Analysis the Watsons company free essay sample

The new era is changing the business environment and competition mechanism, this report follows management theory as a guide, analysis Watsons current situation, external factors and internal factors, etc. Pointed out problems in Watsons management, proposed countermeasures, finally recommendations and summarized. 2. 0 Introduction 2. 1 Watsons Group Each week, millions of customers in 13 countries and regions, more than 8,400 Watsons stores, employing over 98,000 staffs. As Asias leading health and beauty chain store dates back to 1828, when the Canton Dispensary was first founded as a clinic to provide free medical aid to the poor family in Canton province, China. In 1981, Sir. Li Ka-shing’s Hutchison Whampoa Company have been acquired A. S. Watson Group (Hong Kong) Ltd. , since then, Watsons relied on a strong economic strength and flexible business philosophy, Watsons’s rapid rise in Asia. Developing to today, Watsons business, including health care products, beauty products, perfumes, cosmetics, food, drinks, electronic products, wine and airport retail business. We will write a custom essay sample on Analysis the Watsons company or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Also, Watsons become a well-known retail brands. 2. 2 Watsons Singapore Watsons Personal Care Store made its foray into the Singapore market in April 1988 at Marina Square. Watsons’s first pharmacy counter at Ngee Ann City in 2003, Watsons has since expanded rapidly through this few years. Today, Watsons Singapore has 112 stores and 31 pharmacy counters located within its key stores, more than 650 employees service Singapore market. 2. 3 Financial performance For 2011, Watsons Asia area retail turnover is 16. 857 billion Hong Kong dollars, among Singapore market contribute was 7% of turnover, compared with 2010, down 1%, but operating income increased to 34. 71 million Hong Kong dollars (about 6. 94 million Singapore dollars). 2. 4 Key Challenges Watsons as a famous personal care brand in Asia-Pacific area, especially in Singapore and Southeast Asia, the main challenge is competitions. Because in Singapore, Watsons personal care store’s biggest competitor is â€Å"Guardian†, the main business of the two companies are the same, Guardian pursuit differentiated services to customers, but Watsons has very strong economic support, Watsons can choose very good location to run their business, that is difficult to achieve for Guardian Singapore. 3. 0 Environmental Analysis 3. 1 External analysis 3. 1. 1 PEST analysis Political Singapore as a member of World Trade Organization (WTO), Singapore Government encourage foreign excellent company entry to Singapore to set their business, Singapore Economic Development Board promised foreign companies have preferential tax rate of 5% -10%, the maximum term of 10 years or 20 years. Singapore Government has the most comprehensive legal system, the Singapore Government provide â€Å"Investment protection plan† to foreign company in some special business areas, also Singapore as financial center in Asia, the Government will be provide financial support to foreign technology company. Economic Singapore is one of Asias leading developed country, Singapore residents per capita income was $ 40,070 in 2011, ranked 29th in the world, on the residents’ life expenditure side, Food accounted for 22%, Clothing Footwear accounted for 3%, Health care accounted for 6%. Thus, in life expenditure side, the residents pay 30% as their basic expenditure. Follow this data, we can see the market of personal care potential is huge, in todays personal care market, foreign enterprises have become the industry leader, in the past few years, there are not few local enterprises to get involved in field of personal care stores. Also, Singapore Government released population White Paper, the Government is expected to 2020, Singapores total population of 5. 8 million to 6 million, the market demand will increase. Therefore, the performance of the market forces and economic feedback will be better. Social The structure of household chemicals from basic daily consumption shift to personalized consumption. In the era of personalized consumer, consumers pay more attention to the psychological needs, their psychological feelings to decide it is reasonable to measure consumer behavior and attractive of the goods. Watsons has a good corporate image in Singapore. For example, â€Å"Watsons Singapore has recently announced its official fight against breast cancer—the No. 1 cancer killer in Singapore. † Watsons Singapore held various public service activities every year, to build good corporate social image. Thus, to obtain the support and loyalty of many customers, peoples lifestyles and consumer attitudes are changing; promote the consumption of personal care and health. Technological Environment from a technical point of view, sustainable development is a source of technological innovation, environmental protection and energy-saving ideas, promote Watsons own products to technological innovation, in the future, Cosmetics and health care products industry must focus on core competitiveness are scientific and technological content of products. Cosmetics and health products industry will become a new industry of life science applications. Therefore, expand product development capabilities, technology innovation, are one of the important factors. Porter 5 forces Bargaining power of buyers Consumers are usually dispersed, we will be divided consumer into three types. First type, some consumers may just walk around, second type, concerned about the price consumers, third type, really need to buy products consumers. Modern consumers need high-class service, in today of information transparency, compare price is very convenience, thus, they are main reasons for consumer bargain. Bargaining power of Suppliers There are many Watsons’s branch stores in the world; Watsons can be a lot of stock to reduce the purchase price. And Watsons’s own brands are ordered directly from the manufacturer of the product with lowest price, also the price is lower than other same products by other brands. Threat of new entrants For personal care market, low requirement to entry market and high profits, attract many related companies joined the possibility is very high. Simultaneously, more and more competitors use low prices strategy to attract consumers, such as online make up store, small shopping center. In addition to the low-price strategy, but Watsons after-sales service to strengthen its market position. Threat of substitute products or services Even though other personal care stores sell same products, may other store provide professional purchasing guides, but compare with price and quality of products or other reasons, all can affect consumer wishes, thus may have threats of substitute products and services. Rivalry among existing competitors The chain of personal care stores rapid growth in the market; also it has high profits, thus, the same industry companies by providing differentiated products, so as to compete with the competitors. For example, Watsons focus on after-sales service, Guardian focus on differentiation of products and services, other small cosmetic stores focus on category of cosmetics, but Watsons is a combination of department stores and cosmetics. 3. 2 Internal analysis 3. 2. 1 Tangible Financial resource Watsons Singapore is a member of A. S. Watsons Group under Sir. Li Ka-shing’s Hutchison Whampoa Limited, the parent company supports the development of Watsons in financial side. At the same time, Watsons Group itself has a lot of money, in 2011, Watsons total revenue of more than 170 billion Hong Kong dollars (about 34 billion Singapore dollars). Physical assets For Watsons personal care store, the company choose purchase floor area or rent long-term (5 years to 20 years). Worker In Watsons Singapore, it has about 650 employees, most of the Watsons staffs are full-time job, and Watson hired a few part-time employees, Watsons according to the area of the shop to equipped employees. 3. 2. 2 Intangible Reputation The most important is reputation for a company, consumers tend to buy products or services from a firm that is held in high regard, many customers are even willing to pay more for that firms recognizable brand. Reputation reduces uncertainty and risk. Watsons has very higher brand equity and reputation, consumers more readily to accept this brand, believe products quality from brand. Technology Watson has its own brand products, also has a large professional research development team, RD team keep up with customer demand, in all aspects demonstrated its ability of innovate. Human capital Watson said the talent is main reason to the success. Company to attract and cultivate large quantities of high quality, high potential and talents willing grow with the company. Watson through external recruitment, internal succession planning, high performance training plan and core staff development plan to achieve the companys human resources strategy. Watsons’s employees are more understanding and familiarity for Watson own brand products and other brands products, employees are more professional than other personal care stores. 4. 0 Management function Planning and strategizing Watsons current situation is grim, the main competitor Guardian has 153  personal care stores, Watsons only 112 stores, and advantage of opponent in the number of stores, but Guardian’s location is near MRT stations, in the shopping mall. In the future, Watsons personal care stores more focus on development in the community, community-based personal care stores emphasize timeliness, breadth, convenience, etc. through these advantages to occupy more market share. At the same time, in the next 5 years, Watsons personal care store need to set new stores to 200 locations, expand the proportion of own-brand products in the sale of products. 4. 2 Organizing Watsons organizational structure is biased towards the analysis style structure. According to the different types of stores, with different products and staff, the financial staff will come to each store to collect data, also the manager of store will report the detail to Watsons company each month, Watsons have detail of operation process, to whom to report problem, etc.   Leading Leadership is through effective communication and incentives to allow members to work hard to achieve the target, effectively motivate for each member, and effectively resolve various contradictions and conflicts that may arise. In Watsons personal care store, usually a manager on duty, led 2 to 4 staffs, in some larger personal care store has a manager with 2 directors, and 2 directors led 4 to 8 staffs. This fitting manner, let every thing has staff to do, improve the work efficiency, but does not assign specific tasks to each staff, each staff should understand the workflow. Can do best self, also can cooperate with other staff.   Controlling Controlling is the process of tracking actual work, and compares plan process, identify problems and promptly corrected, in order to ensure the effective implementation of the project plan. Managers cannot shirk the responsibility to subordinates, this is the absolute principle in Watsons. As a manager, when the allocations of tasks, the employees have responsibility, manager also bear the same responsibility, final is managers responsibility, even though should be given to employees to complete the task independently space, but that does not mean you can be irresponsible, in order to promote and ensure that employees have to complete the task, also need to give timely guidance, support, incentives and checks. Watson is a successful company, but it is not perfect. Visited Watsons retail stores and websites in few days, there are some suggestions will response. The lack of talent Competition in the market is brand competition, brand competition is the product competition, and product competition is the talent competition. In the future development plan, Watsons will open more stores in Singapore, therefore, the Watsons need more talent to achieve it, but talents are limited, Watsons can cooperate with university or college, invite related course graduates join Watsons when they finish university degree. Monitoring the quality of Watsons own brand products In the past two years, Watsons own brand products accounted 21% of the market shares in merchandise sales. The quality of products is most important in today, Watsons own brand products from the OEM factories, thus, how to guarantee the quality of the of the product is one of problems. Therefore, Watsons should be dispatched working group to the factory to monitor workflow to ensure quality of products. Actively maintain existing markets Watsons Singapore as A.S. Watsons Group early overseas market, even though the market is saturated today, but Watsons need to innovative service concept, actively consolidating market share. 6. 0 Conclusion Watsons reputation, excellent service and company image, enhance consumer loyalty. Watson may actively use its own brand in the future, improving product quality and other ways to strengthen the image of the enterprise itself. More important is the intimate service for consumers, improve customer trust for Watsons.