1. How has the organization performed in its implementation of the strategy?
Customer perspective: Low performance
No detail about customer satisfaction, repeat business, market share, product loyalty in case fact. However, sales in cornerstone brand Bonds fell, Kmart replaced Bond with its home-brand might indicates the decreasing of customer loyalty.
Troubled footwear, outwear & sport business
Internal process perspective: low to medium performance
Profit margin and EBITA improved strongly indicate that the focus on simplify business operation and cost saving has delivered results. This is despite Pacific Brands exposed the impact of rising costs for cotton, ...view middle of the document...
2. What challenges are the organization is likely to face, or is experiencing, in implementing its strategies?
Pacific Brands underwent a transformation which moving away from manufacturing industry to a brand marketer. Pacific Brands is likely to face/experiencing the following challenges:
Communicating vision and gaining understanding, commitment and coordination
According to Herbiniak, poor communication, a lack of commitment, lack of buy-in and ownership of the strategic plan from key managers and employers are the major impediments for the task of strategy implementation.
Pacific Brands has rebuilt a relative new talent experienced team which not only has the new capabilities to transfer to a brands marketer, but also the ownership and commitments to the transformation strategy.
However, it seems that communication didn’t carry properly with people involved when closing down 10 local factories and cutting about 1800 jobs. Also increasing Sue Morpher’s salary to a high level at the same time caused criticism and resistance of the changing.
The transformation required coordination or alignment between Pacific Brands’ strategy and its functional units, processes and systems, especially with its information systems. Apparel manufacturing industry is a labor-intensive industry which has a different capacities requirement with a brands marketer. It requires new shared value, new organization structure, new information system and new capacities to align with it during the implementation.
Politics & resistance
Politics arises when conflict between internal rivalry. On the one hand, a rational force requires employees to act openness, communication and align with the written implementation plan. On the other hand, political forces drive employees to concern internal rivalry and the sensitive elements forming as invisible plan containing the implicit strategy. Therefore, gaps can emerge between explicit plans & the reality of the business and people involved might choose to retain information, service communication and caution.
Resistance occurs because of habit/inertia, fear of unknown & loss of security, limited implementation focus, loss of resources or maybe the orgnisation’s present cultural and attitude.
Pacific Brands is changing its stage in the industry value chain from a manufacturer to a brands marketer. The diversified changes require new capacities be acquired to be a brand marketer. This threat many people who might lose their jobs, power, resource and security.
In order to overcome politics and resistance, Pacific Brands need to recognize and act upon it constructively and early in the implementation process. The company should have accurate diagnosis of the organisation’s people, structure and technology that identifies potential areas of resistance to the implementation effort.
In the dynamic global complexity environment, the organization and market are too...