What Competition Can Do to a Company - Case Study Example

MANAGING CHANGE Name: Institution affiliated: Date of submission: Tutor: Part A The study will try to understand change, its effects and how the individuals view change in the organization. The first part will have the personal opinion I developed during my stay and working at the Woolworths Supermarket. In March 2016, the spokesman to the organization announced a change in the products of the organization. The aim of this change was to provide the customers with better quality and value for money products. For this reason, the organization was to review about 1000 of the different products that are produced and sold by the organization. However, the change was only to affect one brand of the products which was the red-and-white Home brand range that had been launched as a product in the organization in 1983. The main reason for the change that was to be effected in the organization was the high competition that the organization has been facing from Aldi and Coles. The business World has always been the most dynamic in terms of the events and activities that take place each day, each hour, each minute, each second and every single millisecond. It is such changes that some investors take advantage while some others are taken advantage by the changes [Bes09]. After having taken more than 33 years to develop their product, the organization has identified that the customers now have a different notion that the products and services that are provided by Aldi and Coles are of better quality and as a result, the organization is losing some of its valuable customers to these competitor companies. The Homebrand was established in 1983 and it has continued to improve their product base to a product line of more than 950 different products ranging from pantry staples such as cereals, sugar and pasta to analgesics, insect spray and soft drinks. These products attract annual sales of more than $1.4 billion. However, the sale price of all these products is usually subsidized as they are sold at a lower price than those of the competitor companies. Consequently, the customers have perceived the organizations product to be of lower quality than those of their competitor companies. Therefore, the proposed change will not focus on the prices of the products but on the perception that the consumers have created on the product packaging and branding. The change was thus proposed to try and exploit the weaknesses of the product brand and packaging while trying to maintain the prices that the products are sold [Jul04]. The management should consider improving the quality of the Woolworths brand while maintaining the prices as this will have a positive impact on the organizations activities. Part B The second part will be an interview that will be conducted on a colleague in the same organization. She is a cashier at Woolworths and she will be expected to provide her opinion on the change that is to be effected on the red-and-white brand within the organization. The main information that is expected to be gathered for the organization will be on the performance of the product and the competition that the organization has been facing from its main competitors. Woolworths has been experiencing diminishing sales and revenues as a result of the high competition that they face from the competitor companies such as Aldi and Coles. The products of some companies such as Aldi and Coles are considered by many to be of a higher quality and far more reaching the demands and requirements of the market [DrT10gt]. Their products are more appealing to the consumers since they develop products that go beyond customer satisfaction by enhancing value creation for the customer. The customers of these companies have thus developed confidence in the products, the brand names and the companies that develop these products. It has enhanced customer loyalty by locking in these customers to the products that become difficult to convince them that any other brand can satisfy their needs [Sar04]. For the private labels, the pricing of their products and services is a very important strategy to use in the Australian supermarkets. The supermarkets need to show their customers that their product price is low and the customer will make to believe that the prices are indeed low. However, while considering this pricing strategy, the organization will have to also consider the perception that is created by the organization on the quality of the brand. Part C Change is, usually, a gradual process irrespective of where it is to occur. However, for a change to occur, it should be profitable to people or have a positive impact on the firm. It should be embraced by the people, and they should see its importance. The managerial leader should, therefore, be patient to help the people understand its importance and persistent enough to push for a change to happen. Patience and persistence is, therefore, a characteristic that makes the democratic leader skilful and effective in the change that they manage because lack of such characteristics in them would lead to frustrations which would make the change ineffective. The leaders should be emotionally intelligent and strong so as to have the patience and persistence to tackle all the problems faced by the company [Mar09]. The company should be careful on how it deals with the public as it could affect their competitive nature. Revenue collected from the company has been reducing significantly probably because they have been facing an increase in competition from other companies. The company has been reluctant to invest its time and resources in research and design to identify the means and the how’s of improving their services and market share [Lin06]. Competition is an imminent element in any industry or business that either affects adversely or positively the performance of the company, more so its sales revenue and profits. In any industry, there are players present who have ultimate control over quantity sold, and preference over many customers and these companies can use competition as an advantage over the competitors. The other players try to fight for the market share with the dominant company. The companies that are not able to sustain their sales revenue and profits at a breakeven point are adversely affected by competition hence liquidate and exit the market [Jea01]. There are various issues that could be addressed by the company in order to ensure that the corporation stands out in the market and gets a larger market base despite the stiff and high competition inherent in its industry. These elements range from various services to customer relationship and loyalty. While competition can be stiff and adverse to some companies, it is healthy as it enhances efficiency in how business is carried out. As companies are embroiled in great competition, new methods emerge in the business practice. New production processes also emerge as the companies try to reduce their costs of production while innovation changes each time a market player introduces new technology. As companies try to outdo each other, the biggest winner amidst these is a consumer as he benefits from higher quality services with improved functionality and better technology than ever before. Competition has enabled the fittest companies to survive the murky waters of the dynamic business World. What keeps companies going is their competitiveness rather than their sales. A company may have higher sales revenues in the short run but if it fails to remain competitive, it is bound to be overtaken by its competitors [Zac10]. Relating the responses with the literature The current business growth plan for Woolworths is based on four strategic priorities which include the extension of leadership in food and liquor, maximization of shareholders value through improved portfolio, maintaining a good track record of building new and high speed growth businesses and the establishment of enablers to allow for new era of growth. Most of the products that have been developed as brands for the organization were developed almost immediately after the organization were established. Therefore, lack of innovation and continuous improvements in the brands may render them less competitive in the organization and as a result, the competitor companies may end up winning the loyalty of the consumers. The changes in the product brand to help improve the quality and perception of the brand by the consumers. This change is based on the fourth strategy that provides the need to establish enablers for new era growth. The new growth will try to ensure that the organization remain competitive and profitable in the long run. Nelson, (2001) provides that change should be gradual. Therefore, the organization should try and take time to change the product brand. In this way, they will be able to easily monitor the changes in behaviour of the consumers in the organization. The organization currently has more than 950 products that they provide to the customers differentiated by the red-and-white Homebrand from those of their competitors. Changing the brand name completely for all the products at once may have positive or negative effects on the performance of the brand line. Therefore, the change should be gradual in that they change some products and observe the reaction of the customer before they can change the other products[Nel01]. Conclusion From the above study, it is clearly evident what competition can do to a company. Competition can help a company increase its market share and move ahead to become a market leader. Competition, on the other hand, can make a company lose a grip of its previous market share and become a market follower. This depends on the competitiveness of each market player. It is the competitiveness of each player that determines which side of the scale they will fall. Unfortunately for Nokia, it has been on the losing end. They have been facing major competition problems from companies such as Aldi and Coles. The proposed change and innovation may be important to help the organization rebrand and retain their customers. Change and innovation are concepts that drive the development in any organization as indicated by the many different theories. The organization should offer room for these two concepts to thrive for the purpose of higher achievement. Change should be accompanies by innovation which provides for the application of better processes and promoting the development of new ideas to meet the new requirements in the changing markets. Competing companies have embraced research into their market to find out the demands and requirements of the consumers of their products. The consumers’ demands are always changing with changes in the income and needs. These changes in demand are as a result of changes in consumer tastes and preferences. Recommendations Tastes and preferences of consumers are different; therefore, the company should ensure that it provides a variety of goods and services for the consumers to choose from. The company has been only relying on the same services to source their revenue [Cha12]. Given that there is an increase in the number of competitors in the same region as the company, best way for the company to stay ahead of the others in to promote innovation and change in both the services and market related structures. For an organization that has taken 33 years to develop their brand, changing it might have either adverse of positive effects to the organization. In as much as the change in brand is proposed to improve the perception of the customers, the change may have negative effects on the brand. To reduce the negative effects that may occur in the brand, it is important that the organization considers changing the brand of a few products that are not considered as essentials for the product. In this way, the organization will be able to monitor the performance of such products before they can make the ultimate decision to change the product brand for all the products. Similarly, the small change will also enable the organization to check the activities of the competitors such as Coles, Aldi, IGA and Jones the Grocer. Finally, the change will also allow the organization to monitor the changes in customer preferences in order to make important decisions about the change in the brand as a whole. REFERENCES Bes09: , (Bessant & Tidd, 2009), Jul04: , (Julia & Hope, 2004), DrT10gt: , (Nguyaen, 2010), Sar04: , (Sarah, Steve, & Hilary, 2004), Mar09: , (Marc, 2009), Lin06: , (Linda, 2006), Jea01: , (Jean & Jean, 2001, p. 1), Zac10: , (Zachary, 2010, p. 7), Nel01: , (Nelson, 2001), Cha12: , (Charles & Gareth, 2012), Read More