Research Articles Base: Fashion Culture In The UK

Consumer Behaviour and Case Study Questions Assignment

Consumer Behaviour and Case Study Questions Assignment

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Case Study Analysis: Briefly identify Hewlett-Packard’s ‘strategic agenda’, i.e. what are the fundamental questions and problems that concern organizations and their successful development

Case Study Analysis: Briefly identify Hewlett-Packard’s ‘strategic agenda’, i.e. what are the fundamental questions  and problems that concern organizations and their successful development”  (2002).   Overview of the Company               Hewlett Packard is the world’s leading producer of test and measurement instruments and the world’s third largest computer company. It has become a major player in the personal computer market, and at in a 1999 survey was the sixth biggest in terms of market share, having moved up from fourteenth largest in 1992. It is also the second largest player in the computer workstations market, and holds the dominant position in the laser printer business.   The company was the only major computer manufacturer which remained profitable during the recession. The corporation employs 96,200 staff worldwide, of which 20,200 are employed in Europe and 2,000 in the UK (in the UK Computer Systems Organization). Underpinning the Hewlett Packard culture is the HP Way, developed by founders Bill Hewlett and Dave Packard, which emphasizes clearly stated and agreed overall objectives but gives people the freedom to work towards these goals in ways they determine best for their own areas of responsibility (1999).             The HP Way is probably best illustrated from a number of words and concepts extracted from Hewlett Packard’s own publications. These are love of the product, love of the customer, innovation, quality, open communication, commitment to people, trust, confidence, informality, teamwork, sharing, openness, autonomy, responsibility ( 2001).   Other pillars of the HP Way include an emphasis on selecting individuals on the basis of their creativity and their enthusiasm, and the need for cooperation between organizational levels. A sophisticated performance management process and clear organizational values, together with a single status culture, has brought strong identification with the company on the part of employees.      Hewlett Packard breaks up units that grow beyond a certain benchmark. Hierarchy and status are taboo. Even the company president only reluctantly took that title. Any “perks” or status symbols are immediately dispensed with. The plants are periodically polled anonymously to ensure that the company lives up to its ideals (1992). The organization has traditionally had a decentralized structure, but with the growth of the computer business a more centralized approach was taken to reflect the systems nature of the business.         Background of the Case Study          Mark Hurd is credited to be one of the forerunners who tried to turn around a sprawling, billion technology company, following years of lackluster performance. One year after he took the job as chief executive officer at Hewlett Packard, following the forced departure of the flashy but flawed Carly Fiorina, Mr. Hurd has started to revive the fortunes of a legendary Silicon Valley firm.   The new chief executive is an understated operations geek, the type of manager that excels at HP, the epitome of an engineering-driven company. “Vision without execution is nothing,” he says. “Whenever anyone asks me about vision, I get very nervous. You’ve got to be able to tie it back to strategy; you’ve got to tie accountability to things.” Mr Hurd prefers to stand when he talks rather than sit; he wears crisply knotted ties while his managers are allowed open-collared shirts. At 49 years old, his hair is cropped short and every strand is perfectly in place, as one might expect from a man who spent the past 25 years ascending the ranks of a century-old business in Dayton, Ohio called NCR—originally National Cash Register.   When Mark Hurd joined Hewlett-Packard, what he found was a firm spread thin with many units losing money and propped up by the sales of printer-ink cartridges. Its activities spanned both the consumer and business market, selling everything from high-end software to flat-panel television screens. Yet instead of shedding business units, Mr. Hurd has decided to (in his words) “double down” on his bets, and simply do more of the same, but better.   Over the past year he has reorganized HP into three main divisions: enterprise computing and services; general tech hardware (such as PCs, handheld devices and the like); and imaging and printing. The company hopes to capitalize on trends such as computing on the move, and the growing demand for printing, including sophisticated commercial printing.               Clearly-defined corporate values, vision, and strategic planning are the key elements in the remarkable growth achieved by Hewlett-Packard. For nearly half a century, revenue and earnings have grown at a consistent rate of 20% per year, propelling HP from a small manufacturer to the ranks of the leading multinationals (1997).               The first strength of Hewlett Packard’s planning process is vision. Their strategic planning is guided by a clear vision of what Hewlett-Packard is and where the company heading. This broad sense of direction focuses the company’s many product groups and divisions. It helps explain the sustained success Hewlett Packard had since their inception.               This vision is communicated in several ways. In part it reflects what they call the “HP Way.” These are a set of five values enunciated by their founders. They are: (1) trust and respect for individuals, (2) commitment to high level achievement and contribution, (3) uncompromising integrity, (4) teamwork, and (5) flexibility and innovation.               Hewlett Packard’s planning is also guided by more specific long-range goals. These are called Hoshins. Hoshin is a Japanese word meaning “a shining piece of metal that points the direction,” in other words–a compass (1997). These Hoshins are not hollow pronouncements. They’re deeply felt business objectives that cascade down through the organization. Each business unit translates the Hoshin into terms that reflect its own mission.               The second strength of Hewlett-Packard’s strategic planning is that it’s decentralized. Hewlett-Packard has nearly 112,000 employees in 110 nations. Their marketing reaches even more places. Hewlett Packard sells over 87,000 products and services in 250 countries. No central office could manage detailed projections for all these far-flung units, thus the need for decentralization. The results of this decentralized approach have been impressive.               Their product divisions are fully functioning global businesses with their own research and development, marketing, administration, sales and support. They form the nucleus of Hewlett-Packard, and are the primary drivers of its growth and profitability. So Hewlett Packard’s planning is multi-business.               The third strength of Hewlett Packard’s strategic planning process is that it emphasizes innovation. This commitment shapes all the company’s plans and their devotion to research and development. And it’s been one of the keys to the company’s success in the rapidly changing world of high technology.               The next and fourth strength of Hewlett Packard’s planning process is that it is responsive to the needs and expectations of their customers. This quality, like the others already mentioned, is crucial to the company’s success. The company believes that they will continue to grow only if they go beyond simply satisfying the needs of their clients and work to delight them.               The fifth strength of strategic planning at Hewlett Packard is that it is constant. It’s driven by the calendar and by events. And this too has been a secret of the company’s success. As a result of this approach the company is always in a planning mode. Hewlett Packard reinforces this planning process by measuring, at each stage, the progress made toward their objectives. They also reinforce this planning by linking employee compensation — and other regular activity — to results.   Analysis and Discussion               In each and every line of business, the entrepreneurs compete with each other is the sale of their products or services. Thus, we can see that competition is basic in a system. This is seen in the case of Hewlett Packard. The institution of free public enterprise implies freedom on the part of any entrepreneur to enter any field of business and to compete with those already established therein for the favor of the buyers in the market.             Competition is a risk that the company has to face. What the company needed to do was to implement the right strategies to be able to overcome this competition. In the case of Carly Fiorina, she wasn’t able to guide the company to overcome this risk, as well as many others.   Risk is always present in private enterprise. Of greatest importance is the risk of complete failure – of bankruptcy – in which case the entrepreneur stands to lose all of his investment. In the case of the sole proprietorship or partnership he may possibly also lose his personal property and savings ( 2001). This is one risk that a company would never want to face. All other risks that are not properly managed would eventually lead to this. If Hewlett Packard was not able to make a good turnaround, it would have started to go bankrupt, or at least one of its branches would have.             This risk is apt to be greater when a new business is being launched than after it is well established. A similar danger exists, however, when an old concern fails to keep abreast of the times and loses out to newer, more wide awake competitors (2001). Herein we see again the role of competition in bringing a business up or down. And Mr. Hurd has brought Hewlett Packard up – from his reorganization of the company to integration, this new chief executive has definitely played his cards right.             At all times a firm must be aware of the risks that are inherent in competition – chances for loss through shifts in the price level, changes in style and fashion, and the appearance of substitutes on the market that sometimes render present models obsolete. Consumers could switch from an ordinary printer to a three-in-one printer although the ordinary printer is still a new one and has no defects. Also, consumers could switch to a cheaper printer of another competing brand but with the same quality. There is always a risk involved in the use of substitutes for materials formerly used.             The appearance of innovative competition in the past couple of decades has markedly enhanced the risk aspects of entrepreneurship in all economic areas. Two other factors are noteworthy as contributors to risk. These are automation, which involves the substitution of mechanical for human effort with a frequently resulting reduction in cost; and electronic data processing through the use of computers, which permits of the assembling and use of large amounts of vital information by management.             With the proliferation of technology-oriented businesses, it is appropriate to first take a look at the distinguishing characteristics of this type of enterprise. First is the nature of technology itself, as an asset of the business and also as a vital ingredient of the product delivered. The second characteristic relates to the various options available for profitable utilization of the technology assets, and the role that these options can play in the development of an effective strategy for the business ( 1998).   These two characteristics differentiate technology-driven businesses from others, such as retail establishments, restaurants, various service providers, and so on. The failure to recognize these very real differences can serve to limit the potential for success in these businesses. This is not so a problem with Hewlett Packard as the company knows that it is a largely technologically driven company.   For those companies unable or unwilling to utilize either or both of these factors, the risk of falling behind competitively may be serious. Good thing Hewlett Packard is already utilizing these. It is really a must for companies to be technologically adept.             Technology is one of the most accessible assets available to the entrepreneur. In addition to the obvious approach of inventing the technology oneself, there are many outside sources, such as other businesses, colleges and universities, government agencies, and individuals.   There are also, it should be added, a multiplicity of methods for tracking down technology from these other sources, including catalogs, trade shows, agents, and both for-profit and nonprofit institutions. It is also worth noting that while these assets are not usually available on a no-cost basis, the financial terms for access can be very attractive, with little or no up-front payment required in some cases (1998).             Probably the most common application of technological assets is to serve as the basis for the captive manufacture of a product for sale. In some cases, this involves a new product; in others, it involves a new, and presumably better, way of manufacturing an existing product. In either case, commercialization of the technology will yield financial benefits, either through sales of a new product, in the first instance, or through higher margins on sales of existing products, in the second instance. While both may entail technological risk, the new product option will also involve market risk. Nevertheless, this is the most common entrepreneurial approach to the commercialization of technological assets (1998).             Increases in technology have resulted in increased skill levels for some practices and processes, and deskilling in others. At Hewlett Packard, engineers must move from repairing individual personal computers and printers to working on networks, a significant jump in skill level (1999).             In an increasing number of instances, especially in this global economy, technological assets are finding use as “trading chips” in joint ventures or strategic alliances. Consider, for example, the case of an entrepreneur seeking to utilize a new technology on a worldwide basis.   In one’s home country the technology can be applied as discussed in the preceding paragraphs; however, in an area of the world where the company does not now operate, the approach is considerably more complex. One approach that has been taken by some entrepreneurs is to develop a joint venture with an organization that already has a market position in the area in question. The technology owned by the entrepreneur will serve as all or part of the equity contribution to the joint venture, and the partner’s market position will account for another portion of the equity in the venture. This, of course, is only one example of joint ventures (JVs) or alliances wherein an effective business strategy entails the use of technology instead of financial assets (2001).   Advances in technology have therefore dramatically altered the basis of competition in many industries, most especially that which deals with technology. The rate of technological change–that is, the introduction of new technology such as ‘personal computers, cellular phones, fibre optics, the Internet, massive databases, LANs (local area networks), artificial intelligence, virtual reality, satellite transponders and teleconferencing’ –has shortened product life cycles and development cycles (1999).   This is so true in Hewlett Packard wherein products become obsolete only in a manner of months. Consumers then are always looking for something new. What is bought six months ago could be considered by the consumer as obsolete and therefore would need a new replacement. This is not questionable since at the rate technology is driving change in our society, it is virtually everyday that new products are invented.   The speed of technological diffusion–the rate at which technological information is absorbed into the industry–is also increasing, encouraging copying and increased competition in the form of ‘me too’ players. These issues have large implications for organizations which are technology-intensive, such as Hewlett Packard.             In many large companies with diversified product lines, Hewlett-Packard included, the concept of decentralization has been extended to the point where each product line becomes the basis of a more or less semi-autonomous division. In such a situation the responsibility for designing, producing, and selling its product line and of making a profit is given to the division management. The General Motors Corporation, General Electric Company and IBM are just some of the companies that follow this practice.             The rationale behind this practice is that these companies have become too large and their product line too varied for a centralized management to supervise satisfactorily. Each division therefore acts as though it were an independent company.             All large companies, however, do not look with favor on such a practice of division within the organization. Other large companies favor the adoption of a functional type of control structure. With this sort of arrangement, a company’s physical operations may be dispersed, but the managerial control for all of its different operations is centralized. This means that a single sales force sells all of its different products and manufacturing plants are directed from the home office.             Such an arrangement focuses the responsibility centering on the president of the company. In a large company, this does not sound very good. This concentration of responsibility may overburden the chief executive with supervisory duties, leaving him too little time for creative thinking and acting. It also tends to create a shortage of potential managers because of the centralizing authority at the top.             What has contributed much to the success of Hewlett Packard when Mr. Hurd took over? Mainly it is his decision making process that has helped the company survive and prosper despite increasing competition. He all but made the right decisions for the company.   In the past few years a number of things have come into being that have brought the decision-making process into a sharper focus. Form the purely mechanical side, the rapid and extensive development of high-speed computers and data processing procedures have added immeasurably to the quantity of information available to the executive (2001).   This would specifically enable Mr. Hurd to base his decisions on far greater amounts of relevant data than ever before. By having vast amount of information regarding a certain matter, Mr. Hurd would be able to analyze and pick the right choice, thus making correct decisions which are for the good of the company.             The ability to make correct decisions in business has long been recognized as a prime attribute of successful management and there is therefore a need for inquiry into the decision-making process. With the growth of large corporations, with their vast resources in the areas of finance, productive capacity, and manpower, and the increased tempo of competition, the possible consequences of unwise decisions, both on the companies involved and on the economy generally, have served to focus attention on further research and studies on the topic (2001).             Hewlett Packard is seen by practitioners and academics as a people management benchmark, yet there are still concerns raised about integrating the rapidly changing business imperatives with the human resource systems to create a measure of continuity and consistency (1999).             Hewlett Packard could be described as having a unique ‘cultured’ soft model of human resource management, in that HR considerations were an intrinsic part of the corporate strategy and management style, rather than being grafted onto it. This created a situation where HRM permeated the culture of the organization, and the whole way in which people operated, becoming ‘owned’ by everyone, not the HR function itself–’the ownership of managing people and practicing the HP Way (which is already described in the previous paragraphs) is a line management-owned function’ (senior manager).   For instance, the Managing Director articulated the six key processes for the organization as ‘customer focus, planning process, order generation, product generation, order fulfillment, people fulfillment’. The emphasis placed in this model on development, fulfillment, and quality is indicative of the soft model.   In Hewlett Packard, people considerations were seen as a fundamental component of the business strategy itself. According to the case study, by making managers and the sales force more accountable and by encouraging cross-selling, the firm has increased the amount of extra products it sells alongside its hardware. The business strategy employed by Mr. Hurd focuses not only on processes but on people as well. This proved to be suited well to the company and its employees.             An important factor concerning the implementation of performance management processes is the degree of change the organization is undergoing and the experience of change the organization has had. At Hewlett Packard, operating in the computer business for twenty-five years has given the firm a long history of change management and a decentralized management style, which has resulted in a flexible performance management system, able to cope with changing circumstances.   With this continuity and consistency, the expectations of employees remain relatively stable. The enduring culture, exemplified by the HP Way, also provides continuity in terms of values which in turn reinforce desired behaviours (1999).             A number of factors appear to have contributed to this turnaround that is happening to Hewlett Packard under the management of Mr. Hurd. Apart from market changes, new product launches, and cost-cutting measures, the level of bureaucracy within the company was also attacked. A company that had been started by entrepreneurial engineers, advisers urged that it had become too centralized.   In addition, new ideas were being squashed if they appeared too unorthodox. Hewlett Packard’s response was to return to a decentralized structure that gave freedom back to the individual business units. This decentralization arguably helped one business division to take off in business terms and capture a significant proportion of a new product market ( 1999).             The achievements of an organization are the result of the combined efforts of each individual in the organization working toward common objectives. These objectives should be realistic, should be clearly understood by everyone in the organization, and should reflect the organization’s basic character and personality ( 1992). These sentences clearly mirror what is happening at Hewlett Packard under Mr. Hurd as chief executive.   Conclusion               Organization means that management endeavors to achieve its objectives by directing the efforts of the people under its supervision. This procedure is a necessity whether it be a large or a small company. This has been taken seriously by Mr. Hurd as chief executive of Hewlett Packard. While the success of a Hewlett Packard may be attributed to many other causes, the skills with which Mr. Hurd directs and manages the organization is one of the major factors in the positive end result.               Probably the most foremost responsibility of management at all levels, but especially top management – that of Mr. Hurd, is the making of decisions. In many, if not most, instances, the decisions that chief executive officers have involve the making of choices between two or more alternative courses of action. The company therefore rests on whether Mr. Hurd will choose the right decision or not. Thankfully, Mr. Hurd has enough experience and perhaps plenty of references that enabled him to make the right decisions and helping Hewlett Packard succeed.                         Credit:ivythesis.typepad.com

Case Study Analysis: Briefly identify Hewlett-Packard’s ‘strategic agenda’, i.e. what are the fundamental questions and problems that concern organizations and their successful development

Case Study Analysis: Briefly identify Hewlett-Packard’s ‘strategic agenda’, i.e. what are the fundamental questions and problems that co...

As Seen On Screen: Strategy Market Plan

As Seen On Screen: Strategy Market Plan       Executive Summary               ASOS is known of the most recognized online clothing store in the United Kingdom. It offers products that people often see worn by celebrities. As such, many people are encouraged to try out their items. In addition, the prices of their products are relatively lower compared to high street fashion. Because of these along with other factors, ASOS was able to grow. With the growth of ASOS over the years, it is important to ensure that it can be sustained. The fact that online shoppers and traditional shoppers differ in terms of concerns and behavior, it is critical for ASOS to study the purchasing behavior of their market segment to determine the kind of strategy that they need use to ensure success now and in the future. This research focuses on the various aspects of online retailing in the hopes of investigating the purchasing behavior of ASOS customers and formulating recommendation on how to keep the margin profit of the company on increasing.               For the past 50 years, the retail industry has been under numerous changes (2002). For example, the 1950’s saw downtowns as the center of retailing. People would often go downtown to avail of various products and services. This products and services included clothing, food, hardware supplies and banking services. A decade later, a group of retailers started offering their products and services in large department stores. The idea is to provide convenience to the shoppers. By creating a place were various retailers can offer their products and services, shoppers will no longer have to make several trips to different locations in order to purchase the things that they need. This means that retailers hoped to create a one-stop shop for their customers. As a result, big names such as Wal-Mart and K-Mart made big names in the retail industry. On the other hand, downtown or small scale and specialized retail outlets experienced a decline in the 1970s and 1980s ( 2002).               From the late part of 1980s to the early years of 1990s, a new kind of retailing came in being. Home TV shopping networks as well as warehouse clubs became very popular among consumers. If one-stop department stores aimed to provide convenience to their customers, Home shopping networks brought the idea of convenience to a completely new level. Instead of encouraging customers to drive to their stores, retails brought the stores inside homes and purchasing the desired products is as easy as calling a toll free number. On the other hand, warehouse clubs offered customers the opportunity to buy products in bulk and at discounted prices. Costco and Sam’s Club are some of the warehouse clubs that earned success ( 2002).               The changes within the retail industry continued well into the late part of the 1990s. Along with the success of internet, retailers were quick to recognize surfing the web as well as the use of other internet applications was fast becoming incorporated in the lives of many people around world. For this reason, they have decided to bring their stores online. The move to utilize the internet was a good decision in terms of marketing. Cable television took 25 years to reach approximately 10 million people, while computers took seven years to do the same. However, the internet was able to manage that feat in just six months. This means that retail store will have more chances of exposure if they have their own website.               Since the utilization of the internet for retailing purposes, many companies have been able to experience the benefits of bringing their businesses online. With this, a need was created to formulate strategies that focus on maximizing the potentials of internet. Nowadays, ecommerce, ebanking and other forms of ebusinesses are becoming a popular choice among the consumers and as such, it is also becoming a popular form of business for companies. Increase in sales are usually expected by companies when they launch an online store of host websites that offers their products and services.             In the retailing industry, etailing is also fast becoming the choice of companies. One of the companies that concentrate in advancing their etailing endeavor is As Seen On Screen 0r ASOS. They offer clothing and other fashion related items that are similar to designer fashion worn by celebrities but a t a lower price. They have a website where they post the products that they currently have. In addition, they show actual photos of celebrities wearing a similar item of clothing that are being sold on their site.               Case Study Despite the degree of success that ASOS was able to achieve over the years of their operation, there are still problems that they need to resolve in order to ensure the survival of their business. This is the rationale behind this paper. This paper will be presenting the conditions that ASOS are operating in as well as the various aspects that they need to focus on in order to maintain  steady or increasing follow of profit. These will be done in order to be able to formulate recommendations that will help the specified company in addressing the issues that surround their business. However, the findings of this paper as well as the recommendations that will be formulated have the possibility of being useful to other ebusinesses.   Statement of the Problem                 The problem of ASOS is generally related to the problem faced by most online retailers: the online consumer buying behavior. Not only does buying apparel online represent a new form of consumer behavior in the ‘computer-mediated shopping environment’ ( 1996), apparel online retailers also face intense competition. Attracting consumers with the limited resources available on the internet is a big challenge to online retailers like ASOS. Knowing the online consumer behaviors will let the retailers and managers of these companies formulate and develop effective strategies that will help increase the popularity and sales of clothing online.     Moreover, ecommerce is an expensive business but is also proven profitable once become effective. According to a survey, clothing belonged to the top six categories of holiday gifts in the USA during the 2000 Christmas season (e2000)  and about 8.4% of the total weekly online purchases in 2000 is the apparel category ( 2000). These results suggest that selling clothing online is an effective business especially if a company has marketing strategies that will help in the success of the online business.   According to a study of users who have bought products online, there are five main reasons why people shop through the Internet. These are convenience and ease of use; greater selection; better prices; easier comparison-shopping; and no sales pressure (1997).  On the other hand, there are also reasons why people are not attracted to making purchases online especially when it comes to clothing. The top four most frequently identified reasons why consumers are not purchasing online are ability to judge quality, security, privacy, and easier to purchase locally (1998 ; 1999). ACCID Test Actual Identity Leadership and Motivation   Basically, leaders have a common set of characteristics which includes single-mindedness, excellent communication skills, self belief, very strong sense of purpose and charismatic.   The leader’s behavior will demonstrate how that personality applies itself along the chosen purpose to give a behavior pattern in a given situation, with a leadership style, There are number of ways to categories leadership style; in one way lets look at the relationship set against the need to complete the task.   l   Authoritarian style where the leader simply tell the people to do the task without regard of their view of it. l   Delegation style. The leader feel the task is not important or not interested in the task, or feels that its beneath his dignity; he delegate it totally on others. l   Participatory leadership, the task is not important but the people are. The people with whom the task is done are important. l   Persuasive leadership, here the people and the task both are important. Therefore, to finish the task incentives and motivation are given. Here the team could be the part of the process of objective setting.   The leaders are employed to get the task done through the people they have control over. It is the responsibility of the leader to balance the set of objectives, irrespective of his seniority. All the conflicts, which arise due to this, will be resolved. There should be no breakdown or neglect in one or the other areas, because if it is so, it will affect the efficiency of the work. The prime objectives of the leaders are to: l   Achieve the task – to get the job done by planning, allocating resources, controlling the work done, monitoring against the plan and taking the necessary and appropriate corrective actions; l   Develop individuals – attending to personal problems, praising individuals, giving status, recognizing and using the abilities. And continuously working towards improvement of the individuals. . l   Build the team – setting performance standards, maintaining discipline, building team spirit, encouraging, motivating, giving a sense of purpose and training the people as well as at all time working to improve communication with the group; l   Achieve personal objectives – leaders should not forget they themselves have the responsibility to their own career and personal objectives, and that no team wants to be lead by the leader who does not show a degree of personal enthusiasm and ambition. Product Strategy The product line of ASOS is defined. The company knows exactly what they want to up out in their website. As the former name of the company suggests, the product line of ASOS is composed of clothing articles as well as other fashion related items that have been seen on celebrity fashion icons or trendsetters. The company’s decision to extend their product line to include beauty products can still be deemed as within the original intentions of the company. This is the case beauty products are now being considered by many, as a fashion must. A good skin is needed in order to make a certain look work.               Since the products of the company focuses on products that must be appealing to the eye of the customers in order to be bought, visual merchandising is important in conveying the aesthetics of the products that they are offering. Customers need to see that the clothing items that are being offered in the website were indeed “as seen on screen”. Like the conventional retail clothing outlets, ASOS does have a window to display their products. The pages of their website serve as the windows where their customers can see the products.    Communicated Identity Being both in the fashion and retail industry, ASOS needs to be able to meet the requirements of both industries in order to succeed. In relation to the fashion industry, ASOS must ensure that the items they are offering are in season. Being up to date, when it comes to the latest styles, is crucial for the case of ASOS. This is due to the fact that they are capitalizing on the trends that celebrities start. If ASOS is able to maintain this ability then the retail industry requirement can also be meet since trendy or in season clothes are more profitable than those that are not. This has been proven in the case stated earlier where ASOS had to sell out of season clothing at a discounted price. With this in mind, it is the objective of ASOS to offer and deliver the trendiest in season collection to their customers.             Another objective of ASOS is to provide a pleasant online shopping experience to their customer. It is important to associate shopping with being online for ASOS’ case. It is a fact that being physically involved in shopping brings about a different experience compared to shopping online. For example,   ASOS.com             The ASOS.com website could be improved through a variety of ways that would benefit both the company and the consumer.  For example if video and audio clips were added to some pages, this could increase the interest level for the browsing customer, which could result in increased sales figures.  Customer services could be improved through the addition of a live chat service on the website, providing the opportunity for customers to interact with retail staff directly about any questions or concerns they may have about their shopping experience.  Other issues that would need to be addressed within the ASOS.com website include increased contact with staff, faster processing of refunds and returns and an increase in transparency which could be achieved through more comprehensive information on the company itself.     Competitor Analysis     According to (2000), competition is important since it affects the success of a business venture. Proctor added that competition is more than just producing and distributing products and services that matches the needs of the consumers. Competition is about the company’s capability of positioning itself in the market so that they will stand out among the rest in the perception of the consumers.   In the case of ASOS, they do not have any direct competitors when it comes to clothing associated with celebrities. However, it is the case that do compete with  other clothing retailing stores such as Topshop and FIgleaves.com.             Positioning Strategy             The target market segment of ASOS is as defined as their product line. They target people who are eighteen to thirty years of age and who are internet savvy. Based on the questionnaires prepared and used for this research, the biggest bulk of ASOS customers are eighteen to twenty-two years. This age group represents fifty-five percent of the total ASOS customers. It is followed by people who belong in the age brackets twenty-four to twenty-nine and thirty to thirty-five who twenty percent of the ASOS customer population each. Lastly, people who are thirty-six to forty-two years old complete the population representation five percent of the total.   Figure 2: ASOS customer population by age groups               The result of the survey concluded that ASOS targeted the right age group for the products. This is the case since the surveyed revealed that eighteen to thirty year old customers are more open to buying the products that ASOS offers. Another reason for the bulk customers on the said age bracket can be attributed to the fact that people within this age group are more adept at with using computers as well as navigating the internet. In addition, they are also the ones who are part of the corporate world where everything is fast-paced that they do not have the time to go down town and shop for the clothes and other fashion items.               In relation to gender, eighty percent of ASOS shoppers are women, while only two percent are male as shown on figure 3 below. This is still according to the survey conducted for this research. This may be the case since most of the items that are being offered online are for women. In addition, the marketing activity of ASOS focuses on disseminating information to more women than men. 500,000 emails are sent to females twice a week compared to 100,000 emails sent to males only once a week.   Figure 3: ASOS customer population by gender   Offer Strategy               The success of ASOS is being owed to their ability to offer trendy clothes at significantly lower prices. However, there are still other factors that needs to be considered when discussing the success of ASOS as an online retail clothing store. Aside from the price of the products, the seasonability of the products being offered is also crucial. It is a fact that the fashion industry is always on its toes when it comes to innovation. Various collections come out on a regular basis depending on the season. There are winter and summer collections as well as spring and fall collections.   Conceived Identity Corporate identity is a valuable management resource because it affects every aspect of corporate life. A company’s image, reputation and managed perception, the three components of corporate identity, influence the performance of its share price, sales, acquisitions, divestments, recruitment and other activities. Establishing a clear identity has become a difficult task due to the trend towards cross-border mergers, the growing importance of environmental concerns and the increasing similarities between products and services. In the current situation of ASOS, it affects it corporate reputation in the US. However, there are some strategies which can be done to build up the ASOS reputation and credibility. Although the brand is only a part of all company actions, marketing communications vehicles such as advertising, direct mail, public relations, trade shows, seminars, and collateral material play an important role in communicating brand. Thinking of these activities as brand conveyors is a useful way to understand their role. They allow you to communicate the organization and brand drivers that make up the heart of the brand. Consistent with its objective to build up their reputation and credibility towards the customers, ASOS would develop a solid message platform that clearly and consistently communicates their product features and benefits in a way that incorporates its brand principle, personality, and associations. The overall strategy serves as a springboard to infuse brand messages fully into additional strategies. Strategies that pull messages to target audiences, by using third parties to help place ASOS’s messages in front of its target audiences. Secondly, ASOS would communicate would use third parties to communicate its messages and in order to establish credibility with all target audiences. Third parties include analysts, media, award givers, happy customers, and online newsgroups/list serves. Strategies to push messages to target audiences, by putting ASOS information directly in front of its target audiences, include the Use direct communications tools to seed brand to target audiences. Tools include direct mail, advertising, collateral material, web site, and current employees. From among the different tools of marketing communication and with ASOS current situation, we specifically use public relations to bring back the reputation and credibility of the products to its customers. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most favorable light. The goal of the public relations is to create, through the organization of news and advertising, an advantageous image for his client, be it a business corporation, cultural institution, or private or public individual; toward an end of the making of favorable public opinion, many research techniques and communications media are used. The earliest form of public relations and still the most widely practiced is publicity. The principal instrument of publicity is the press release, which provides the mass media with the raw material and background for a news story. The growth of modern public relations is generally attributed to the development of the mass media, which accelerated the spread of ideas and increased the importance of public opinion by giving more people access to current events.   Ideal Identity Timing Strategy               Based on the discussion earlier, the sales of ASOS increased significantly during the holiday season of 2004. This is the case because orders for products that will serve as gifts were in demand. In addition, a series of events take place during the holidays. Family reunions and countless parties are set to happen during this time of the year. This means that people will always be on the look out for clothes that they will be able to use during these events.               However, it is also expected that during the holiday season discounts abound. This means that consumers are also on the lookout for bargain deals. In the case of ASOS, they are able to meet the needs of their customers for ideal apparel at reasonable prices. As such, during the holiday season ASOS must be able to get the word going that they will be able to provide quality yet affordable wares for the people.             Activity Week 1 Week 2 Week 3 Week 4 Conceptualization of Marketing Campaign         Formulation of the marketing Campaign         Dissemination of the Campaign to target market segments             Computing and Category Management               Supply is not a problem for ASOS. This was proven in the past when they were able to meet the holiday shopping needs of their customers in 2004. This is the case despite the problems that they encountered in relation to their small warehouse. Now that ASOS was able to move a bigger warehouse, they will be able to maximize their potential and might be able to surpass their highest recorded sales in the previous years.               However, there is one issue that ASOS needs to resolve immediately. Otherwise, it might affect their sales in the future. From the time ASOS was launched until this day, they only offer clothing items up to size 12. This means ASOS is excluding a segment of the market that can offer them additional profit. This may also cause some customers to get turned off since this suggests that ASOS thinks only people with size 12 bodies have the right to wear celebrity inspired apparel.   Desired Identity Expanding New Values for customers worldwide The ultimate goal of ASOS’s sales activities worldwide is to satisfy our customers so that they will continue to come back for more ASOS quality products. That’s why they put heartfelt effort into our services, responding to changing values and increasingly sophisticated needs. They’re always working to improve the quality of our customer relations providing friendly and attentive sales, responsive service support, thorough maintenance and repairs so customer satisfaction constantly grows. ASOS also continues to develop sales and service systems best suited to community needs.   Customer Care and Service According to  (1999), Total Quality Management is the incorporation of all the functions and processes of the organization () to be able to develop the quality of the services and or/products that they offer. With this, it can be stated that customer relationship management programs are included in total quality management. The need to develop an effective total quality management is important due to various reasons. However, these reasons are still geared towards providing customers with the great business experience with the company.  It is also the case that total quality management views customer satisfaction in relation to customer retention and increase in the profits.   These are being considered by ASOS when they designed their website. They wanted to give their customers the kind of shopping experience that would lead them back to the website and make more purchases.     Management Organization of the Company’s Corporate Governance for Decision-Making, Execution, Supervision and Others Putting the emphasis on easy access to colleagues signals that involvement figures high in the corporate values. Then, placing top executives in an open office signifies the intention to have an open style, in which rank and status have no practical importance. The round tables indicate that decisions are only to be taken after full discussion among colleagues who are always on tap. The proximity of the desks establishes that lines of communication are to be short and easily opened. The classic Western office layout, based on the ‘behind closed doors’ principle, is the antithesis of visibility and delivers an utterly contrasting message. The corporate vision statement is like the founder himself, enormously practical:   Ø  Quality in all jobs – learn, think, analyse, evaluate and improve Ø  Reliable products – on time, with excellence and consistency Ø  Better communication – listen, ask and speak up   Developing a philosophy built on the experience of a practical engineer, the founding father had created a corporate culture that would go on working towards his objective nothing less than becoming and remaining the world’s best motor manufacturer long after his own active day. His influence, like the man himself, is still highly visible. And the visibility is inseparable from the success.   Misaligned Identities: actual and desired             ASOS is one of the leading retailers existing in the corporate world today. One of its leading features is etailing. Due to the far reaching grasps of the internet, etailing has flourished. However, ASOS has intended to further it influence in the retailing industry of the Far East by building a branch in one of Asia’s key and remote cities(desired identity). But the fact remains that ASOS is primarily an etailing (relies much on the internet) corporation, and that many of the countries in the Far East do not have advanced computer and internet services as the rest of the world. ASOS presented a key solution to this problem, they would build a material retailing branch. But this would thoroughly conflict with their actual identity, which is etailing.               SWOT Analysis Strengths             The strength of ASOS is its utilization of the Internet. Through the Internet, it has formed a definite market segment that is composed of mainly Internet users. A firm that limits its attention to fewer market segments can better serve those segments than those firms that influence the entire market. Moreover, its core focus, which is apparel, as worn by celebrities at affordable price gives them a marketing edge for it attracts customers right away. It also gives huge discounts and has broad category coverage.   Weaknesses             Online retailing in general is getting bad publicity nowadays such as poor delivery performance. Another weakness is that ASOS cannot guarantee specific product or brand presence. Internet selling is unlikely to be successful, as consumers like to try on clothes and see the quality of fabric and workmanship.   Opportunities Ecommerce channels now represent 11% of the total UK retail business, and record numbers of products are being procured vie the internet (2005). People are attracted by low prices and convenience.  In addition, they have integrated their everyday activities to technology and the Internet, including shopping. As the number of working women, who are ASOS core customers, continues to increase, they will not only need more clothes for work but are also more likely to be financially independent to purchase clothes.   Threats             Online clothing chains from overseas are successfully invading UK and at the same time, branded apparel such as Diesel, Guess and Zara are still popular among the market. Other purely online fashion etailers such as Yoox.co.uk, Brandalley.co.uk are also their main threats. Downturn in the economy could also cause buyers to cut back on overall spending.    Recommendations                 Based on the discussions made above, ASOS can better serve their customers if they ensure the requirements of the 7C’s as presented in the previous chapter are met. This means that they must be able to provide outstanding services to encourage relationship between them and their customers. In turn, this will led to customers who are satisfied and willing to do more business with them.               Based on the survey conducted for this research, ASOS customers the things that concern them when they are buying at ASOS are style, price and quality respectively. This means that ASOS must be able to meet these demands of their customers if they want to ensure continued patronage from them.               In addition, customers also want to see improvements in the website. They want more interactive type website. This means music and video clips are believed to be helpful in a customers’ decision to make a purchase. Furthered customer assistance is also being requested. Live chat is being considered by many customers. ASOS can actually provide this kind of service if they outsource it to call centers in Asia for example. It will be cheaper to outsource it than to create an in-house call center.   Credit:ivythesis.typepad.com

As Seen On Screen: Strategy Market Plan

As Seen On Screen: Strategy Market Plan Executive Summary ASOS is known of the most recognized online clothing st...

Instructions on Assessment

Wal-Mart Stores, Inc. (NYSE: WMT) was founded by Sam Walton in 1962. It is the largest retailer in the world and was the largest corporation in the world based on revenue as ranked by the Fortune Global 500 in 2005. It ranked second to Exxon-Mobil in revenue in 2006 Fortune 5000 list. Wal-Mart’s impact is hotly debated. Specific areas of controversy include the company’s product origins, treatment of employees and suppliers, environmental policies, extraction of public subsidies (corporate welfare), availability of prescription contraceptives at Wal-Mart pharmacy counters, and store impacts on local communities and businesses. [1][2] The controversy is covered in more detail in the Criticism of Wal-Mart article. Wal-Mart operates retail department stores selling a range of non-grocery products, though emphasis is now focused on the “supercenters” which include more grocery items. Wal-Mart also operates Sam’s Club, a “warehouse club” (similar to Costco and BJ’s) that sells discounted bulk merchandise to dues-paying members. In addition to its wholly-owned international operations, Wal-Mart owns a 42% stake in The Seiyu Co., Ltd. in Japan, with a proposed 7 million to increase its stake to 50%. This purchase has been approved by Seiyu Group shareholders and The Seiyu will be consolidated into Wal-Mart International in FYE 2006. In September 2005, Wal-Mart acquired 33.3% of the Central American Retail Holding Company (CARHCO), and in March 2006, increased its holdings to 51%. Wal-Mart Central America was formed from the 375 supermarkets and other store formats, operating in 5 Central American countries: Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. In the past, Wal-Mart operated dot Discount Drugs, Bud’s Discount City, Hypermart*USA, OneSource Nutrition Centers, and Save-Co Home Improvement stores. In 1990 Wal-Mart acquired The McLane Company, a foodservice distributor. In 2003 McLane Company was sold to Berkshire Hathaway. Wal-Mart stock is publicly traded on the New York Stock Exchange under the symbol WMT.           All about Walmart Commitment The philosophy that drives diversity at Wal-Mart is a natural extension of our core beliefs: respect for the individual; service to the customer; and strive for excellence. Diversity is a key dimension of our commitment to customers, suppliers, and associates: treat them with fairness and respect, be their advocates, be sensitive to their concerns, value their differences, and serve and support them the best we can. We are committed to increasing and promoting the sourcing of merchandise and services from minority- and women-owned businesses. Mission Statement Our mission is to enhance and integrate our supplier diversity programs into all of our procurement practices and to be an advocate for minority- and women-owned businesses.   What We Expect All suppliers must have: competitive prices, financial stability, proven success in the marketplace, and offer excellent products and/or services. Woven into our story you’ll find thousands of suppliers who have created their own success stories through their work with us. Our large number of locations creates an attractive opportunity for suppliers to get their items in front of the nation and the world. From small independent entrepreneurs to Fortune 500 companies, the benefits of a Wal-Mart partnership are mutual. First, the demand for their products creates jobs and improves the way of life in the communities where those suppliers operate. Then, as suppliers keep up with demand, we can provide quality products and services to our customers at the absolute lowest prices, which, in turn, improves their lives, too.   Reports on standards for suppliers Wal-Mart established its Ethical Standards program in 1992 and has worked to strengthen and make it an effective tool for improving conditions for workers in our suppliers’ factories that make products sold in our stores. Wal-Mart does not own, operate, or manage any factories. Instead, we purchase merchandise from suppliers located in more than 60 countries. Our Ethical Standards team is dedicated to verifying that these suppliers’ factories are in compliance with our Standards for Suppliers. These Standards cover health and safety, environment, compensation and benefits, working hours, forced and underage labor, discrimination, compliance with applicable laws and regulations, and the right of audit by Wal-Mart. Our program covers factories from which Wal-Mart directly sources products and suppliers’ factories in five high-risk categories: apparel, footwear, toys, sporting goods, accessories and select proprietary brands. We audit each of these suppliers’ factories at least once a year. In 2005, Wal-Mart’s Ethical Standards auditors and third party audit firms conducted more than 13,600 initial and follow-up audits of 7,600 suppliers’ factories making products for our stores. We also trained more than 11,000 suppliers and their factory managers to increase their familiarity with Wal-Mart’s Standards for Suppliers and to encourage the use of accepted practices. Wal-Mart and other international companies work proactively to improve working conditions in developing countries. We find deficiencies exist at the factory level. Globally, some of the most commonly observed problems relate to benefits such as pensions, medical, accident and unemployment insurance not being paid. Other frequent issues include workers not being paid for all hours worked, the use of false books, and incomplete or insufficient documentation. Rather than discontinue accepting goods from suppliers’ factories where these problems occur, we believe it is better to work for improvement Ð a position widely endorsed by the ethical standards community. If we find that any of our suppliers’ factories are unwilling to correct problems after multiple attempts, we cease accepting products from that factory. For certain serious problems or an uncooperative attitude by such factories, we stop accepting products from them immediately. Wal-Mart is committed to working with its suppliers on steady improvement of workplace conditions. This requires better production planning and internal supply chain management, educating workers, and training factory managers. We also engage with stakeholders in the ethical sourcing community to identify additional ways to achieve and accelerate improvement.  Full 2004 Report on Supplier Standards PDF (for broadband users – 43MB PDF), or view parts 1 – 4 below.  2004 Report on Supplier Standards PDF – Part 1 Contains message from Lee Scott, Executive summary, report objectives, background, scope, approach, training, and information on The Ethical Standards Team.  2004 Report on Supplier Standards PDF – Part 2 Contains 2004 program results, global challenges and trends and 2004 direct import violations.  2004 Report on Supplier Standards PDF – Part 3 Contains 2004 program enhancements, unannounced audits, stakeholder engagement, national brand pilot program, proprietary brand program, the Wal-Mart Ethics hotline, and third party service providers.  2004 Report on Supplier Standards PDF – Part 4 Contains 2004 future initiatives, unannounced audits, stakeholder engagement, proprietary brands program, the Wal-Mart Ethics hotline, audit scope expansion, standards for suppliers, color code changes, disapproved factors, underage worker violations, increased ES staff and conclusion.  2003 Report on Supplier Standards PDF Wal-Mart believes that the conduct of its Supplier Partners can be transferred to Wal-Mart and affect its reputation.  Supplier Standards Please print and complete this document. Submit the signed document along with the Supplier Agreement.                                 Instructions on Assessment:   Assignment Brief.   Your employer, WBM&M Management Consultants, has seconded you to advise the Rolland’s Manufacturing Company about the potential impact of securing a Supplier Contract from the Wal-Mart Company.  Exploratory talks have already begun with the initial intent to supply clothing products to the UK market through ASDA, Wal-Mart’s UK subsidiary.  Within two years it is hoped that this will be expanded to supply Wal-Mart outlets throughout the world with a limited range of medium-priced, high quality outdoor wear.   Three years ago the company was struggling to retain market share in competition with cheaper clothing products being imported into the UK from the Far East.  At that time the Board made a strategic decision to move its products upmarket in terms of quality because it felt that it could not compete at the lower end of the market against lower wage economies.  Over the last couple of years the Rolland’s Design Team have developed an innovative range of outdoor clothing that is both stylish and technically advanced in terms of the materials used and in the “build quality” achieved in the manufacturing process.  More impressively, the new garments can be produced at a very competitive price even though they have many of the all-weather performance qualities of much more expensive outdoor clothing that is currently available.  This makes the new products unique in the market and both ASDA and Wal-Mart want to retail the new range of clothing in their outlets.   Even so, early negotiations with the Wal-Mart group have already indicated that Rolland’s may have a problem in sustaining a long-term relationship with such a big player in the retail sector.  The attached review (appendix A) was prepared only six months ago and should give an idea of their current approach to managing manufacturing operations.  The hard-driving management style is not untypical in this very competitive sector of the economy and has sustained the company for many years as it has grown from its small beginnings to its present size of 300 employees.  Although Wal-Mart have been impressed by the products they are less happy with their initial impressions of Rolland’s manufacturing capability, regarding them as being very far from the type of world-class organisation with which they would prefer to work.    Rolland’s have declared an ambition to become a “world-class” manufacturer capable of operating on a global stage.  The company has always been regarded as a dynamic, driven organisation and was largely successful in supplying the UK and European markets until the increasing influx of cheaper overseas products began to erode its market share in recent years.  The very traditional organisational and management culture that has served it so well in the past now seems ill-suited to its chosen strategy of trying to achieve the type of organisational excellence that would make it the chosen partner of major players in the retail sector.  There are real question marks over Rolland’s ability to produce consistently to the quality standards demanded at the premium end of the market, especially at the growing volumes and tight deadlines that are also typically required.   The possibility of becoming a preferred supplier to ASDA and its parent company, Wal-Mart, has focused the minds of Rolland’s Board.  Now they wish to address what the implications of such a move would be for their company: on the one hand they expect more business and increased profit potential, on the other, they anticipate increased strain on their manufacturing and supply chain capability.   Your task is to prepare a briefing paper for the Rolland’s Board on the implications of becoming an ASDA and Wal-Mart supplier over the next five years.  You should research Wal-Mart to examine how it works with its current suppliers and what it expects of organisations that seek to serve its extensive customer base.  Your report should examine what Rolland’s might be expected to do in order to manage its inbound and outbound supply chain to meet Wal-Mart’s exacting standards.  Include in your review discussion of the operational issues that Rolland’s would have to address and how they could bring their operations up to the required standards of performance and then maintain these standards consistently over the long term.       Your report should address the following key themes:   1)            Lean operation in manufacturing and supply and the growing need for agile responses to market demands.   2)            Strategies for managing Quality in every element of Rolland’s supply chain, internal and external, inbound and outbound.   3)            The benefits of cross functional approaches within and between organisations.   4)            The need for strategic partnerships in modern supply chains.   5)            The impact of modern Information Technology to plan and co-ordinate materials flows across global supply chains.   6)            The need to manage the environmental impact of manufacturing and supply chain operations and to address other ethical issues affecting organisations operating across international boundaries.   You should demonstrate an appropriate use of theory in your work, but the report must be aimed at the specific situations faced by Rolland’s in its desire to move into this ‘major league’ contract.     Note: Your report is one of several being considered by the board in its strategic planning process.  It is not meant to be a definitive document; rather it is meant to stimulate thought and discussion by the senior management team.  There is room for intelligent speculation as well as detailed analysis.   Your discussion document should be presented in the form of a 3000 – 3500 word, structured report and should be submitted to the undergraduate office not later than Tuesday 16th May 2006 at 4.30 p.m.   (You are NOT allowed to exceed the upper word limit.  You will be penalized at the rate of a 1% deduction from the mark awarded per 100 words over the upper limit.  Referencing and appendices do not contribute to the word count.)      (Some basic instruction if required here)   Referencing your work   The Harvard method of referring to publications and of arranging references uses the author’s name and the date of the publication. References are listed at the end of the text in alphabetical order of author’s name.  The general format of a journal reference is shown below:     Author/s name and initials are listed first, followed by year of publication in brackets.  Then we have  the title of article in quotation marks and the journal where article appears written in italics.  Finally, we have the volume and issue Number (in brackets) along with the pages where article can be located.   For further information, including advice on how to cite information from the web, access the following website addressing frequently asked questions in relation to the Harvard referencing system.   http://northumbria.ac.uk/sd/central/library/ir/orginfo/   Follow the link to ‘Cite them right’ on the right side of the     Appendix A.   Note:  The Board is ambitious to supply the Wal-Mart Company and they are aware of the need to develop their organization to something approaching “world-class” standards in manufacturing and supply chain excellence.  Your review is meant to alert them to what this might mean in terms of the company’s operating policies and procedures, including their relationships with their own suppliers.   Rolland’s Clothing Co. Ltd.   The accompanying brief report was a preliminary analysis carried out by a firm of consultants called in to examine the declining profitability being experienced by Rolland’s Clothing Company.  John Bored, senior manufacturing consultant, prepared the report.   Rolland’s Clothing Company.   Preliminary findings.   Prior to undertaking a detailed analysis of Rolland’s manufacturing set up it was considered useful to conduct this brief survey of the current situation within their manufacturing unit.  The findings are based upon a series of formal and informal interviews carried out on managers and workers within the Gateshead factory.  Direct observation of the processes and simple questioning of various operatives was also used.   First impressions   The first visit to the clothing factory was primarily to gain an immediate idea of how well it was organised and run.  The overwhelming impression was one of chaos, with work areas being crowded and disorganised and the workforce either being subjected to immense pressure to increase output, or sitting waiting for additional batches to be provided by harassed supervisors and progress chasers.   Even this cursory inspection could identify huge amounts of Work-in-progress (W.I.P.) cluttering up the work area and much of the other available space.    Supervisors and progress chasers were much in evidence checking the batch labels trying to keep track of the many orders currently in the system and also trying to expedite orders that were behind schedule.    Occasionally the factory manager could be heard intervening to push batches through the system in response to customer complaints or pressure.  She did this even where it meant physically removing other batches from the assembly units and resetting the machines.  When the section workers complained about the double handling and double setting up that this caused, they were told that the customer was too important to be upset and that failure to fast track the orders concerned would inevitably lead to lost orders or no repeat orders.   Although there were many notices exhorting the workforce to “Think Quality!” it was also evident that final inspection had to reject a significant percentage of the completed garments.  Some of these were sent for corrective work, some were set aside for sale as ‘seconds’ and some were simply classed as rejects for scrap.   Completed orders were sent to the despatch warehouse, which doubled as the incoming material store, from where they would eventually be forwarded to the end customers.  This unit was also overcrowded with materials and showed little evidence of systematic organisation.  Many completed orders seemed to have been here for several weeks.  Other rush orders were being packaged and despatched almost from the end of the production lines.   Production planning seemed to consist of feeding the orders into the system on a ‘first come, first served’ basis and then rushing around trying to push orders as customers became increasingly irate, or desperate, in trying to get their finished garments out of the factory gates.     One commonly quoted problem area was in the late delivery, or non-delivery, of urgently needed production materials.  Some of the rejection problems at the finished goods inspection were directly attributable to material faults that the machinists had failed to conceal by careful selection and sewing.  The use of the sometimes sub-standard cloths and incorrect thread types was justified on the basis that it was “that or nothing at all” since replacement supplies were late.   Additional pressure was being exerted on the system by frequent machine breakdowns in the production area. Maintenance staff were often forced to remove sewing machines from the production area for repair, temporarily replacing them with reconditioned old machines from the maintenance stores.  These replacement machines were slower and less accurate than the latest models that operators normally use, and caused much friction because they depressed bonus earnings whilst they were in use.   All of the direct production workers were on individual incentive schemes: the more they produced, the greater their earnings.  This leads to a certain amount of friction in the allocation of jobs, some of which were regarded as ‘good earners’ whereas others seemed to make the achievement of top bonuses almost impossible.  Further animosity was evident in the access to the range of industrial sewing machines in use throughout the production lines.  Some of the machinery is ‘state-of-the art’ technology and seems to confer great advantage in increasing earnings, whereas other equipment is distinctly past its best and slows the workers down considerably.  Great status seems to be attached to the luckiest workers who are allocated the newest machines, and there is a noticeably competitive air about increasing individual performance so that an operator can progress to the ‘elite’ group who get the best machines.    Management also seem to encourage rivalry between sections by publishing current performance figures on notice boards showing which section is achieving highest outputs.   Staff comments   At first staff were very suspicious of our consultants and consequently reluctant to engage in conversation.  When they did eventually begin talking they were constantly checking over their shoulders to see if management or supervisors were observing them.    The supervisors were especially guarded in their comments seeming to regard open discussions about problems as being a sign of weakness or as potentially threatening to them in terms of possible comeback from senior management.   Managers were generally very upbeat and positive with a strong focus on achieving high production.  They were all quite aggressive in their attitudes to front line staff, insisting that they had to be driven to reach the demanding production targets.  They constantly referred to the declining profitability of the factory and the need to squeeze even higher levels of productivity from the workforce.  It seems that only highly motivated and strong-minded individuals had any prospect of reaching manager level.                “Only the best and most dedicated can cut it here as a manager.  Sewing machine operatives need firm treatment and clear management if targets are to be met.  In the clothing manufacturing business there is no room for sentiment:  workers have to shape up or ship out!”                                                                         (Quote from a manager.)   Production workers showed a great deal of resentment at the ever tightening production targets and the constant pressure to work harder.               “What’s the point of killing yourself to meet unrealistic targets?  Even if you do manage to meet the bonus target management is straight down here cutting the time allowances.  And they even have the cheek to complain if there are slight defects on the garments!  What do they expect when we are asked to work with poor materials, cheap thread and useless sewing machines?  The machine I have to operate is worse than the one I have at home.  Whenever I mention these things to the supervisor she tells me to stop complaining and that it is our job to make do with the materials provided.  I wouldn’t care but it is obvious from the way management is always chasing around that they cannot even control the batches of orders in the system.  If they could, our lives would be a lot easier; we could get on and reach production targets instead of constantly chopping and changing the batches to let through the rush orders.  It seems to me that all of the orders are, or eventually become, rush orders.  If you ask me, it is their inability to organise things that causes all of the problems.  If its not that it is the Sleeving-In section making so many mistakes that makes our job twice as hard.  I don’t suppose that you can blame them though, they are just trying to make their bonus too.”                                                                                     (Sewing machinist.)   The first line supervisory staff clearly feel that they are caught in the middle between the workers and the management and were almost as frustrated as the production staff.               “I am not sure that I was wise to accept promotion to this job:  it is a thankless task.  We are constantly being harangued by senior management to achieve higher production and at the same time they are always coming down into the production areas and interfering with the schedules.  They think nothing about altering our work schedules at a moment’s notice to push through late orders or special deliveries.  If you complain you are told that you have to be flexible and that the customer is king.                         The worst part is having to deal with the staff.  I didn’t realise how awkward, and how militant they could be until I got this job.  Perhaps it was jealousy that I got promoted:  they certainly don’t like any social contact now that I am on the other side, so to speak.  Not that it bothers me too much:  I knew when I took the job that I would have to be quite tough with them – it goes with the territory I suppose.               I guess that I was promoted because I am a little bit more intelligent than the average production worker.  They don’t have to think too much do they?  All of the key decisions are taken by us because we have the experience and the brains and the motivation to get things done.  They seem to be happier when things are going wrong so that they are held up.  Can’t they understand that their jobs depend upon us being profitable!”                                                                                     (A supervisor.)   Overall, the atmosphere throughout the factory is a sort of ‘disinterested briskness’.  Staff do their jobs but without enthusiasm.   When the factory manager was questioned about this she seemed quite unperturbed.               “As far as I am concerned, it is quite simple; staff come to work and receive a fair day’s pay – I expect a fair day’s work in return.  They do not have to like it as long as they perform their duties.  Good heavens, I don’t always enjoy the work and the pressure of this job but I know that it has to be done, so I get on with it.  That is why they pay me!  It is not complicated, and it does not require us to win their ‘hearts and minds’.  As to the gripes and groans you have heard, I am sorry, but we have to be flexible.  If everyone works hard and is prepared to be flexible about the machines, the orders and the materials, the whole job will go smoothly.  That is what I do and I expect no less from my staff.”   Conclusions   Although this is just a preliminary survey rather than a complete analysis I think it reveals more than enough to justify a more substantial intervention in order to review and develop Rolland’s Clothing and return it to long-term profitability.   John Bored, Manufacturing consultant. WBM&M Management Consultants             Appendix B.     Examples of research resources .   http://www.asda.co.uk/   http://www.walmart.com/   Blatherwick, A. (1998), ‘Vendor-managed inventory: fashion fad or important strategy?’, Supply Chain Management, Volume 3, Number 1,  pp. 10-11.   Hendrickson, M., Heffernan, W. D., Howard, P. H. and Judith B. Heffernan (2001), ‘Consolidation in food retailing and dairy’, British Food Journal, Vol. 103 No. 10, 2001, pp. 715-728.   Siau, K. (2003), ‘Interorganizational systems and competitive advantages- lessons from history’, Journal of Computer Information Systems, Fall, pp. 33-39.   Bloom, P. N. and Perry, V. G. (2001), ‘Retailer power and supplier welfare: The case of Wal-Mart’, Journal of Retailing, 77, pp. 379-396.   Hayes, R. H. and Upton, D. M. (1998), ‘Operations-based strategy’, California Management Review, Vol. 40, No. 4. pp. 8-25.   Kristensen, K. , Juhl, H. J. and Ostergaard, P. (2001), ‘Customer satisfaction: some results for European Retailing’, TOTAL QUALITY MANAGEMENT, VOL. 12, NO. 7&8, pp. 890- 897.   Han, D., Kwon, G., Bae, M. and Sung, H. (2002), ‘Supply chain integration in developing countries for foreign retailers in Korea: The Wal-Mart experience’, Computers & Industrial Engineering, 43, pp. 111-121.   Internet Links: <http://www.amrresearch.com/Content/Topic.asp?valueid=410&year=2004&month=7&cmbmastertype>=     You may have to register with deloitte:   http://www.deloitte.com/dtt/cda/doc/content/dtt_research_walmarttsunami_062703.pdf   Note:   Wal-Mart is an organisation about which much has been written in various academic journals and textbooks, as well as more mainstream news and business media.  Careful research will give you significant insight into their ways of working to maintain their already impressive position as a leading retail organisation.   You can also research the concept of business excellence in supply chain and operations management and what it takes to become a world-class manufacturer capable of delivering quality products to leading retailers.   Credit:ivythesis.typepad.com

Instructions on Assessment

Wal-Mart Stores, Inc. (NYSE: WMT ) was founded by Sam Walton in 1962. It is the largest retailer in the world and was the larg...