Cleveland Cliffs Inc Case Study Analysis


Home >> Harvard >> Cleveland Cliffs Inc >>

Cleveland Cliffs Inc Case Study Solution

Background and Facts

Cleveland Cliffs Inc a workplace products retailer for tiny and also average sized organisations has just recently been associated with planning for a merging with its rival House Deport, which has affected performance degrees in departmentswith the senior supervisor associated with legal difficulties put forth by the government Profession Payment. With the Advertising and marketing Head putting forward the news of his departure from the company in one year, Jeannie Lewis, the current head of operations has been asked to take the function in the future. With difficulties in the type of a potential social modification and also low worker spirits, the organization needs a full reengineering effort at the advertising and marketing department.

Problem Statement
Porter's 5 Forces Analysis
The prospective social change at the advertising and marketing department of Cleveland Cliffs Inc is boosting uncertainty in the working environment bring about different challenges for the Jeannie Lewis that would certainly be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in impacting strategic choices since Stapes Inc. had to desert its plans of combining with Office Deport after the Federal Trade Compensation's intervention at the same time. Provided the fact that the store has an international visibility with branches in UK, UNITED STATES, Canada and Germany, political consider each of these nations may be able to affect efficiency or tactical objectives. Federal Profession Compensation's antitrust suit versus the merging took up beneficial time of the organization's elderly management suggesting that 'political' factors can have severe implications for a global business.

Economic Factors: Economic factors such as the emergence of local business in the worldwide situation recommend that Cleveland Cliffs Inc is thriving in an atmosphere where there is prospective growth of companies. Along with this, truth that store customers are mainly trying to find office materials for home offices recommends that the market has a rising trend of business owners and home based organisations.

Social factors: Social patterns in the economic climate reveal that customers are trying to find convenience along with attractive rates. Marketing research shows how the client for Cleveland Cliffs Inc does not have understanding regarding discovering remedies which can supply a combination of ease and also low costs.

Technical factors: Innovation plays an essential function in Cleveland Cliffs Inc's service strategy specifically as the company is piloting Modern technology facilities which would certainly provide modern technology sales and support in the form of memory upgrades, outer setups. (Summary of BUG in appendix 2).

OB Issues as well as Effects.

Numerous underlying Business Behavior concerns can be seen in Cleveland Cliffs Inc's case as highlighted in this section.

Concerns regarding social modification: There is apprehension about a cultural modification that would occur when Todd Krasnow leaves from his placement as the Exec Vice President of Marketing with a lot of the team member currently showing discontent over this possible step. This expected modification has actually developed stress in the workplace which has actually been paired with the past anxiety of preparing the company for a potential merger with Home Deport.
Pest Analysis
Difficult Task Atmosphere for Newcomers: There is scarcity of personnel that can match the stressful atmosphere of a busy organization. Not just does this lead to problem in locating the right people, it puts stress on new hires as can not withstand the pace as well as stress that the organization anticipates them to bear.

Double Reporting Lines: Novices locate this business culture cumbersome and also challenging to handle specifically as dotted line connections are meant to be weaker generally and also unbiased setup as well as performance evaluation is still done by the solid line manager. This indicates that novices could lose clearness about their respective duties as well as purposes especially as dotted line reporting does not maintain them in direct interaction with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor instead of Bridget Coles although it had actually been guessed that the latter would certainly take Krasnow's setting came as an impact to her spirits. Lewis might have been qualified and ideal for the work however the reality that Kransnow's separation would make Coles a straight record to Lewis may have been the reason for Coles' resignation from solutions.

Fear & Job Insecurity: Fear and insecurity can be determined as two major issues that Lewis would be managing particularly as the merging has now be terminated and also two senior executives of the advertising division would certainly be leaving. The entire obligation of the division would be dropping on Lewis's shoulders that would not just supervise of brining about a social change yet would certainly additionally have to confirm herself in her new role.

Inappropriate Administration Style of Leader: Lewis's monitoring design as well as its conflict with the marketing division's function can likewise be seen as an OB obstacle particularly as she has actually been utilized to handling concerns in the procedures department where personnel are educated to concentrate on procedures and get them. The advertising and marketing department on the various other hand can be viewed as a group of individuals that are utilized to being nurtured by Krasnow that focused much more on output than procedures.

Interdepartmental Disagreements: Interdepartmental disputes in between three departments, marketing, merchandizing and procedures respectively over the allowance of the advertising and marketing mix can be recognized as one more OB issue. Although the marketing division does not share the same vision as the other two departments pertaining to the aloocation of the advertising and marketing mix twoards promotions and advertsing, the merchandizing as well as procedures departments do not agree over the advertising mix allowance amongst one another either.

Fragmentation in Advertising And Marketing Department: Disintegration between the marketing and advertising departments can be recognized as another OB problem which can require more interest. The reality that the advertising and marketing sections in the advertising and marketing division are disconnected is protecting against both divisions from getting from each various other's experience and also expertise. Integration of advertising and marketing with merchandising and procedures would certainly end up being harder if the marketing division itself is disintegrated which can be an additional prospective OB problem.

Cleveland Cliffs Inc Analysis

Numerous concepts have been used to discuss the circumstances to obtain additional quality about the situation available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, most supervisors think that staffs are passive and also careless, have little aspiration and also stand up to adjustment. The hard variation of this concept stressed browbeating, limited controls, hazards and punishments. In time it creates low performance, subtle sabotage and competition (Offer, 2003). The circumstance at Cleveland Cliffs Inc is not totally complying with Theory X, it can be seen that brand-new hires are discovering this setting rather demanding which might ultimately lead to a better inclination of the management in the direction of Concept X. According to McGregor's supported view, which he called Concept Y, the essential task of the administration is to arrange business conditions so that people can achieve their very own objectives best by guiding their efforts in the direction of business rewards. If individuals discover no satisfaction in their work, the administration would have little option yet to depend on concept X and also outside control (Deal, 2003). Also while evaluating Lewis's management design, concept X might have been suitable in the operations division somewhat however the Marketing division would certainly call for reliance on Concept Y so as to get the creativity and also originality from the groups.

Tuckman's Teamwork Concept: As far as Lewis's issue about bringing harmony in between the marketing and advertising department is worried, this would at first lead to contrast as talked about by Bruce Tuckman in his 'Team effort Theory'. (Tuckman, 1965). As per Tuckman's theory displayed in appendix 3, during the initial stage of team advancement, individuals may not bond, as they are hectic discovering their area in the group. By combining the advertising and marketing division's work, there might be the same preliminary disconnect which can bring about the 2nd phase of 'storming' where the teams test one another. Nevertheless, it is only throughout the 3rd phase or 'norming' when they would collaborate to share ideas prior to the team can cause synergy in the fourth phase 'executing'.

When individuals are offered with adjustment, they enter phase one and so there might be emotions like despair, uncertainty, frustration, anger, worry, rejection as well as disorientation.The circumstance at the advertising and marketing department of Cleveland Cliffs Inc is comparable so Lewis can obtain comfortable with the suggestion that it is not extraordinary behavior. It is during this phase that Lewis will have to give assistance to the division so that they can locate a feeling of direction. It can be seen how Krasnow has already made this shift much easier by making Lewis get included in the department a year prior to his actual departure.
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has goes over the significance of 'protection needs as being a lower degree need of a human for activating motivation. As seen in the pyramid shared in appendix 3, we can see how 'the demand to feel secure and out of danger' is at the 2nd degree of demands. Prior to a staff member can be made to create mentally, he needs to have his 'Physiological 'and 'Security' requires fulfilled.

SWOT Analysis for Cleveland Cliffs Inc Case Study

Effects of Analysis.

The OB analysis has checked out numerous concepts to comprehend just how to handle the present situation available. The following 3 choices have been proposed to aid Lewis manage the business obstacles in the advertising department. Each of these choices has been suggested for alleviating the transition required to bring the advertising division according to the demands of the market as well as for making the social modification that would adhere to once the current leader leaves.

Assimilation of marketing and advertising features. Dividing Adverting as well as Production functions. Combination of Marketing with Operations.

Assessment of Alternatives.

Judith Shapiro who has earlier been spoken with by Lewis during the earlier merging days has experience in business-to-business advertising and marketing along with firm and retail advertising experience. Once Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising and marketing to handle both advertising and advertising features.

The benefit of this method is that it will certainly incorporate the two functions while minimizing the need for hiring an added resource for advertising. Lewis would be heading the advertising division as well as in any type of case her substitute would be required for the existing role that she is carrying out. The drawback of this alternative is that exterior hiring may bring about resentment from interior personnel that may be looking at the placement of EVP after Lewis takes over Krasnow's setting.

Separating Adverting as well as Production: Given the affordable pressures and also top quality work called for from the ad agency, it is advised that Lewis should permit the manufacturing device to be a different feature from the marketing unit. Considering that most advertising agencies had these two features as separate units, it makes even more feeling to adhere to the standard. In addition to this, both functions may have the ability to concentrate on their core turns on more efficiently. The downside of this strategy would certainly be that added prices would have to be birthed for setting up different production functions. A manufacturing head may have to be worked with which could boost overheads for the company.

Combination of Advertising with Procedures: Because Lewis is currently taking care of the advertising and also operations divisions concurrently; it makes sense to integrate the two functions given that she has been efficiently taking care of both ends. The truth that Lewis has to adjust her administration design for the advertising division suggests that these two departments would be culturally diverse.


An examination of the 3 options shows that integration of marketing and procedures would not be a possible move due to the vast differences in between the two departments despite the fact that currently Lewis is taking care of both. While splitting up of the production function may have been a beneficial step for the advertising department, the truth that it would certainly indicate positioning a third function under Lewis's wing means this ought to be prevented.

Activity Plan.
Lewis will certainly take over the role of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be combined.

Judith Shapiro will certainly be worked with to take Lewis's place as SVP of marketing and advertising.

Manufacturing function will certainly stay part of advertising under marketing function.

Lewis will certainly separate herself from operations.

An autonomous management design with employee empowerment will certainly be made use of in advertising division.

Open door policy and also emphasis on cross departmental interaction will certainly be aimed at eliminating dissonance.

Backup plan.

If the combination does not exercise as intended, a contingency plan would certainly comply with which would certainly separate the production function from the marketing function to decrease the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising department without an SVP. In that case the production function will most definitely be divided by positioning it under an SVP production.