Retrenchment Case Studies PDF

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Ret r enchment Sony( pr obl emsf r om t heeconomy) : Sonyhasbeensuffer i ngbecauseoft hest r engt hoft heYen,maki ngi t spr oduct smor e expansi v ei nt er nat i onal l y . Di sr upt i oncausedbynat ur al di sast er s . Fi r m hasbeent oobur eaucr at i ci nt hef aceoft ec hnol ogi cal changef r om Appl eand Samsung. Sonyhasdi v er s i fiedi nmanyi ndust r i esandpr oduct s .TVdi vi si onhasmadeal ossf ort he l ast8y ear s . “ Sonyhasov erext endedi t sr eachi nt ononcor ebusi nesses. ” Shar epr i c ewasbel ow1000Yenf ort hefir stt i mei n31y ear s . Empl oy ednewCEO Kaz uoHi r ai ;wi t ht heobj ect i veofr et ur ni ngt hefir mt opr ofitt hi sy ear af t er4y ear sofl oss. 10, 000j obs( 6%)wi l l becutov ert henext12mont hs. Wi l l cutnonpr ofit abl esect i onsoft hebusi ness. TVwi l l bek ept ,butfix edcost swi l l becutby60% andoper at i ngcost sby30%. Wi l l nowf ocusongames,camer as,smar t phonesandt abl et s. Noki a( notcompet i t i v e) : Noki awast hel eadi ngmobi l ephonecompany . Ri v al shav eent er edt hemar k etwi t hhi ghendsmar t phones. Launc hont hei Phonei n2007hascutNoki a’ smar k etv al ueby$88bn. Unabl et ok eepupwi t hi OSandAndr oi d. CEO di dnotk eepupwi t ht hec hangi ngmar k et . Causedbycul t ur al pr obl ems : Manager shav ewor k edf ort hebusi nesst hei rwhol el i ves. Masc ul i necul t ur ewi t hhi ghego-deal shav ebeenknownt of r equent l ybebr ok er edi n st eam r ooms ! Lackofi nnov at i onsandl engt hypr oductdevel opmentt i mes . Lackoff oc us-t oomanypr oduct s . Noki awast ool ongs i ght ed,andf ai l edt oseechangei nt hemar k et . Appoi nt ednewCEO St ephenEl op. I dent i fiedt heneedt obui l dan‘ ecosy s t em’ e. g.appl ewi t hal l i t spr oduct sf ocusedar ound t heappst or e,Andr oi danandr oi dmar k etpl ace. Hehasexper i encei nsof t war eandwebdesi gn-ak eyar eaofweaknessf orNoki a. Havecl os edt hei rundesi r abl eSymbi ans of t war eandsoughta3r dpar t yone. Havej oi nedwi t hMi cr osof tt omak easmar t phonet hatt ar get saffluentUSandUK cust omer swhot r adedt hei rmobi l esf orBl ackber r y’ sandi Phones . Hi st or i cal l ybeenweaki nt heUS,r el i edont hes t r engt hoft her estoft hewor l d-f ort hi s r easonsl ownot i ci ngdemandf ors mar t phonest her e. Dev el opedt heLumi nasmar t phone-sol d1mi l l i oni nfir stquar t erof2011compar edwi t h Appl esel l i ng1mi l l i oni Phone4St hedayaf t err el eas e.Pr ovest her ei sapr obl em of r eput at i on. St i l l made$1. 2bnl ossi nQ12012. 15, 000j obcut st obemadet hi sy ear . ThomasCook( changei nconsumerdemand) :

Changei ndemand-hol i daymak er snowwantmor eper sonal i zat i oni nhol i day swhi chhas becomemuchmor eeas ywi t ht hei nt er net . Pr evi ousst r at egyofcostl eader shi pwi t hl owoper at i ngcost s ,hi ghass ett ur nov erand cont r olov ert hesuppl ychai nnol ongereffect i v e-needt odi ffer ent i at e. Theywer esuffer ei ngahugecas hflowpr obl em,ands al esdr opped30% oncet hi swas madepubl i c-GBP1bndebt . Cl osi ng200of1350s t or esandcut t i ng1000j obs. Shar epr i ceshadf al l enf r om 300pt o15pi n2011. Seekst oc utGBP35m pery ear . Empl oy eeswi l l nol ongerbeal l oweddi scount sonhol i day s. Wi nt ercapac i t ybei ngcutf r om 41t o35ai r cr af t s . 500hot el sbei ngr emov edf r om cat al oguet of ocusont hemor epr ofit abl eones. Consumerconfidenc ei sl owduet opol i t i cal cr i s i si nGr eeceandEgypt . Hewl et t Packar d( t echnol ogi calchange) : i Padt abl eti sr educi ngHP’ ssal es. Wantt of ocusonasi mpl erbusi ness-c ut t i ng27, 000st aff( 8%)-wi l l cutcost sby GBP2. 2Bnpery ear . Cal i f or ni abasedHPr epor t eda31% f al l i npr ofit si nt hesecondquar t ert o$1. 6bn. Revenuei nt heper i odf el l 3% onay earagot o$30. 7bn. Consi der i nganexi tf r om t hePCbusi ness. Pr obl emsf ol l owedf ai l ur esofi t st abl ett or i v al t hei Pad. Thor nt ons( changi ngconsumerdemand) : Havebeenchangesi nconsumerbehavi or-hi ghst r eeti ssuffer i ngbadl yduet oi nt er net r et ai l . Weaknessi nhi ghst r eetf oot f al l . Thor nt onst ohal v ei t snumberofst or esf r om 364. 1000j obst obecut . Sal eshadf al l enby12. 6% -sal esofsuper mar k et sgr ew25% att hesamet i me.

Sust ai nabi l i t y Cooper at i vegr oup( met hodofdi ffer ent i at i on) : Cr edi tcr unchcaus edconsumer st oquest i ont hecapi t al i stmodel -r ecessi onpr ovi desCoopt ogr owbyt r adi ngonet hi cal condi t i ons . St r uggl i ngt ocompet ewi t ht hebi gsuper mar k et s,neededt ochange. Wor k sont hest r at egyofhavi ngmember swhoi nvesti nt ot hebusi ness-notaPLC. Goalofbei ngt hemostsust ai nabl ebus i nessi nt heUK. Local st or eswi l l t het hef ocusf or10, 000communi t ypr oj ect spery ear . GBP5m f orcommuni t ypr oj ect s. Hi ghf ai r t r adeav ai l abi l i t yi nshops . Al l pr oduct st hatcanbemadef ai r t r adewi l l beby2013. Oper at i onalemi ss i onswi l lbecutby35% by2017. GBP30m bei ngi nvest edi nt oani nspi r ey oungpeopl epr ogr am by2013. Heal t hi erchoi ceswi l l beoffer edatt hesamepr i ce. Cooper at i vebankwi l li ncr eas ei t sl endi ngt ot hedev el opmentofr enewabl eener gy r esour ces. Mar ksandSpencer( cut scost s) : Pl anA-CSRt obecomet hemostsust ai nabl er et ai l erby2015. 180commi t ment st ocommuni t i es,t ackl i ngpov er t yandr educi nghar mt ot heenvi r onment wer emade. 95ac hi eved,77onpl an. 2mi l l i oncust omer si nv ol v ed. GBP70m addedi nr ev enuebecaus eofi t . 180, 000peopl er ecy c l edt hei rc l ot hesi nt heOxf am Cl ot hesEx change-moneyoffv oucher f ordonat edc l ot hi ng. Ov er1mi l l i oncust omer sboughtpr oduct st hathadachar i t abl edonat i oni ncl udedi nt he pr i ce. Savi ngscamef r om: Bei ngmor eener gyeffici enti nst or es-13. 5m Usi ngl essf uel-2m Hangerr ec yc l i ngandr euse-1m Packagi ngr educt i ons-11m Thi smoneyout wei ghedt hemoneyi nv est edi nt ot hepr oj ectandpr ov est hatasust ai nabl e busi nesscanbepr ofit abl e. Appl e( badpr ess) : Appl euseFoxConnt omanuf act ur et hei ri Pads,i PhonesandMaci nt oshcomput er s . Thesehav ev er ypoorwor ki ngcondi t i ons. Peopl ear epai dv er yl i t t l eandf or cedt ol i v ei ncr ampedcondi t i onswi t hmanypeopl ei na r oom. Cust omer sov er l ookpooret hi cal condi t i onsf orAppl e’ si nnovat i v epr oduct s. I ndependentaudi tbyFai rLabourAssoci at i on( FLA)f oundmul t i pl evi ol at i onsofl abourl aw ands i nceAppl ehav eagr eedt oi mpr ov econdi t i ons. Wor k er swer ef or cedt owor kunpai dov er t i me.

St ar bucks( genui neconcer n) : St ar buckshav esetupf ar mersuppor tcent er si nEt hi opi a,Rwanda,Tanzani a,Chi naand Cost aRi ca. Pr ovi dessuppor tt ocoffeef ar ms ,hel pi ngt hem t oi ncr eas et hequal i t yoft hei rcoffeeand t hei rpr ofit abi l i t y . Suppor tf ar mer sfinanci al l ywhent heyhavenor ev enueduet ot heseasonal i t yofhar v est . Hel pcommuni t i essust ai nabl yt hr i vef r om coffeef ar mi ng. $14m pr ovi dedsof ar .

Technol ogi cal Change Noki a( f ai l edt onot i cechangei nt hemar k et-compl ac entonsuccess) : Noki awast hel eadi ngmobi l ephonecompany . Ri v al shav eent er edt hemar k etwi t hhi ghendsmar t phones. Launc hont hei Phonei n2007hascutNoki a’ smar k etv al ueby$88bn. Unabl et ok eepupwi t hi OSandAndr oi d. I dent i fiedt heneedt obui l dan‘ ecosy s t em’ e. g.appl ewi t hal l i t spr oduct sf ocusedar ound t heappst or e,Andr oi danandr oi dmar k etpl ace. Appl e( i nnov at i onf orfir s tcompet i t oradv ant age) : Appl ewer et hefir stt oent ert het abl etmar k et ,whi c hwasv er ysmal latt het i me. Hasr esul t edi nt hem bei ngoneoft hemostpr ofit abl ecompani es. Compani escannotcompet ewi t hAppl ef orr eput at i on,hi ghamount sofgoodwi l l associ at eswi t ht hebr and. Fi r stwi t ht heappst or emeantt hat3r dpar t ydevel oper si ni t i al l yst ar t edwor ki ngf ort hem hav e86000devel oper s. Thei recos ys t em has600, 000apps;compar edt oGoogl e’ sAndr oi dwi t h500, 000and Noki awi t h15, 000. Booki ndus t r y( c hangei npr oduct ) : Dev el opmentofer eader shasr educedt hedemandf orpaperbook s. Dev el opmentofEi nkbyt heamaz onki ndl e( 2007)sawsal esr i segr eat l ys i ncet hescr een mi mi ck edpaperandl i t t l edi ffer encecoul dbet ol d. Peopl ecandownl oadbooksanywher e,andmuchcheaper-aver agepr i cei s$3. 99. Lowcost scanbeachi ev edwi t hl i t t l eov er heads-nophys i cal st or age,machi ner yors t aff needed. Ebooksal esr ose38. 9% i n2010,paper backsal esdown13. 8%. Tr avelagent sandhi ghst r eet( changei ndi st r i but i onnet wor k) : Thedev el opmentoft hei nt er netandonl i ner et ai lhascausedhi ghst r eetf oot f al l t of al l dr amat i cal l y . Ther ei smor et r anspar encyonpr i cesduet opr i cecompar i sons i t esandpeopl ebei ng easi l yabl et obr owsest or es . Lossofcust omerl oy al t y . Par t i cul ar l yi nt r avel agenc i es-cust omer scannowcr eat ebespok ehol i day sonl i neand t her ei snoneedf ort hem. Si t essuchasAmaz onandEbayar et hechoi cef ormanyduet oease.

Emer gi ngmar k et s: Dy son( l owerfix edcost s) : Mov edt oMal ays i a-cut800j obs . Suppl i er sar ebas edi nt hef areast . Pr oduct sdowel l i nAust r al i aandNZandJapan,pl ant ot ar getot herFarEastcount r i es al so. R&Dwi l l r emai ni nt heUK-wi t hatl east1000empl oy ees. UKwor k er scostGBP9perhourwher easMal ay si anscostGBP3. UKofficespacei sal so3t i mesmor eexpensi ve. Bankcal l cent er s( notnecessar i l yt hebestmov e) : Banksmov edt hei rcal l cent er st oI ndi at osavecost s . Thi sl ower edcust omerser vi ceduet ot hel anguagebar r i er ,andf r us t r at edmany cust omer s . Act ual l ypr ovi dedamar k et i ngpl at f or mf ort heNat west ,whomar k et edt hemsel v esasbei ng t heonl ybankwi t hUKbasedcal l cent er s . Resul t edi ni ncr easedpr ofit sf ort hem. Pr ovest haty oudon’ thav eexpl oi tf or ei gnmar k et st osucceed. Vol kswagen( r educer i ski nt her ecessi on) : Sol d8mi l l i oncar si nay earf ort hefir s tt i meev erbecauseofi t sexpans i ont oBr az i l ,I ndi a andChi nai nt her ecessi on. Tar get edt hemar k etwi t hsmal l ercar s . Pr oduct i onf ort heI ndi amar k ethasbeenmov edt oI ndi a-car sar el ocal l ymade. Cont r i but est ot heeconomygi vi ngpeopl eenoughfinancet obuyt hei rcar s . Chi nagr ocer ymar k et( r api ddemogr aphi cgr owt h) : Chi nahasoneoft hehi ghestgr owi ngpopul at i ons-i ncr easi ngt heneedf orbasi cpr oduct s suchasf ood. By2015,Br az i l ,I ndi a,Russ i aandChi nawi l l bet hel ar gestgr ocer ymar k et s. By2015,Chi nawi l l bewor t hGBP918Bnat14. 8% annual gr owt h. Ret ai l er swi l lbel ocat i ngi nmaj orci t i esbutal sosecondandt hi r dt i erones . St ar bucks( Ex pandgl obal l y) : For mi nganal l i ancewi t hTat abev er ages . St or eswi l l sel l al l St ar t buckspr oduct sandsomeofTat a’ s 5050i ncost sr ev enueandpr ofit s . Pl ant oopen50st or esby2012. $170m caf emar k etwi l l gr ow30%pa. Wi l lcr eat et hedemandf or2700out l et sov ert henext5y ear s( whi c hSt ar buckshopest o fil l ) . Fai l edi nChi nahowev er-per f or mi ngbadl yasi tt ur nsoutChi neseonl ydr i nk3cupsof coffeeonaver ageay ear .

Leader s: Kaz uoHi r ai -Sony : Empl oy edasCEO t oi ni t i at ear et r enchments t r at egyandr ecov ert hecompanyf r om l oss. 8y ear sconsecut i vel os si nTVs. Hast ocutdi vi si onst hatar enotpr ofit abl e. Foc usoncor epr oduct s. St ephenEl op-Noki a: Hopest ot ur nar oundNoki a. Canadi an-hopef ul l ymor ei nt ouchwi t ht heUSmar k etwhi cht heyar edoi ngpoor l yi n. Li nkswi t hMi cr osof thasr esul t edi nt hej oi ntv ent ur ewi t hWi ndows7sof t war eont hei r phones. Ri char dBr anson: Goodl eader Usesst r at egyofdi v er si ficat i on. Notaf r ai dt of ai lt osucceed.Wentaheadwi t hVi r gi nAt l ant i cdes pi t eev er y onet el l i nghi mi t woul df ai l . St ev eJ obs : I nspi r at i onal figur ehead. Pr ovi dedmuchoft hedesi gnf orpr oduct s-notj ustmanagement .

Or gani z at i onal Cul t ur e Googl e( i nnov at i on) : Lar r yPageencour agesempl oy eest omov eawayf r om bur eaucr ac y . Notaf r ai dt oi nv esti nc r azyi deas-want speopl et ounder st andt haty oudon’ tget anywher eunl essy oust ar ti nv est i ngr esour cesi nt or esear ch. Somet i mesy oucan’ tknowex act l ywher ey ou’ r egoi ng. E. g.Googl eadsencewasdevel opedt hr oughr esear chi nt oar t i fici ali nt el l i gence. Cr eat edoneoft hemosti nnov at i v ecompani esi nt hewor l d. Ti meWar ner( Rol ec ul t ur e) : Thei rc ul t ur er esul t edi nt hem bei ngunabl et oi dent i f yanddevel ops yner gi esaf t ert he mer gerwi t hAOL. Coul dnotdevel opt hei rpr oductf oronl i nedi st r i but i onast her ewasal ackofi nspi r at i ont o t hi nkout si det heboxet c. Ver yr i skav er se. Noki a( egot i st i c) : Manager shav ewor k edf ort hebusi nesst hei rwhol el i ves. Masc ul i necul t ur ewi t hhi ghego-deal shav ebeenknownt of r equent l ybebr ok er edi n st eam r ooms ! Lackofi nnov at i onsandl engt hypr oductdevel opmentt i mes . Lackoff oc us-t oomanypr oduct s . Noki awast ool ongs i ght ed,andf ai l edt oseechangei nt hemar k et . Oncebi ggestcompanynowoneoft hesmal l estandwor stper f or mi ng. 88Bnext r act edf r om t hei rv al uebyAppl e. Appl e( i nnov at i on) : Cul t ur eofi nnov at i onhasl edt ot hem havi ngfir stcompet i t oradv ant ageet cet c .

Economy I nt er estr at es-0. 5% Consumerpr i cei ndexf el lf r om 3. 5% t o3% bet weenMar chandApr i l . Unempl oymenthasf al l enby45, 000t o2. 63m f r om Jant omar c h. UKhasr et ur nedt or ecessi onaf t ercont r act i ng0. 2% f ort hel ast2quar t er s . GBPhasf al l enagai nstt heUSDf r om ar ound1. 63t o1. 54l astmont h,nowcl i mbi ngagai n ( 1. 57) . Br i t i shAi r way s( weak eni ngpound,l owdi sposabl ei ncome,r i si ngf uel pr i ce) : Weak eni ngpoundr esul t i ngi naf uel bi l l of$3bnf orBAi n2009( becauset heybuyf r om US) . Ther ewasast r uct ur alchangei ndemand-consumer swer epr ef er r i ngflexi bl el ostcost car r i er ss uchasRy anAi randEas yj et .Nodemandf orhi ghqual i t ypr emi um pr i ci ngser vi ce. Thi swasbecauseofl owdi sposabl ei ncome. 91. 6% f al li npr ofi t s. 2500j obcut smade. St affask edt owor kunpai df oraweek ,wor kpar tt i meort ak eunpai dl eav e. Gr ounded60pl anesi nwi nt ert osavemoney . Coul dn’ tdot hi st oomuchbecausei ti shar dt ogett hel andi ngsl ot satHeat hr owback . Wool wor t hs( hi ghi nflat i on) : Hi ghi nflat i onbecauseofhi ghf uelcost s-effect sal l i ndus t r i esbecauseoft r ans por t . Wool wor t h’ shadani nfl exi bl ebusi nessmodel .Al l oft hei rs t or eswer er ent edandt hei rr ent bi l l ofGBP150m wentup2. 5% eachy ear . Neededsal est or i s eby4% t oacc ountf ort hi sbutt heyact ual l yf el l . Wentbankr upt . Resul t edi n30000j obl osses. Domi nos( noteffect ed) : Pr ofit sr ose25. 2% i nt her ecessi on. Peopl ewer epr ef er r i ngt ohav epi zz at hanspendmoneyonexpensi v edi nner s . Domi nosexpl oi t edi tt hr oughadv er t i si ngdeal sandpr omot i onsonev eni ngTV. Shar epr i cewentup2%. Lego( noteffect ed) : Pr oductwashi ghl yi nel as t i candr el at i vel ycheap. Seenasacl as si cpr oduct . Wasi nhi ghdemandduet odur abi l i t yandl ast . Pr ofit sr ose23% i n2009. Legoal sopushedf orexpansi oni nt oAsi a. Vol kswagen: Vol kswagent ar get edemer gi ngmar k et swi t hs peci al l ydesi gnedcar s-smal l t ot ar get Br azi l ,Chi naandI ndi a....