Halfords: Internal and External Analysis of the Company

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Introduction

Halfords Group PLC is an organization that was established in 1892. It became an official cycle company in 1906. It has had its ups and downs and today it can be referred to as one of the leading organizations in its area of specialization. The organization is a retail industry that deals with various products and services. It sells car parts and enhancements bicycles and their parts as well as children’s seats. Other products are roof boxes, outdoor leisure, and camping equipment. In addition, they offer services such as bicycle repair, audio installation, and car part fitting. It operates 469 stores in the UK and the Republic of Ireland (ROI). It is run by a board of directors who are either executive or non-executive. It aims to maintain and influence its strengths. It also seeks to open up new opportunities across the world. Halfords is also a potential employer having employed more than 10,000 people (Halfords Group PLC, 2010).

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Objectives and Purpose

Halfords just like any other company has its objectives and purpose set right. The company aims to extend its territories in terms of selling the products and offering the services. This includes opening up international opportunities. It wishes to open and invest in more stores all over the world. Moreover, Halfords leverages its brand in a multi-channel as a strategy. As a long-term goal, Halfords intends to achieve and sustain 15% CAGR growth earnings. It also aims to maintain its position as the leading non-food retail industry by meeting the 8% CAGR growth earnings. In the future, it aims to extend its services to include automotive aftercare. Finally, Halfords wants to maintain its efficient financial cycle.

Halfords focuses on their consumer demands. They learn about the market and hence design the products and services that meet their customers’ expectations. They achieve this by enhancing the store formats; installing websites and in-store services.

Impact of Legal, Social Ethical and Technological Factors in the Next Two Years

Legal factor is a key component for Halford’s daily operations. They integrate it into governing the company. For instance, the company is governed by the statement of compliance with the combined code of 2006. In addition, there are Articles of Association that outline important terms and conditions used in running the company.

The group has put in place a legal and regulatory control unit that advises and takes necessary actions such as managing risks and issues as they come up. They seek to monitor the Group’s brand and to protect it. In addition, it plans to avoid controversies at all costs in the future. To avoid legal disputes such as the one it had with Carrera Italian company over a brand, the legal department ensures that the group has independent brands.

It ensures that the Group is not faced with reputational issues. They safeguard the reputation of the company because they understand the implication that can result from a failure to do so. Its major responsibility is to make sure people continue having trust and confidence in the Group.

Social ethical factors impact greatly Halford’s operations. As a company, they recognize the fact what they do affect people and the environment surrounding them. They, therefore, take all necessary measures to manage issues that come up as a result of this interaction. Halfords adopt corporate social responsibility (CSR) by taking care of the environment and social factors. Halfords improve their corporate social responsibility by ensuring that they have a positive influence on the people around them and the environment in which they operate from. This not only involves their customers but also their employees and their suppliers. This includes ensuring the health and safety of their customers and employees’ welfare (Panapanaan and Linnanen, 2009).

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In the next two years, Halfords will have reviewed their corporate social responsibility strategy to integrate the ‘Business in the Community’ policy. Halfords wishes to improve its management of social, environmental, and economic issues in the future. It will also concentrate on improving the key areas of corporate social responsibility. They intend to strengthen the interaction between them, the environment, and the community.

As a CSR strategy, Halfords play a key role in developing the community in which it operates. This is through charity work by partnering with other organizations. It also sponsors people and projects that are beneficial to the community. It strengthens the bond between them and the community by holding outdoor leisure activities.

To maintain high ethics and quality, Halfords use their code of conduct which encourages international standards. They are frequently audited to avoid compromising standards. Some of Halfords’ products are manufactured by EN, BS, and ISO standards. These standards are audited by the international company.

To give quality products and services, Halfords have adopted a culture in which they motivate their employees. These are people who play a key role in the daily operations of the company. They monitor, source, market, and even communicate. For them to deliver efficiently, they are normally motivated. This has resulted in them working with passion making the company stand out in the competitive environment. They also train them and recruit professionally. The principle of equal opportunity is used when employing the worker. There is no discrimination based on gender, race, religion, or age (Pettigrew, et al., 1988).

Technological factors highly influence operation at Halfords. It is also expected to continue having tremendous impacts in the future. Halfords employs information technology in their operating system. Areas that use such technology are such as the warehouse and distribution departments. Technology has influenced their operations in that the services are more reliable and suitable to both the company and their customers. The systems are well maintained to ensure that the quality of products and services is not compromised. To achieve this Halfords has a well-equipped data center that is run by professionals. Halfords also use technology to maximize profits and at the same time minimize losses. For example, the company avoids risks by putting in place disaster recovery systems. Among them is the backup method of having a data center away from the headquarters in the UK. There are more ongoing technology projects that will improve the efficiency of the company in the next two years. Among them is a distribution structure.

To meet business needs and increase sales, Halfords established a website. This was one way of providing an e-commerce solution especially when the business is at its peak. With the help of Salmon, it installed an IBM web sphere commerce which is characterized by modern retail technology. With modern technology, the company has realized the highest turnover. Earlier on, Halfords had problems with Boots’ IT infrastructure since it was expensive to manage. In addition, it could not manage to expand demands. The new system improved conversion rates and enhanced online shopping for customers. The site not only allows online shopping but also has increased offline sales since people can browse to know the kind of products and services they offer before going to shop in the stores.

Hand-held terminals are being used in Halfords. This has improved inventory management. Moreover, a schedule and payment system have been installed in the company. This system enables the management to monitor operations as well as enhance labor planning (Marcel, et al., 2010).

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A “product finder” in which the company uses a garget that can use registration numbers to determine the matching part required by the vehicle. This has resulted in quality services and efficiency.

Halfords in the next two years plans to develop new multi-channels and capabilities. This will improve the customer experience. It also plans to work with Salmon for technological advice and guidance to continue leading in its area of specialization. Halfords is optimistic that it will be able to survive in the competitive environment.

They also plan to improve how their employees work. This is especially for distribution departments. This is by introducing an intelligent management system. One such system is “picking by voice”. It enables people to take orders to give live instructions. This is possible through a headset by computer. Halfords aims to achieve high pick rates as well as concurrent pick by many stores.

The company also intends to increase the awareness of its services and products. They are going to do this through the national radio. The campaign aims to increase sales.

Competitive Market Forces and Their Effects

Halford’s major markets are UK and ROI. Though there are big competitive market forces, Halfords has continued to shine. This is because of its unique services. In addition, Halfords indeed go the extra mile such as working on the feedback from the customers. To survive in the competitive market, the company ensures that they analyze the market behaviors. They grow as the market expands. They predict the future expansion and increase their growth in the market share. Retail marketing is also their strong point. It allows them to take the advantage of the market with all their products.

Halfords continue researching new products in the market. To gain more competitive advantage, the Group conducts customer research to continue providing a wide range of products.

Despite the competitive markets, Halfords continues to maintain its position as a leading retailer of its products. There have been harsh prevailing market conditions but Halfords do not consider them as drawbacks but work hard to maintain its growth.

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It is important to note that the competitive market has had its down moments hence affecting Britain’s cycling community. There is a low level of sporting participation in the UK. The bicycle market is therefore doing badly hence low sales.

Due to the changing consumer preferences, Halfords ensures that their experienced colleagues are in the market to monitor the trends and take the necessary measures on time. In case the products that they sell face stiff competition they look into new ways in which they can make the products better and competitive (Burns and Stalker, 1994).

Significance of Europeans Dimension for Halfords

Europeans dimension has influenced Halfords to a large extent. In some cases, the dimensions have positive effects while sometimes it has negative effects. In March 2010, the company’s central European operations were shut down. This was to the advantage of many since some people were employed. In addition, the company avoided annual losses. It also allowed the company to deal with domestic business hence increasing their long-term vision of achieving 15% growth earnings.

The European dimension continues to pose harsh trading conditions. In Central Europe and specifically in the Republic of Czech, they depend on car exports. This means that the Group does not make sales but instead, they make losses. Due to this fact, Halfords intends to change their range of products as well as their prices. They also intend to increase the number of stores in growth potential areas (Pugh, ed., 2007).

Conclusion

The relationship between an organization and its environment is very important. The environment can be looked at as both internal and external. In this case, Halfords Group has the local and international community as its external environment. On the other hand, its employees and suppliers are its internal environment. Both the environment and the organization influence each other in different ways. The most important thing for the organization is therefore to come up with strategies to cope with the dynamic environment. Halfords has ensured that it has put all organizational structures in place. These include legal, socially ethical, and technological structures. It ensures good interaction between it and the environment hence realizing the maximum benefits for both parties.

References

Burns, T. & Stalker, G., 1994. The management of innovation. 3rd ed.. Oxford, UK: Oxford University Press.

Halfords Group PLC, 2010. Annual Report 2009-2010. Web.

Marcel, M. et al., 2010. A Phase-wise Development Approach to Business Excellence: Towards an Innovative, Stakeholder-oriented Assessment Tool for Organizational Excellence and CSR. Journal of Business Ethics, 55(2), pp. 83-98.

Panapanaan, V. & Linnanen, L., 2009. Global Practices of Corporate Social Responsibility. Journal of Business Ethics, 20(I), PP. 73-102.

Pettigrew, J. et al., 1988. How Halfords Put Its HRM into Top Gear. UK: Personal Publication Ltd.

Pugh, D. S. ed., 2007. Organization theory: Selected reading, 3rd ed. London: Penguin.

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