows how B&Q is squandering both its time and resources and also discloses their incapability to modify quickly to change.
Opportunities
B&Q is to extend its offer into the trade market, with the triumphant trial of Trade Point stores in nine of its large UK branches.
As customer tastes keep changing, for example many people prefer to use eco-friendly products, thus a chance is to broaden B&Q's customer by offering several trials of new or extended product categories.
Thus, this will increase the product/service lines by B&Q that could help them to raise sales and increase their product portfolio. Furthermore, products that are cash generators and are at the maturity stage on the product life cycle can fund the rising superstar at the progress stage and even the question draw that are at the introduction phase.
To open up more eco-stores, thus, interacting with the company's aim of being a lasting business.
Integrate advanced ICT (information communication technology) running a business process to improve efficiency and effectiveness such as having an ERP (Organization Source of information Planning) system.
Reinforce its web site design to facilitate performance e-commerce.
Redesigned and reduced how big is packaging on a number of lamps products, removing significant amounts of plastic material and polystyrene. This will help in handling waste material appropriately.
Further international growth. B&Q has several stores in the united kingdom and Ireland. In addition, it works in china.
B&Q has lots of highly skilled staff, which can be an opportunity for them to explore as skills of their employees can help B &Q to bring the business forward.
Threats
Industry Rivalry (one component of Porter five forces analysis)
Focus (DIY) Limited; Wickes and Homebase Small are the top UK industry rivalry. Homebase limited is the next market head in do-it-yourself and garden centre store in the united kingdom.
Homebase using its sister company Argos (750 stores) booming speedily, shows a registered sales number of 1. 57 billion 2009/10 and profit margin was 41. 2 million 2009/10 (www. homebase. co. uk). Although, B&Q are going to open some Trade points, Homebase has already a robust supply chain collaboration with Argos. Being the first someone to introduce loyalty cards, Homebase have an edge in keeping customers. Homebase allow customers to gather and redeem nectar factors. Even B&Q has something of finalizing nectar things, but this is available only on their website, even though, details are spent, not collected. Furthermore, Homebase is also recognised for choice, style and customer service over the wider home augmentation market.
In addition, based on the Observer (31st Oct 2010, by Zoo Real wood), experts verdict mentioned that Homebase is likely to buy Concentration (DIY) limited, if the acquisition is confirmed, B&Q would be facing big competitive challenges, and could even lose its number one market position in the UK. Thus, the nature of competition where B&Q performs is fierce.
For example, during the recession, many customers buying behaviour style changes, probably, they will not spend money in do-it-yourself or garden products. In addition, wallpapers colour paint can be changed in line with the colour fashion pattern.
For example, in the united kingdom, sales declined by 2. 6% to 4. 3bn in March 2009, as the recession struck consumers changing their homes. Furthermore, Kingfisher declare that UK do-it-yourself market has fallen down that may not only influence the sales, but will also influence the company's profitability and performance. http://news. bbc. co. uk/1/hi/business/7965018. stm reached [19/10/10].
Ultimately, when advantages, weaknesses, opportunities and threats are identified, B&Q implement the three strategies that can be produced: a) coordinating strategies: match strengths with opportunities; b) change strategies: converting threats into opportunities and/or weaknesses into talents; c) creative strategies: they can be creative and try to identify hidden strengths.
PESTLE (Politics, Economic, Social, Technological, legal issues and Environmental) analysis is employed as an instrument to analyse the exterior macro environment. It deals with those six factors that affect the company. Although the items in a PESTLE analysis rely on earlier situations and experience, the analysis can be used as a forecast of the future. Besides, Kotler (1998) remarks that PESTLE analysis is a good proper tool for understanding market development or decline, business position, prospective and route for operations
Political Factors
Employment legislation
According to Balchin (1994), "For career legislations, the government supports retailers to give a mixture of job opportunities from adaptable, lower-paid and locally-based jobs to highly-skilled, higher-paid and centrally-located jobs".
B&Q has a versatile labor force of 60%; B&Q does provide work with a diverse of individuals, such as students; people aged 45 plus; and under 25. In addition, increasing the retirement age up to 66 season old by 2020 will make B&Q to review its HR procedures to formulate new strategies.
However, B&Q has wanted to the federal government and European Fee to reduce the VAT to 5% on energy saving products to make it affordable to all www. diy. com.
For example, B&Q is supporting the Government Unveiling of the 'Green Loan' Pilot Plan where B&Q is partnering the London Borough of Sutton in an test of the government's new (Pays off) Pay because you Save System www. crp-news. com. Besides, B&Q is aiding the government to provide security equipment at fair prices so when affordable as it can be to secure 45, 000 homes. Government also offers B&Q with vouchers to help in preventing burglary (Nationwide Security). Thus, possessing a good marriage with the government may help B&Q in the future, such as having taxes breaks, good public relations and fortify their reputation.
Economic Factors
One of the most significant factors of the market is high unemployment levels that have mainly increased because of the recession. The recession leading to an increase in unemployment has reduced the effective demand for many goods, adversely affecting the demand required to produce such goods. For instance, in 2008 the UK do-it-yourself market dropped by around 4% as the economical environment worsened, impacting consumer spending. B&Q was terribly affected by the poor housing market, which may have made them focus on different marketing strategies of how to build; retain or find the customers.
This really shows the contribution B&Q has made to boost the overall economy by producing its product within the country's boundary. A positive GDP also suggests an avenue for economical growth which contributes to higher living standards and greater success for individuals. It also supports businesses to be profitable, which creates career and income.
Therefore, the economy will probably experience comes in intake and investment.
Social Factors
Shifts in prices, culture and lifestyle
Norms, prices and paradigms form the socio-cultural environment. They have impact on corporate strategies. For instance, there's been a switch of lifestyle where nowadays people tend to be concerned of the surroundings issues occurring, such as the 'Green House Effect', the widening distance of the ozone layer, and so on, thus, they may be more susceptible to take in eco-friendly products which help in retaining a sustainable environment.
Thus, to adapt with this socio-cultural shift, has forced B&Q into the 'being sensible' to the environment and support honest behaviour. For example, they may have designed new eco products and wide open new eco stores by using renewable technology, such as Goal environmental management system. In addition, B&Q communal responsibility which can indicate after its culture, are divided into four section: Their diversity strategy (value of esteem for folks), Environmental impact (life pattern and make up of products); Moral (how and where to buy our products) and Community (their 'better neighbourhood way).
Demographic changes
Demographic changes such as the ageing populace and a rise in female personnel have made B&Q to review its employment plan, for example, this made them focus on benefits wanted to older workforce.
In addition, having an ageing population has also inspired B&Q in producing different marketing ways of retain aged customers like the diamond discount cards which offer 10 % discount off to the over 60's.
Source:
Hogarth, T. and Michael C. Barth (1991)
Moreover, young families are nowadays having fewer children, and having an ageing populace, will lead to a shortage of skilled labours in the market. Thus, this got resulted in the recent intro of legislations such as the business owners' visa, point-based systems and working visa. Therefore, B&Q should recognized these changes and review its job policy appropriately.
Education
In order to promote children skills, B&Q has launched its countrywide job done initiative by educating children DIY skills as a curriculum for the future. In addition, to teach men and women about the use of DIY tools, B&Q has created its IDIY apps.
Technological Factors
Technology is a major micro environmental factor which includes influenced the development of B&Q products and services. The new technologies benefit both customers and the company: "customer satisfaction increases as products are plentiful, services may become more personalised and shopping more convenient" (Data keep an eye on Report, 2003). B&Q utilises the next technologies:
New traffic monitoring technology: B&Q is using TaqMan operation campaign technology
Decorating credit card technology
Variety use of low carbon systems including solar power panels and floor source warmth pumps for New Malden eco store. And, in the foreseeable future, solar system can be utilized in most homes as an alternative for gas and electric heating.
B&Q became a member of SEDEX- a web-based system that delivers a membership established data exchange where it offers them with greater visibility at all levels of their supply string.
Legal Factors
Many authorities legislations and guidelines have a direct influence on the performance of B&Q. For example, Kingfisher retail table ensures that B&Q choose the code of practice to ensure ethical business techniques among its employees, suppliers, companies and investors. For instance, B&Q comes with an anti-bribery and problem policies and strategies in the light of the new UK Bribery Work 2010. The life of powerful competitors with reputable brands produces a risk of powerful price wars and sturdy requirements for product differentiation. "The government's insurance policies for monopoly control buttons and reduced amount of buyers' ability can limit access to this sector with such control buttons as permit requirements and limitations on access to raw materials" (Mintel Survey, 2004; Myers, 2004). Thus to device politically right pricing plans, B&Q set affordable charges for its products.
Environmental Factors
In 2003, there has been increased pressure on many companies and professionals to discover their responsibility to world, and act in a way which benefits society overall (Lindgreen and Hingley, 2003). Thus, in 2008, B&Q authorized a three season partnership with BioRegional to move towards becoming a One Planet Living business in order to lessen its impact on the world's resources. B&Q is honored chain-of-custody certification for both Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Official certification schemes (PEFC).
In addition, Graiser and Scott (2004) state that in "2003 the federal government has planned to introduce a new strategy for lasting consumption and creation to minimise waste materials reduce utilization of resources and minimise environmental damage".
Thus, it has forced B&Q in growing strategies such as making use of a new dealer way of measuring system call QUality-Ethics-SafeTy (QUEST) to ensure that the inexperienced policy is reputed relating to the sustainability criteria.
However, B&Q dedication is that they will 'pressure' all timber products to be source authorized, and also developed enforcing rules to activate its environmental campaign on suppliers. In this particular scenario, question can be asked about ability relations between B&Q and suppliers: could others do what B&Q does? Do B&Q have very much electricity which it keeps over its supply base? Corresponding to New (2003), he declares that B&Q doesn't have that capacity to change the way the supplier performs as "green purchasing regulations would range between companies context".
According to CWL Hill & G R Jones (2001), an organisational culture is "the specific collection of worth and norms that are distributed by people and groupings in an organisation and this control just how they connect to each other and with stakeholders outside the organisation".
Cultural 'Onion'
What is right and proper?
What the organisation should seek to attain?
The basic assumptions of the group
The way we do things around hereCulture can be compared to an onion with three layers.
Figure : Cultural Onion; source: Trompenaars & Hampden-Turner (1997)
Cultural Web
One of the most commonly used means of making sense of the organisation's culture is to use the ethnical web (Johnson, 1992). It is a schematic representation of the components of an organisation's culture so that we can easily see how each factor affects the paradigm. The cultural web theory is also a good research for management as it represents the fundamental assumptions related to politics, symbolic and structural aspect of the company.
Figure : cultural web. Source: Johnson (1992)
Cultural web theory application is a powerful tool in evaluating the ethnical environment for B&Q. As talk about before, the cultural 'onion' contains layers of norms, ideals, and paradigm as well as the ways of conducting business within and outside the company. Hence, the idea of ethnic web is the demo of these actions taken for granted for focusing on how they relate and influence the strategy (Veliyath and Fitzgerald, 2000; Johnson and Scholes, 2003). Additionally it is used to bridge the gap between real and desired culture through adaption of future strategies.
Culture can be analyzed through the interpretations of how the company behaves, including, rituals, stories, structures, exercises and systems. This shows the "clues" about the taken-for-granted assumptions (Paradigm).
B&Q has an extremely friendly, welcoming and assisting strategy in the routine ways that shows how staffs react towards one another, and towards those beyond your company that can constitute the way people do things.
The control systems and measurements are regularly under the management review to show the competence of the staff and bosses' decisions. For example, control systems on its quality of service, its strong environmental supply string system, and the behavioural control of its staffs insurance agencies a good HR coverage.
The rituals of the organisation's life are, corporate and business gatherings, the special occurrences which B&Q strains what is generally important and reinforce just how things are done.
Symbols stand for different essentials such as Titles, Logos, uniforms or the sort of terminology and expressions widely used which becomes a shorthand image of the nature of the organization. B&Q has recently a recognised attention catching Orange coloring as its logo as well as its uniforms. The brand and the logo signify a lot to people outside and inside the organisation. Nevertheless, B&Q is recognized for using similar orange shade logo design and store design from the American giant DIY dealer, Home Depot, thus, the question is how impressive and unique is B&Q as respect to its logo design and brand placement? What will eventually B&Q if Home Depot makes UK market?
Power Structures will be the key assumptions that contribute to the paradigm and are likely to be made by the most powerful management groupings in the company. And, for B&Q, its power relies in the environmental and ethics team, how to make people more focused on the environment and as well as to develop their central values.
Continuous meetings and communication at every degree of the organisation's hierarchy indicate a strong inside environment and a set (organic) organisational composition.
Conclusion
The report includes an in depth environmental research of B&Q including an evaluation of culture. B&Q got adopted influential identities by causing their DIY model into a pathogen and outlaying it out in to the culture via a range of stations: social sponsorship, consumer experience, political controversy, and brand extensions.
The report has used mainly SWOT and PESTLE to perform the environmental examination. Although they are powerful tool for evaluation, they do involve some limitations. For instance, they are only good for the person who helps it be. For instance, in SWOT analysis strength is seen as a weakness by someone else. Thus, it lacks of validity and trustworthiness. However, conducting an environmental evaluation will formulate generic strategies for the company to truly have a competitive benefits.
Furthermore, the industry life circuit may also be seen as an extension of PESTLE research as it is a means of exhibiting how certain PESTLE factors effect the introduction of an industry with time. For example, it was the changes of PESTLE factors that caused B&Q to go from progress to maturity and again.
Besides, anticipated to a energetic environment, strategy formulation should be viewed as a path to ongoing learning. The excellence of a developed strategy and the speed of its execution will hence rely upon the quality of B&Q's intellectual and behavioural learning functions.
