What are the financial, and strategic issues associated with this case? What are the effects on likely competitive response? (Think clearly about the assumptions that you are making and highlight them...

Company –
Boots is best known for the Hair care and retail segment operating stores all over the United Kingdom. They do manufacture haircare, beauty and health products majorly a mass market
and, has diversified into the Pharmacy business too. It employees 75,000 people all across the world as on 2004. ‘Boots for men’ stores and internet services were launched in the 1999. Apart from the promotional tactics, Boots engages into cele
ity’s promotion where for each sale of bottle, the endorsed cele
ity gets some royalty.
Competitive advantages –
Control over the entire value chain – In order to ensure that the entire control over the value chain ba
ing the inbound logistics. They operate their own retails stores. Apart from this, the firm has also engaged into significant diversification by manufacturing its own analgesic that is Ibuprofen. As we can see in the Exhibit-5 , the Boots operate their own stores and they sell the products of their own
ands in the stores. Hence, the profit margins are very high on the in-house
ands.
Lack of technology – Due to lack of technology other firms would not be able to replicate the 3 for 2 offer where the lowest priced product is free with the two other products.
Price comparison –
As we can observe in the exhibit – 6, the
ands from the Boots which are available at multiple price points, they have been all over the spectrum or different product categories and segments as compared to the competitors. The competitors, L’Oreal and the Pantene not been present across the multiple categories. As we can observe that Pantene is only present in the Hair gel segment.
Objective –
Boots in a very highly competitive market of Hair Care is planning to increase its market share by means of one or another option which would achieve a significant jump in the sales based on their forecasts. At the same time they want to increase the revenue per customer in the changing preferences market and also want to ensure that their
and equity is not diluted due to the increase in the sales due to deep discounts.
Challenges –
Boots are trying to increase the market share in a very highly fragmented market of the United Kingdom where no firm, in the haircare segment. No
and of any firm has been able to maintain a market share of more than 10%. In the market where the consumers were not
and loyal, increasing the market share via the means of the discounts and ensuring that the market share remains constant and does not decline is a significant challenge that the firm is facing. As a part to increase the market share, the firm has been evaluating three options and deciding on which one to choose. As far as the strategic issue is concerned, top management wants to ensure that the
and equity of the Boots does not get diluted due to engaging into the deep discounts.
Market –
In the 90’s the consumer market comprised of the Pantene-Pro V , Alberto VO-5 and Head and Shoulders. More than 60
ands were present in the market at that point in the 2000’s.
In the hair care market, there is a lot of competition and the market is significantly fragmented. No
and in the market has a market share of more than 9% share. The key competitors to the Boots are Proctor and Gamble – a mass market
and, L’Oréal, and Alberto- Culver. As far as the retailers
The market is very fragmented due to the consumer belief that the changing the shampoo
ands increases the quality of the hair. Also, if we analyse the trends over the long term it is observed that the consumers have been changing preference over the longer time horizon. For example, in the 70s that consumers...