LIVERPOOL JOHN MOORES UNIVERSITY

Utility Report
2009 Utility Retail
Cristo Guerra 635697 10/18/2012

A brief report about the company Utility Retail founded in Liverpool in 1999.

1|Page

Summary
This report is about the company Utility Retail, founded in 1999 in Liverpool, and shows a brief report about the different departments and what role they play in the company. Once it is established the departmentalization, Utility will study the market looking for actions that should interact in the decision making. Both, internal and external actions are disaggregated in a PEST and SWOT analysis, in addition of the Porters Five Forces. As well this report has four simple examples about different workflows with witch the company Utility shows the basic steps to follow in the day to day basis.

Contents
Contents................................................................................................................................................2 1. Business Organization......................................................................................................................3 2. Organization Structure and Business Functions...............................................................................3 3. Online Store......................................................................................................................................3 4. Human Resources.............................................................................................................................4 5. Sales and Marketing.........................................................................................................................4 6. Finance and Accounts.......................................................................................................................5 7. Customer Service..............................................................................................................................8 8. PEST Analysis..................................................................................................................................9 9. SWOT Analysis..............................................................................................................................10 10. Porters Five Forces Analysis.......................................................................................................10 11. Workflows....................................................................................................................................11 12. Conclusion....................................................................................................................................15 13. Recommendation..........................................................................................................................15 14. Bibliography.................................................................................................................................15 Figure 1: Organization Structure..........................................................................................................3 Figure 2: Balance Sheet........................................................................................................................7 Figure 3: PEST Analysis......................................................................................................................9 Figure 4: SWOT Analysis..................................................................................................................10 Figure 5: Porter Five Forces...............................................................................................................10 Figure 6: Workflow One....................................................................................................................11 Figure 7: Workflow Two....................................................................................................................12 Figure 8: Workflow Three..................................................................................................................13 Figure 9: Workflow Four....................................................................................................................14

1. Business Organization
Business organization can be classified in variety of ways such as size, type, sector or legal status. Utility is a small business because, although is growing, so far it has four stores, three of them in Liverpool, where Utility is originally, and a new store in London. Utility is a limited company. The company has a limited liability because all assets and all debts are owned by the company not the individuals, and it is limited to the amount invested in the company. Also Utility has three shareholders and belongs to the SIC (2007) where Its classified as another retails sale of new goods in specialized stores. Utility buys goods in large quantities from designer and then sells small quantities to the end users. Retailers are at the end of the supply chain, so manufacturing marketers see the process f retailing as a necessary part of their overall distribution. Shops may be on residential streets, shopping streets with a few or no houses or in a shopping center. Looking the functional organization it is possible to identify different departments where Utility manages all the business relationships. In the next figure is easy to see the departments integrated in Utility Retail.

2. Organization Structure and Business Functions

Figure 1: Organization Structure

Manager Manager Finance Finance Marketing Human Resources Retail Sales Contract Sales Web Sales

3. Online Store
One of the big issues Utility had before 2004 it was they only operates in Liverpool. So, to compensate the demographic problem, in 2004 was launched the online store to offer products to a wider audience, customer who cant shop in the physical store because they live outside Liverpool. The online shop has a simple overview where is possible to find some products by different categories such as shop by brand, shop by designer, shop by category among others. The online store also offer inside the gift category a section where is easy to look for any gift by price. This kind of search makes easier to find any gift if some customers have a budget to expend, or cant afford an expensive gift. As mentioned above, in the website is possible find a huge range of products. More products than in the physical store, because those stores act like a window shops. The online shop is organized by categories, the category by brand has more than 36 different brands and by designer has more than 75 designers.

Nowadays, a good business opportunity that all company should use in the wide range of internet, are the social networks, as Facebook or Twitter. With a naked eye, the social network for individual are just a place where meet people or have fun among other things but for companies with a deeper look the social network offers a huge database, where is easy to identify taste and routines of individuals or even groups. Another good detail of the Utility Retail website is the CSR (Corporate Social Responsibility) Obviously the CSR is not like the CSR from a multinational company, but this report shows that is what Utility contribute. This can mark the difference between competitors in a similar position. The website has a really simple structure and organization where could be easy for individual and groups to find what they are looking for and if they have any enquiry is quite easy to find who they need to contact with to sort out any question.

4. Human Resources
From the corporate vision, employees are viewed as asset to the enterprise, whose value is enhanced by developing. But for Utility any single person counts. So, apart from the head office staffs, Utility tries to keep the work environment fun, vibrant and exciting place to be. Plus the head office staff and in-store staff they have contracts with some independents architects. Logically, the HR department is responsible of the personal selection, determining the profile of the people who can apply to fill the vacancy. They should educate and constantly train the workers. Educate the workers provide values and attitudes and training provide knowledge, the worker acquires skills and experience, and usually it comes as the worker does the job. This department is in charge of all the staff wages, such as holiday pays, salary, taxes, etc. But not only this, the communication in Utility with all the staff is very important, keeping it as much clear, simple an understandable as possible. Through this concept and obviously motivation, Utility tries to achieve a better performance, higher productivity, greater efficiency and responsibility on the part of workers.

5. Sales and Marketing

The sales and marketing functions play a key role in driving demand, defining and measuring the customer experience, together with being the first point of contact for the customer. Their effectiveness have clear impact on business performance (client acquisition and retention, average order values, brand awareness and market perception) Utility has a huge range of prices, so its market could be from standard to high / luxury class. Their products are modern and original design. Utility first store in Liverpool was opened in November 1999 with an experimental range of products from independent designers and makers, and some of the larger brands. Oven the past few years, Utility has expanded with new stores and different formats. The stores have an extensive range of different products (furniture, lighting...) and brands (allesi, braun, vitra...) because Utility is a showroom where the designers can show their products. Also for many of the worlds leading furniture brands Utility is a good dealer. Utility has a specialized service call Utility contracts. This service is for architects and interior designers and specifies to purchase furniture, lighting and accessory packages for new buildings and refurbishment projects. Otherwise, Utility try to keep the prices of his products competitive, so they only sale at the RRP (recommended retail price) if, however, the same brand item, with the same specification, is founded a lower price to the price shown on the website they will price match.

6. Finance and Accounts

The mission of the Finance and Accounting Department in Utility Retail is to provide cost effective and efficient accounting and financial management services. Utility is a supplier of goods, with a few numbers of retail stores in UK, three in Liverpool and one in London. The objective of the retail stores are as follow: Operate with financial viability without subsidy from government. Provide a wide range of quality designer goods at the recommended retail price. Provide employment and training opportunities for people. The account and finance department perform three basic functions in Utility: Accounting. Keeping all the information in the books of accounts, and also it does an internal check of transactions affecting the receipts and expenditure. Finance. Compilation and control of budgets ensure no financial irregularity in the transaction and advice to the management in all matters involving finances decision. Receipts and payments. Collect and deposit all the receipts, preparing payments schedule and arranging payments. The day to day basis for the finance department is be responsible for the management of the Utilitys cash flow and ensuring there are enough founds available to meet all the payments. Where the cash need beyond the day to day working capital, the financial department is responsible for advertising and sourcing longer term financing.

The report shows in the next table is the balance sheet of Utility Retail between years 2008 and 2011.
Utility Retail Limited
Liverpool, L19 2QR (England) Registered no 03840139

Not publicly quoted

Status

Active

This company is Independent (but not the GUO of a Corporate Group) Balance sheet 31/10/2011 GBP 12 months Uncons. Unqualified UK GAAP Fixed Assets Tangible Assets Land & Buildings Fixtures & Fittings Plant & Vehicles Other Fixed Assets Fixed Assets Current Assets Stock & W.I.P. Stock W.I.P. Bank & Deposits Other Current Assets Group Loans (asset) Directors Loans (asset) Other Debtors Current Assets Current Liabilities Total Other Current Liabilities Corporation Tax Dividends 118,826 0 0 0 118,826 118,826 152,460 0 0 0 152,460 152,460 72,790 91,322 72,790 91,322 31/10/2010 GBP 12 months Uncons. Unqualified UK GAAP 31/10/2009 GBP 12 months Uncons. Unqualified 31/10/2008 GBP 12 months Uncons. Unqualified

400,179 400,179 0 19,206 37,920 0 0 37,920 457,305

415,020 415,020 0 76,417 30,439 0 0 30,439 521,876

327,000

320,000

94,230 34,849 0 0 34,849 456,079

61,705 40,084 0 0 40,084 421,789

-376,199

-413,887

-304,684

-288,446

0 0

0 0

0 0

0 0

Accruals & Def. Inc. (short t.) Social Securities & V.A.T. Other Current Liabilities Current Liabilities Net Current Assets (Liab.) Net Tangible Assets (Liab.) Working Capital Total Assets Total Assets less Cur. Liab. Long Term Liabilities Total Other Long Term Liab. Accruals & Def. Inc. (long t.) Other Long Term Liab. Provisions for Other Liab. Deferred Tax Other Provisions Long Term Liabilities Total Assets less Liabilities Shareholders Funds Issued Capital Ordinary Shares Total Reserves Share Premium Account Revaluation Reserves Profit (Loss) Account Other Reserves Shareholders Funds

0 0

0 0

0 0

0 0

-376,199 -376,199

-413,887 -413,887

-304,684 -304,684

-288,446 -288,446

81,106 199,932 81,106 576,131 199,932

107,989 260,449 107,989 674,336 260,449

151,395 224,185 151,395 528,869 224,185

133,343 224,665 133,343 513,111 224,665

-86,565

-72,293

-40,539

-51,704

-45,000 -41,565 -14,819

0 -72,293 -20,744

0 -40,539 -5,600

0 -51,704 -5,600

-14,819 -101,384

-20,744 -93,037

-5,600 -46,139

-5,600 -57,304

98,548

167,412

178,046

167,361

3 3 98,545 0 0 98,545 0 98,548

3 3 167,409 0 0 167,409 0 167,412

178,043 0 0 178,043 0 178,046

167,358 0 0 167,358 0 167,361

Figure 2: Balance Sheet

7. Customer Service
Customer service is the provision of service to customers before, during and after a purchase. After visiting different Utility stores, different aspects come across: Store Atmosphere The store offers a positive ambience to the customers for them to enjoy their shopping and leave with a smile. The store does not give a cluttered look. The products are properly arranged on the shelves according to their sizes and patterns. There is no foul smell in the store as it irritates the customers. The floor and walls do not have unwanted spots. The store is kept clean, no unnecessary packing boxes or any other stuff The customers are well attended. Customers are not allowed to carry eatables inside the store. Safety and Security The merchandise is not displayed at the entry or exit of the store. The products do not have dust marks as they lose appeal and fail to impress the customers. The customers feel safe inside the store. Customer Service Customers are assets of the retail business and the retailer cant afford to lose even a single customer. Greet customers with a smile. Assist them in their shopping. The in-store staffs do not oversell the products to the customers. Let them decide on their own. Give the individual an honest and correct feedback. If any particular product is not good for a specific issue, they suggest some better options. Never compromise on quality of products. One satisfied customer brings five more individuals to the store. Word of mouth plays an important role in Brand Promotion. Refunds and Returns Utility has a concrete refund policy for your store. Never be rude to the customer, instead help him to find something else. Visual Merchandising There is adequate light in the store. Choose light and subtle colors for the walls to set the mood of the walk-ins. Make sure the signage displays all the necessary information about the store and is installed at the right place visible to all. The customers should be able to move and shop freely in the store.

8. PEST Analysis
A difference from a SWOT analysis, the PEST analysis most commonly measures a market, whilst SWOT analysis measures a business unit. So the PEST analysis is a useful tool for understanding market growth or decline, such as the position, potential and direction for Utility Retail. PEST is a acronym for Political, Economic, Social and Technological factors, witch are used to assess the Utilitys market. The PEST analysis headings are a framework for reviewing a situation and it can also, like SWOT analysis and Porters Five Forces model, be use to review a strategy or position. Political Tax policies Interest rates & monetary policies Contract enforcement law Consumer protection Employment laws Competition regulation Political Stability Safety regulations Economic Economic growth Interest rates & monetary policies Government spending Unemployment policy Taxation Inflation rates Stage of the business cycle Consumer confidence

Social Income distribution Demographics and population growth rates Labour and social mobility Lifestyle changes Work/career and leisure attitudes Education

Technological Government research spending Industry focus on technological effort New inventions and development Rate of technology transfer Life cycle and obsolescence speed of technological

Energy use and costs Fashion and hypes Changes in Information Technology Health consciousness & welfare, feelings on safety Living conditions
Figure 3: PEST Analysis

Changes in Internet Changes in Mobile Technology

9. SWOT Analysis
The SWOT analysis is an essential element of any effective business plan. It recognizes opportunities and threats allow Utility to come up with sound development strategy. So it shows factors that could affect the business. The next table shows, what is Utility good at? (Strengths) , the shortcomings Utility should cover to minimise the risk (Weakness), the Opportunities based on Utility strengths and the Threat that Utility needs to recognize and minimise by external factors.
Figure 4: SWOT Analysis

Strengths Large range of products High-quality design products Direct delivery capability Opportunities Expand to new country Expand to new UK regions

Weakness Small market presence Range of prices Small space in physical stores Threats Different competitors in different ranges of products

10. Porters Five Forces Analysis

The Porters Five Forces is a simple but powerful tool for understanding where power lies. This is useful because it can help Utility understand its current position. With a clear understanding of where the power lies, Utility can take fair advantage of a situation of strength, improve a situation of weakness and avoid taking wrong steps. So the Five Forces analysis assumes that there are five important forces that determine competitive power in a business situation. The more powerful these are, the lower its potential profits.

Threat of Substitutes Large range of substitution products Attractive prices Easy of switching

Suppliers Power Number of different designers and brands Cost of design products

Rivalry Number of competitors Quality differences

Buyer Power Price range

New Entry Amount of Capital Designer contracts Access to distribution channels

Figure 5: Porter Five Forces

11. Workflows
Utility, as every single company, can have a lot of different workflows where is possible to identify all the processes that occur in each single operation. The next four workflows are just a small example of those processes. The first workflow is one of the simplest actions, it is about all the actions since customers join the store until they decide to buy, or not, some good and pay for them. In the second workflow is possible to see the steps to follow in the online store since a customer have the necessity of some goods until that customer have in its email account the bill of that purchase. The third workflow is about any kind of return because the customer does not want the product any more or because it has a design problem, so the customer decides to exchange the product. Finally the workflow number four shows the basic steps to follow if Utility Retail wants to add a new design product to its stock. Workflow One

Yes Come back to look around

Do not like

Customer in store Start Looking for goods

Ask staff for details

N o

Customer leave

Like

Process end

Go to cash point

Buy the product

Leave the store

Process end
Figure 6: Workflow One

Workflow Two

Close the Utility online store

N o

Start

Customer go online store

Look for products by categories

Price select

Add to basket

Yes

Promotion codes and vouchers N o Shipping method

Ye s

Add promotion code or voucher

Accept terms and conditions

Register

N o

Make the payment Payment methods: Bill and delivery details sent to customer email -By PayPal -By credit/debit card

Ye s

Add billing address

Add personal details

Figure 7: Workflow Two

Process end

Workflow Three

Ba d

Prepare answer for the customer

Start

Return any product

Details about customer and situation

Product conditions

Process end

Good Accept the complaint Keep details in database

Analyses all the details about customer and product

Problem with the product

Customer does not want the product

Designer fault

Send information to the designer

Keep answer in database

Prepare answer for the customer Send details about the devolution details

Figure 8: Workflow Three

Process end

Workflow Four

Non profitable

Process end

Start

New design

Market Study Pros and Cons

Possible Retail Price

Profitabl e Go to online shop Possible output in physical store

N o

Ye s

Select a category from catalogue

Transport to the store

Add the product

Show the good in the shelves

Keep always in stock

Figure 9: Workflow Four

Process end

12. Conclusion

13. Recommendation

14. Bibliography