Ashim Chakraborty, ID No :000570139

Ashim Chakraborty, ID No :000570139

SWOT analysis and explanation of CSR strategy and its implementation with critical evaluation and recommendation. Company : B&Q Plc.

Content of this paper 1. Introduction & company details 2. SWOT analysis as a generic strategy for B&Q What is SWOT analysis Why SWOT analysis

Page 3 4 4 5 7 8 11

3. SWOT analysis of B&Q 4. Explanation of Corporate Social Responsibility policy of B&Q. 5. B&Q's performance towards CSR business strategy

6. Critical evaluation, Knowledge application and recommendation regarding generic strategy SWOT analysis. 15

7. Critical evaluation, Knowledge application and recommendation regarding CSR strategy 8. References 16 18

Ashim Chakraborty, ID No :000570139

Introduction & Company details

In this current competitive global business arena, in order to increase the degree of output in business, implementation of appropriate strategy and transformation is one of the key concerns. B&Q is a successful leading DIY (Do it yourself) and home improvement retailer and manufacturer in UK is a pioneer national DIY concept provider, founded in March 1969 in Southampton. The name of two founders of B&Q is Richard block and David Qualye, and current CEO is Euan Sutherland. Initially the name of this company was Block and Qualye but soon it had been shortened to B&Q (B&Q, 2010).

This retail DIY business had approached to the global market by starting up their first international branch in Taiwan in 1996. It is a significant part of the largest retail group Kingfisher plc, which is member of the London Stock Exchange. Regarding the market share, brand value and customer service The Verdict Research report (2009) ranks B&Q as UKs top DIY retailer of both 2008 and 2009. Queenss award for enterprise (2001) as an acknowledgment of exceptional accomplishment in sustainable development, B&Q has awarded the queens award in 2001 and they has also rewarded by retail week on Corporate & social responsibility section in 2004 and 2007 B&Q(2010). Through the statistical data available on B&Q website, B&Q continuing their business with 331 UK stores, 9 in Republic of Ireland, 63 in China and 21 stores in Taiwan. Approximately 39000 employees among all UK branches along with about 40,000 of products are serving approximately three million B&Q customers weekly, consequently company have been acquired the 3.8 billion revenue where as net profit 106.0 million by the year 2008/2009(Kingfisher, 2009).

In the competitive and growing retail market companies are always facing a large number of existing and emerging competitors; to provide the better customer service and to increase the

Ashim Chakraborty, ID No :000570139 production quality and retain with existing customer B&Q requires implementing a best fit strategy among all section along with marketing, management, supply chain, CSR, FDI etc.

CEO : Euan Sutherland.

SWOT analysis as a generic strategy for B&Q

What is swot analysis?

In this paper, as a generic strategy of B&Q, SWOT analysis has been chosen. SWOT analysis is a short form for Strengths, Weaknesses, Opportunities and Threats is a strategic improvement instrument. To identify the reason behind the failure of corporate planning Albert Humphrey have created the SWOT analysis technique in the 1960s and 1970s through a study at Stanford University. It is a combination of companys external and internal issues where strength and weakness is internal issue and opportunity and threat is an external issue. Figure 1

External and internal features of SWOT adopted from RAPIDBI(2010)

According to Ferrel & Hartline (2008) SWOT analysis is include both the internal and external environment of the firm, the internal features strength and weakness is correlated with

Ashim Chakraborty, ID No :000570139 organisations financials performances and resources, Human resources, production line capability, market share, customer perception, product quality and availability and organisational behaviour. Oppositely the external environments are related with economic condition, customer trend, technology, governments provision and competitors.

Why SWOT analysis:

SWOT Analysis is a one of the major section of Strategic Development for any organisation. It reflects the implementation and responses instantly. Established companys build up their strengths, recognize their weaknesses and defend internal issues and external threats. Moreover they also evaluate their overall business environment and spot through the critics view and develop new features and technology quicker than competitor. In this point of view Pahl & Richter (2007) emphasized that the SWOT analysis is the magnificent tools for decision making and realizing the relation between company and its environment. It sets a strategic structure to navigate the company along with its versatile application, for example business planning, strategic planning, strategic marketing planning, competitor evolution, business and product development and research and development.

SWOT analysis contributes to balance optimism and practicality, and attain a balanced perception of companys internal issues strengths and weaknesses and external issues opportunities and threats on the way to build up an effective and efficient strategy. David (2006) Through the SWOT analysis any organisation can achieve the perceptual equilibrium about internal and external issues and be aware of

1. Internal Strength: Organisations competencies, corporate ability, and assets. 2. Internal weakness: Organisations most critical area which management should restructure and repair or keep secret from rivals. 3. External Opportunity: Organisations benefits which are expect to achieve through the organisational goal. 4. External Threats: The drawbacks and the risks, the predicted expectations and discrepancy. 5

Ashim Chakraborty, ID No :000570139 Figure 2

SWOT analysis as a balance perspective, Adopted from 1000venture.com (2010) Strategic management have not transformed from its early commencement, SWOT analysis serving the basic procedure to structuring the organisations strategy (see Figure 2). The fundamental principle in this concept is to relate the organisations individual competencies, capabilities and possessions with the market in order to create a best fit correlation between the organisation and the external atmosphere and build up a sustainable competitive advantage (Miles and Snow, 1984). Figure 3.

The traditional strategic management process adopted from (Sherman, Rowley and Armandi, 2007: p166). 6

Ashim Chakraborty, ID No :000570139

SWOT analysis of B&Q

Strengths
B&Qs business model, the main of its features in the home improvement manufacturing has revolutionized the approach customers buy for home improvement products. Internationally recognised brand name and higher range of quality products along with competitive price. Competence to grow, B&Q have been started their business at 1969 through one store in Southampton, and after 50 years today they are the market leader European DIY retailer along with 331 stores in GB and 85 international B&Q store. In addition they also acquired the leading DIY retailer NOMI and Castorama in Poland and French respectively (Kingfisher, 2003). B&Qs skilled employees are NVQ & HIKQ (retail) trained by City and Guilds besides their general education. Have high engagement, recognition and respect for own people (employees) B&Q (2010). Environmental friendly approach and One Planet home programme is a great strength of B&Q. Sustainable development and social responsibility, which assured the resources utilized by B&Q today do not effect the wellbeing of next generations or the supply of that reserve in the future(B&Q, 2010) Better neighbourhood approach which force B&Qs activities in and around their stores and among the neighbourhood in which they operate. A higher number of customer including DIY and professionals along with customer satisfaction. Spread over International market with collaboration in local company. Effective Online store along with free delivery and reserve and collect. Higher level of brand value, customer satisfaction results a huge turnover and market share for example 3.9 billion revenue where as net profit 162.9 million by the year 2007 and current share price is 233.0p (Kingfisher, 2009). 7

Ashim Chakraborty, ID No :000570139

Weakness
Vulnerable to slowing down UK housing market, Economic affliction (retail specific) Although an international brand name but a higher level of dependence on EU markets with more of the stores located in Europe and the balance across East Asia. Costly supply chain because of distance and cost of fuel. Product recalls for example B&Q (2010) announced that even though careful quality control process, it has been noticed that an unfortunate manufacturing fault makes the Indoor 50 Marble Lights hazardous for us

Opportunity
Opportunity to be sustainable in economic turbulent time because the business have foothold in international market. Opportunity to create brand association with other environmental friendly international

organisations. Opportunity to accelerate the expansion strategy. Strategic alliance and collaboration. Opportunity to extend international stores including US market.

Threat
Emerging and existing Big Fish competitors for example US company Home Depot (emerging), or Wicks, Home base (existing). Unfortunate Recession and economic downtown might be a big threat for B&Q. Loss of sustainable competitive advantage for price war, for example down trend of Like-forlike sale or price match. According to Finch & Kollewe(2008) Like-for-like sales at B&Q went down 8.1% in the quarter to May 3 2008. Upward trend of cost in supply chain.

Explanation of Corporate Social Responsibility policy of B&Q.

In order to explain a business strategy, this paper have chosen the CSR policy of B&Q because

Ashim Chakraborty, ID No :000570139 the key concept of the significance of CSR is not only the maximize the shareholders wealth but also add the value to the primary stakeholders including customers, suppliers, employees, creditors, and the public stakeholders group(CIMA,2009). At B&Q, they have and are dedicated to developing the principles of CSR into their business practice, meeting their legal requirement and to being the consumers choice for sustainable home improvement products and services. Through the sustainable development, B&Q assured the resources utilized by them today do not affect the wellbeing of next generations or the supply of that reserve in the future, which is accelerating their CSR vision To improve the quality of life of all the people our business touches consequently B&Q achieved honourable Queens award at 2004 and 2007 in CSR category (B&Q, 2010). Aim of CSR strategy of B&Q (2010) has divided their strategy in four different sections which are:

Figure 4

Environment

Diversity

Ethical

Community

Adopted by author from B&Qs annual CSR review B&Q (2010) Diversity: B&Q is adopting Diversity Strategy which is dedicated to the value of Dignity and Respect for customers, suppliers and employees.

Environment: This section concentrates with ecological impact, life cycle and make up of their products. It also concern with the effect of business operations, such as waste management, energy and Carbon emissions, Greener supply chain. 9

Ashim Chakraborty, ID No :000570139

Ethical: B&Qs Ethical section associated with many issues, suppose how and where we receiving our delivery or manufacturing products from different parts of the world, not only about the process of manufacturing or supplying, but also about the wellbeing of the people who involve to craft them. This step is the key to how B&Q can create better neighbourhood with the people they attach all over the world.

Community: 'Better Neighbour' movement of B&Q represents their activity in and around their stores and within the communities in which they operate.

Among the all areas from four section of CSR policy B&Qs CEO, Sutherland (2009) emphasised seven main areas of influence which are

1. Products and Services Considering sustainability concerns in all types of products and services. 2. Stores and Operations Guarantee to minimise the environmental impact of each B&Q stores and operations. 3. Customers Establishing the easy way for customers to create more sustainable homes. 4. People Involving all employees as a expert of sustainability respecting and supporting the diversity of our stakeholders cultures and lifestyles. 5. Community Creating an excellent neighbourhood with the people who attach with us from all over the world. 6. Suppliers and Partners Work with suppliers who share B&Qs commitments and connect with their suppliers and other stakeholders to find common solutions to sustainability challenges. 7. Economic Growth Using CSR strategy to create value for their own business.

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Ashim Chakraborty, ID No :000570139

B&Q's performance towards CSR business strategy

B&Q (2010) has specified 12 major trends in community which will result in how the organisation runs business.

Through the numerous processes that organisation can take step to the concerns specified by the 12 tendencies, which have formed a four step ladder to help to make decision and gauge development.

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Ashim Chakraborty, ID No :000570139 Figure 5.

Four rugs ladder format adopted from the corporate social responsibility summery report 2003 Kingfisher (2003)

In order to develop the suppliers environmental integrity on their supply chain, primarily B&Q setup a programme known as QUEST (QUality, Ethics and SafeTy) along with 10 major principles. By means of the performance towards this principle, suppliers are rewarded from A to E grades. Afterwards, QUEST programme has been extended and is implemented in each B&Q stores, concentrating environmental and waste minimisation, staff awareness, energy efficiency and community interaction. To measuring the stores Performance, Company has been set by a star rating. About 97% of B&Q stores operating with five star rating B&Q (2010).

As a part of implementing the CSR strategy, by the 2003 B&Q have been taken a great initiative to train all employees to understand their responsibility and how they can contribute towards establishing companys CSR policy. An online learning curriculum has been established that all employees have to complete. DIVERSITY: Through their diversity policy, B&Q working along with Governments WORKSTEP programme which aimed to create job opportunity for disabled people besides 12

Ashim Chakraborty, ID No :000570139 non-disabled people to inspire them to attain their full capability, and to penetrate mainstream employment.

Adopted from the corporate social responsibility summery report Kingfisher (2003)

B&Qs have established an online recruitment process which justifies talent and best fit to companys requirement and organisational behaviour without any bias regarding age, gender, ethnic origin or disability. Regarding the age issue 25% of employees in B&Q are over 50 years and their oldest employee is 95 years old (B&Q, 2010). Environment: From the environmental concern, B&Q noticed that current rate of consuming worlds natural resources is quicker then the process of replenishment. Through this responsibility B&Q operating some activities

Adopted from the corporate social responsibility summery report Kingfisher (2003) One planet Home: Working with well-known environmental charity Bio-Regional's global One Planet Living programme. According to this programme B&Q selling a large range of One Planet Home accredited products which will perform to save energy, save water, conserve nature, recycle, grow your own and healthy home. They also justifies that the products has been sourced responsibly according to the QUEST principle which include packaging and labelling, supply chain transparency, environmental policy and awareness, and product integrity(B&Q, 2010) Peat and growing media : Since 1991 B&Q stopped to buy peat dig out from SSI(Site of Special Scientific Interest) and to meet with the customer demand at 2001 B&Q launched a peat free organic Multipurpose compost which is a 100% replacement of peat based growing compost (Kingfisher, 2003)

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Ashim Chakraborty, ID No :000570139 Timber: Approximately 22% total revenue of B&Q generates from timber products. As a best seller product B&Q has been tried to ensure that all timber products are supplying from sustainable forest since 1990s(B&Q, 2010). At that time there was no reliable scheme to verify the forests sustainability. By own initiative, B&Q along with some other founders established Forest Stewardship council (FSC) which is executing the legality verification to certify the legal source of timber internationally (FSC 2010). Alternative ways to garden: B&Q is the first company who worked together with the Henry Doubleday Research Association for producing pure organic gardening product and at 2001 they launched first available and independently certified organic gardening product rang. CO2 and chemicals Footprint : As a 12th organisation among GB to achieve Carbon Trust Standard B&Q reduced 6% in total CO2 in terms of 06/07 baseline and have targeted to operate all new stores with 0% CO2 emission by 2012 and diminish transport and global supply chain related carbon dioxide by 50% with 2023( B&Q, 2010). As a DIY and home improvement retailer B&Q sell a higher range of products along with paints fertilisers and timber products which are produced using chemicals. From this concern B&Q working with suppliers to produce alternative products which are consuming low chemicals for example they minimize the VOC level on their own brand paints which is now only 0 to 0.29% (Sutherland, 2009)

ETHICS: B&Qs existing suppliers are spread over 60 different countries. Although it is a complex process to specifying and developing conditions in supply chain, but B&Q is concentrating to investigate the situation and working together with suppliers to establish a standard work environment with fair pay, health and safety, and other benefits (B&Q, 2003).

Adopted from the corporate social responsibility summery report Kingfisher (2003)

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Ashim Chakraborty, ID No :000570139 From social responsibility B&Q jointly working with their suppliers about local concerns for example B&Q moving along with South African suppliers about HIV and AIDS issues. COMMUNITY : In order to create extensive and authentic relationships, every B&Q team members are committed to partnerships with their local communities and to work with them through the donation of waste materials like paint timber off cuts etc to local school and charity or assisting a group of disabled people to produce a neighbourhood garden. B&Q have a better neighbour Grant Scheme which offers 50 to 500 pounds values of goods to local community to assist their projects. Company also working with local organisation operating by disabled people and developing employee training to assist disable people on shop floor (Kingfisher 2003).

Critical evaluation,Knowledge application and recommendation regarding generic strategy SWOT analysis.

It is imperative for any business to be own worst critic. Using the SWOT analysis as a generic strategy of B&Q, it has been realised that SWOT is a magnificent tool to evaluate a generic or in depth scenario of B&Q. Through SWOT analysis B&Q can tune-up their requirements periodically to evaluate and repair what they might be going to worn, what is the limit of breaking down or what they have already been broken down and requires to replacement or re-organise to keep business sustainable-even better then they has in the previous. SWOT analysis will not provide a solution for any professional manager but it will make sure to identify, classify and prioritize clearly the problems, opportunities which offer an efficient estimation technique and develop strategic thinking to take best fit decision towards goal. SWOT analysis provides B&Q a perfect snapshot of their strengths, weakness, opportunities and threats according to current market, economic situation and their competitors as a result they took a numerous activities to extend their strength and opportunity and reduce weakness and threats, for example they started to trained their employees by City & Guilds for retail NVQ and HIKQ for better customer service, started next day order delivery service, customer feedback form for each transaction with a 1000 prize offer for customers engagement, and every month they awarded one employee who achieve highest feedback from customer, to retain their number one position in 15

Ashim Chakraborty, ID No :000570139 gardening section they have created a collaboration with Suttons and also appointed Britains number one gardener Alan Titchmarsh (B&Q, 2010). The recent economic downtown effects B&Qs like to like sales faced a great threat because it was going down since 2006 and was 3% at 2007 (BBC 2007) however by implementing the proper sales pollicises and decision vie SWOT analysis, after 18 month it had been uplifted .2% at 2008(Thompson, 2008) and 0.7% at 2009 (BBC 2009) However, Although SWOT analysis is the combination of external and internal factors but it has some drawbacks and it also might not cover some more features which are very significant to evaluate the generic scenario of B&Q. Because of B&Qs large number of stores, sales volume and data, SWOT analysis have risk of detaining a large number of data is which could make it complicated to notice the timber for the trees and lead to paralysis by analysis. Due to assumption based data analysis, SWOT analysis might not provide correct assumptions and the structure of SWOT is also not detailed as result key elements might be missed. B&Q is an international DIY retailer and have supply chain and manufacturing plant around 60 countries over different parts of the world. In order to gain the competitive advantage, and evaluate the cost and benefit and risks of their foreign investment, B&Q highly required proper information about political, social, economical, technological, legal situation of their trade partner countries, which is not possible only by SWOT analysis. In this case, besides SWOT analysis B&Q might implement PESTLE analysis to re-evaluate and shortlist the external factors and porters five forces to judge the competitors position, emerging competitors and evaluate own competitive strength and sustainability, customer service ability and subsequently attractiveness of a market.

Critical evaluation,Knowledge application and recommendation regarding CSR stretegy.

Corporate social responsibility is not a new concept. Sensitive corporate concentration to CSR has not been completely charitable or voluntary. Numerous companies are attentive about it only being astonished by social responses to concerns which they did not think previously as a part of their corporate responsibilities. However, corporate social responsibility (CSR) has not been ever more important on the business agenda than it is at present, because customers are now more concision about the ethical values and sustainable developments of the companies they buy. After analyzing B&Qs aim and performance towards CSR strategy it has been identified that CSR strategy demonstrate the method 16

Ashim Chakraborty, ID No :000570139 companies achieve improved moral standards and economic equilibrium, social and ecological imperatives indicating the issues and anticipations of their stakeholders. The efficient performance of B&Q towards CSR strategy, achieved different awards, which is enhancing their reputation and social capital. For responsible corporate behaviour they won a huge customer attraction and trust which contributes to enhance their internal strength, profitability, creativity and competitive advantage besides the companys own moral ethical, social and humanitarian responsibility. The environmental section of B&Qs CSR strategy opens a new business opportunity for eco-friendly products; society improvement service and also contributes to set-up eco-friendly focused marketing strategy. To create an efficient workforce health care, proper education and equal opportunity are very necessary. Safe and user friendly products and sustainable working atmosphere not only draw customers attention but help to minimize the costs and accidents. Reduced use of land space, natural water and resources extend companys productivity. B&Qs Over-50s golden oldies diversity policy contributes to reduce their employee absenteeism 39% and turnover six times at 2006 in contrast of previous year as a result company gain 18% profit in this site, because studied have shown that the job satisfaction is a factor which improves proportionally in terms of age and group of satisfied employee is strength of any company (Matheson, 2006).B&Q donate 291,000 worth of products for one planet living award and grant scheme for community projects at 2008/2009 which results 58% of community projects did their further shopping at B&Q UK, with 99 average transaction worth. Company also raised 328,000 in 2008/2009 for corporate charity partner cancer research UK consequently they achieve enormous PR benefits for brand value. As a reword of better neighbourhood and ethical policy, B&Q attracts a large number of disable customers and creates a brand enhancement among community (Kingfisher, 2009). However, for any international company, CSR strategy will not cover different business agenda as the required and it also not free from its dark side. Critics of corporate social responsibility (CSR) advocates debate a lot of issues connected to it which is relation between CSR and elementary purpose, type of business and doubtable motives behind commencing CSR strategy including insincerity, dishonesty, inaccuracy and hypocrisy. Since B&Q is dealing with 60 different countries suppliers, a lot of international stores and manufacturing plants, so in order to ensuring the investment return and accelerate the expansion strategy in different countries they might implement FDI strategy. Moreover they can create effective brand association and collaboration 17

Ashim Chakraborty, ID No :000570139 with locally recognise social responsible companys in trade partner countries, and also can come to sponsoring sports events which will contribute to expedite one planet home project, ethical and social responsibility and facilitate to develop brand reputation, global and social capital, effective international marketing and economical equilibrium.

References

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