Information System Assignment on Blackmores Limited
Assignment Overview :Each student will write a strategic analysis report of NOT more than 2500 words. The report should demonstrate that the student has thoroughly researched their topic. Students should use examples of business practice from the scholarly journals papers, conferences, books and professional magazines to support their arguments. The strategic analysis will be on a local company. The report consists of two parts and should cover the following requirements:
PART 1 (External analysis)
- Business background
- What industry is it?
- General environment analysis (economic, physical, sociocultural, global, technological, political/legal and demographic – and work out what the important facts are).
- The industry environment ((i.e., supplier power, buyer power, potential entrants, substitute products and rivalry among competitors) and explain briefly what is significant for each).
- Competitive environment (Is there a strategic group that you need to take account of? What is the rivalry like in this group? What capabilities do the relevant firms have? What strategies do they follow? What threats do they represent?)
- Opportunities and threats
PART 2 (Internal analysis and proposal)
- The firm’s resources, tangible and intangible
- Capabilities identification (explain the capabilities carefully to indicate what the firm really does.)
- Core competency analysis (For each capability, indicate which of the four tests for a core competency it meets).
- Propose a suitable information system solution that meets the chosen company needs.
- Evaluate the proposed system and provide your recommendations
Business background: This information system assignment focuses on the environmental analysis of a company and recommends a suitable information system so that the business goals and objectives of that particular company can be met. For the discussion, famous Australian company of health sector i.e. Blackmores Limited is selected. This is famous Australian company which is involved in the production of vitamin and health supplements. Currently, company has expanded its business in many countries also. Basically, the company is involved in manufacturing of vitamin and dietary supplements and providing health benefits to the consumers in the health sector. The dietary supplements produced by the company are famous among the consumers of Australia (Ibis world, 2016). Blackmores Limited is operating since last 80 years in the Australian healthcare sector so, this is the most trusted brand in the healthcare industry. Based on a survey, Blackmores has targeted around 76.5% of consumer market of Australia. In addition to this, company has also targeted other countries i.e. New Zealand, Malaysia, Thailand and countries in Asian Region. On e of the key success factor of the company its low prices of the product which is affordable for each customer (Blackmore, 2013). We are providing some sample solutions of information system assignments, to help you in building up a concept plan in drafting the solution yourselves.
Blackmores Limited is operating in the healthcare industry of Australia. The healthcare industry of the country includes wide range of services and facilities for the patients. According to Australian Bureau of Statistics (ABS), healthcare industry is the largest industry of Australia. The industry includes various health care and social support i.e. aged and child care. There is the rising demand for the vitamin and dietary supplements in the country due to growing and ageing population. In Australia, there are three major trends which drive the sales of vitamin supplements:
Healthy living- Consumers are more concerned for their health so they are taking control in more holistic manner.
New distribution channel- The availability of foreign purchaser buying the vitamin supplements on the behalf of Chinese consumers.
General environment analysis
There are various environmental factors that impact on the business operations of the company. The factors also affect the strategies and performance of the company in the industry. Basically, external factors are those outside factors that impact on the decision making process of the company in terms of business model, objectives, strategy and direction for the business. The environmental analysis of Blackmores Limited is as follows:
Political factors- In Australia, company is affected by the policies and rules imposed by the government. There are political factors i.e. political stability, unemployment rate, tax policies, exchange rate and international trade regulations in Australia that impact the business operations of the company. In addition to this, company is operating in other countries also. So, it has to follow the regulations imposed by governments of those countries (Sullivan, 2012).
Economic factors- The economic and financial performance of the company is affected by GDP in the global market. Further, inflation rate is also the factor that affects the business operations as the rate is increasing continuously. The inflation rate is high because of local and international factors. High prices of raw material impact on the business operations of the company. In addition to this, it is observed that unemployment rate in some countries is also high which creates difficulties for the company to operate in those countries. The company has to face the problem in distribution of working power in the labor market.
Socio-cultural factors- Education system and age structure in the society have significant role in the business operations of Blackmores Limited. Educated people have proper knowledge about the requirements of vitamin and dietary supplements in their daily lives. In addition to this, life expectancy and age structure have also improved the quality of business operations of the company (Turnbull & Valla, 2013).
Technological factors- Blackmores Limited have advanced technology and strong Research and Development team by which the company is able to achieve competitive advantage in the operating market. By the implementation and proper use of communication technologies, the company is able to provide quality health supplements to the customers in Australian market. Company is also spending high amount to manufacture quality dietary supplements for the consumers (Uweguro, 2014).
Threats of new entrants- In the healthcare sector, there are many restrictions for the new companies who want to enter in the market. There are CAPEX and legal policies that restrict the new companies to enter in the industry. So, threats of new entrants in the healthcare industry are very low.
Competitive rivalry- In the healthcare sector of Australia, there is strong competition among the companies. For Blackmores Limited, Swissee Vitamins is one of the strong competitors in the market. Moreover, competitors are able to reformulate the products by the fragmented marketing. So, it is observed that there is high level of competitive rivalry in the Australian healthcare market that impacts the business operations of Blackmores Limited.
Bargaining power of buyers- Blackmores Limited has started online marketing to sale its products in the market. By this initiative, the company has now strong position in the Australian market. By the direct selling channels in online sales, company has maintained strong relationships with the buyers and consumers. Those consumers are important for the business as they generate revenue for the company. In addition to this, supermarkets have more power over the company due to their economies of scale (Casimir, 2009). Thus, it can be said that bargaining power of buyers is high in the Australian healthcare industry.
Bargaining power of suppliers- In the healthcare sector of Australia, the bargaining power of suppliers is very low. Inputs used by Blackmores Limited are not very specialized so, bargaining power of suppliers is weak in this industry. By the expansion in the Asia region, company can expand the choice of the suppliers.
Threats of substitutes- In the healthcare industry, there is minimum threat for substitute products as customers always select those companies that are providing nutrients in their diet. In addition to this, consumers do not easily trust on the new companies so, they always prefer old brands. Although, there is the availability of many Chinese medicines in the market which can be considered as the significant threat for Blackmores Limited but the threat is substitute products is still low in the Australian healthcare industry.
In the healthcare industry of Australia, there is strong competition among the companies in terms of product quality and prices. Despite of sophisticated healthcare system of Australia, there is slow growth in the medical market. Companies in Australian healthcare sector are facing fierce competition from the manufacturers of vitamin supplements of other countries that already have strong position in the market (Gilligan & Hird, 2012). For Blackmores Limited, Swissee Vitamins is one of the strong competitors in the market. In addition to this, there are more companies that gives strong competition to Blackmores Limited i.e. Nature’s Own, Vitaco Health, Sanofi and NOW Foods etc. Moreover, competitors are able to reformulate the products by the fragmented marketing. So, there is high competition in the healthcare market for the operating companies (Gap, 2015).
Opportunities and threats
Opportunities- Blackmores Limited has significant opportunity to expand the business in more countries. In addition to this, the company has opportunity to open its retail stores. By this, the company will achieve high level sales growth for its products. For the business expansion, Asian region is considered as the biggest opportunity for the company. In order to get this opportunity, company can launch its health and vitamin supplements in China. The company can also launch the products related to pet care so that more market shares can be gained (Lovelock, 2011).
Threats- Despite of various opportunities, there are many threats and hurdles for Blackmores Limited while operating the business Australia and other markets. There is very strong competition in the Australian healthcare industry in terms of providing health supplements. Companies in this industry are trying to achieve high market share and enhance their position in the operating market. They are also using innovative marketing strategies to get competitive advantage. In addition to this, chemists in the country ask for lower prices of the products which also can be a threat for Blackmores Limited.
Firm’s Resources: Blackmores Limited is the powerful and famous brand in the healthcare industry. The company has positive reputation among the customers due to its quality dietary supplements. The resources of Blackmores Limited are its core strategy by which the company is able to maintain effective position in the market.
Core strategy- The objective of the company is to manufacture dietary and vitamin supplements to individuals who need additional diet. Company has policy to maintain effective relationship with the loyal consumers. So, company has focused on providing quality dietary supplements by working closely with the customers and suppliers. In addition to this, the core strategy of Blackmores Limited is to achieve high share prices in the market and the company is successful in its objectives also. The company has also adopted some innovative strategies used by the company like introducing new products, giving revert and preference to loyal customers, and providing extra health support to the customers etc (Armstrong & Cunningham, 2012).
Blackmores Limited has top-down management structure by which it is capable enough to find out new business opportunities for the growth and development in the operating market. Company has various new resources in the market i.e. many buying processes helpful for the company and self-sufficiency for store manager etc. In addition to this, restructuring of the business is one of the key capabilities of company which is used to gain effective position in the market. Restructuring is also helpful for the company to maintain significant relationships with the potential suppliers and customers (Fifield, 2012).
Human resource capabilities- In Company, human resource managers are involved in different work priorities like innovation, product development and leadership and profitable growth in the company. In addition to this, human resource has significant role in allocating the tasks to local workforce. The HR department is responsible in providing positive work environment to the employees. Due to strong HR department, Blackmores Limited has strong sales growth in last 13 years which ensures that there are right people in the company (Donaldson, 2015).
Financial capabilities- The Company have achieved strong financial position in the operating market. The sales of the company are increasing continuously. In financial year 2014, the company launched 50 new health and diet supplement products in Australian market. Company is holding 25% of shares in the market.
Physical capabilities- Blackmores Limited is involved in sales, marketing and development of the supplements like vitamin, herbal and nutritional products. The company has wide range of categories including super foods, pet health, cold, flu and immunity, bone and muscles and everyday health supplements etc. Company is focused on understanding the requirements of people and trying to give best dietary supplements on the basis of those needs (Stapleton, 2016).
In the competency, the objective of the company is to maintain its positive brand image, excellent quality control and effective customer’s services over its rivals. Blackmores Limited has competitive advantage related to return on asset, shareholder equity and cash conversion as compared to competitors. By the development of quality vitamin supplements, company is able to identify new resources in the market. The company also has rigid management structure by which it is able to handle the changes in market conditions.
Suitable information system solution
Blackmores Limited deals in manufacturing the vitamin and dietary supplements so that the additional requirements in the diet of people can be completed. In order to manage the business successfully, there is the need of proper and effective information system. An effective information system would be helpful in getting necessary information for making effective decision related to product manufacturing. Effective pharmaceutical management needs program managers, policy makers and health care providers who monitor significant information related to availability of vitamin supplements, drug resistance, product registration, post market intelligence, patient safety, product quality and financing and program management. For the company Blackmores Limited, Pharmaceutical Manufacturing Information System (PMIS) would be suitable which would help the company to get all the relevant information and improve quality, optimize production maintenance the cost (Admasu, 2014).
Evaluation of proposed system
Pharmaceutical Manufacturing Information System (PMIS) is able to synthesize information data for the management operations. It processes the data into relevant information for the use of planning activities, allocating resources, estimating demand and evaluating management operations. PMIS can also be used for improving accountability and creating audit for the products. For Blackmores Limited, PMIS would provide important information to make effective decisions for business. In the company, there is the need for timely and accurate information on the various parameters that impact on the budgeting, procurement planning, program management and resource mobilization. PMIS would be helpful for the company to analyze and use various data for the improved decision making. The system will ensure about the availability of sufficient quantity of vitamin supplements and consumable materials for the patients. This will also improve the managerial work and process drugs prescriptions in the efficient manner. In addition to this, the system will be helpful in removing time wasting, and saving the required resources. PMIS will allow easy access to the vitamin and dietary supplements and provide more security on data as compared to manual based system (Shroff, Verdi, & Yu, 2013).
Functions of PMIS include planning activities, allocating resources, estimating demands and monitoring and evaluating management operations of the company. In this system, every stakeholder can be able to access and monitor own unit.
Accountability- Another important function of PMIS is to enhance accountability. PMIS will create an audit trail for the vitamin supplements as they leave or enter the supply system.
Screening- This is the next function of PMIS as information system will assist in patient care by analyzing drug interactions, allergies and potential complications related to medication. By this system, any issue related to proper dosage and age, weight and physiologic factors of patients can be tracked.
Prescription management- PMIS can be used to manage the prescription for various patients an provide the supplements accordingly. By this system, the availability of vitamin and dietary supplement quantity can also be tracked.
Inventory management- PMIS would also be beneficial for Blackmores Limited in terms of managing inventory. This would maintain internal inventory of the company related to products and create alert when quantity of any product is below the set level (Festus & Xiaoming 2010).
In this information system assignment there are some recommendations for Blackmores Limited while implementing information system in the business operations.
- The design of PMIS should be based on various information i.e. existing forms, reports, and process,
- The design of PMIS should be based on various information i.e. existing forms, reports, and process,
- There should be effective mechanism to receive and provide feedbacks and
- The presentation of information should be in graphic form to simplify the interpretation
Admasu, K., 2014. Information Systems for Nutrition (Online) Available from https://scalingupnutrition.org/wp-content/uploads/2012/10/Green_External_InPractice_second_ENG_20140806_web-spreads.pdf (Accessed on 19th September 2018)
Blackmore, 2013. Blackmores Limited Presentation to Goldman Sachs Emerging Companies Conference 15 May 2013, (Online) Available from file:///C:/Users/Guest/Downloads/analystbriefing.pdf (Accessed on 19th September 2018)
Casimir, M. J., 2009. Culture and the Changing Environment, NY: Berghahn Books
Donaldson, C., 2015. HOW HR DRIVES BLACKMORES’ BUSINESS GROWTH AND SUCCESS (Online) Available from http://www.insidehr.com.au/how-hr-drives-blackmores-sales-growth-and-business-success/ (Accessed on 19th September 2018)
Festus, O., & Xiaoming Li., 2010. "Information sharing and collaboration practices in reverse logistics", Supply Chain Management: An International Journal, 15(6), pp. 454 – 462
Fifield, P., 2012. Marketing strategy (2nd edition), Berlin: Reed educational & publishing Pvt Ltd
Gap, 2015. “The Australian Healthcare System as a Market” (Online) Available from http://www.globalaccesspartners.org/GAP_Health_Workshop_Report_28_April_2015.pdf (Accessed on 19th September 2018)
Gilligan, C., & Hird, M., 2012. International Marketing Strategy and Management, (Vol. 17)
Ibis world, 2016. Blackmores Limited - Profile Company Report Australia (online) Available from https://www.ibisworld.com.au/enterprisefull/segments.aspx?entid=1165 (Accessed on 19th September 2018)
Lovelock, C., 2011. Services Marketing (7th edition), India: Pearson Education
Shroff, N., Verdi, R.S. and Yu, G., 2013. Information environment and the investment decisions of multinational corporations: The Accounting Review, 89(2), pp.759-790
Stapleton, M., 2016. Blackmores and managing growth: Lessons from the big end of town (online) Available from http://www.smartcompany.com.au/finance/blackmores-manage-growth-lessons-big-end-town/ (Accessed on 19th September 2018)
Sullivan, A., 2012. Blackmore Alive! Trade Presenter (Online) Available from https://issuu.com/alice.sullivan/docs/blackmores_alive__trade_presenter (Accessed on 19th September 2018)
Turnbull, P. W., & Valla, J. P., 2013. Strategies for international industrial marketing, USA: Croom Helm
Uweguro, 2014. MICRO ENVIRONMENT, (Online) Available from https://uweguro.wordpress.com/2014/11/04/micro-environment/ (Accessed on 19th September 2018)