Grupo Pao De Acucar Case Study Solution


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Grupo Pao De Acucar Case Study Analysis

Background and Facts

Grupo Pao De Acucar an office products retailer for small and medium sized services has just recently been associated with planning for a merging with its competitor Home Deport, which has actually impacted performance degrees in departmentswith the senior supervisor involved in lawful problems presented by the federal Trade Commission. With the Advertising and marketing Head putting forward the news of his departure from the business in one year, Jeannie Lewis, the current head of procedures has been asked to take the function in the near future. With difficulties in the type of a possible social modification and reduced employee spirits, the company requires a complete reengineering initiative at the marketing division.

Problem Statement
Porter's 5 Forces Analysis
The potential cultural change at the advertising and marketing division of Grupo Pao De Acucar is raising uncertainty in the working environment causing various obstacles for the Jeannie Lewis that would be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in affecting strategic choices given that Stapes Inc. needed to desert its plans of combining with Office Deport after the Federal Profession Compensation's treatment while doing so. Given the truth that the shop has a worldwide presence with branches in UK, UNITED STATES, Canada as well as Germany, political factors in each of these countries might be able to influence efficiency or calculated objectives. Federal Trade Commission's antitrust match versus the merging took up valuable time of the company's senior management suggesting that 'political' factors can have significant ramifications for a worldwide organisation.

Economic Factors: Financial factors such as the appearance of small businesses in the worldwide circumstance recommend that Grupo Pao De Acucar is prospering in an atmosphere where there is prospective growth of services. Along with this, fact that shop consumers are primarily trying to find workplace materials for home offices recommends that the market has a rising fad of entrepreneurs as well as home services.

Social factors: Social fads in the economy show that clients are searching for ease as well as attractive rates. Market research shows how the client for Grupo Pao De Acucar lacks awareness about finding remedies which can offer a mix of convenience and low costs.

Technological factors: Modern technology plays an essential role in Grupo Pao De Acucar's business method particularly as the company is piloting Innovation facilities which would certainly use innovation sales and assistance in the form of memory upgrades, peripheral installments. (Summary of PARASITE in appendix 2).

OB Issues and Symptoms.

Numerous underlying Business Habits problems can be seen in Grupo Pao De Acucar's case as highlighted in this area.

Apprehensions regarding social modification: There is worry concerning a social adjustment that would certainly take place as soon as Todd Krasnow leaves from his placement as the Exec Vice Head Of State of Marketing with the majority of the staff members currently revealing unhappiness over this potential relocation. This anticipated adjustment has developed stress and anxiety in the office which has been coupled with the previous anxiety of preparing the firm for a prospective merger with House Deport.
Pest Analysis
Stressful Work Environment for Newcomers: There is shortage of workers that can match the demanding setting of a fast-paced company. Not just does this bring about problem in finding the right people, it places tension on new hires as can not withstand the pace as well as stress that the organization expects them to bear.

Twin Coverage Lines: Newcomers discover this organizational society difficult as well as tough to handle specifically as populated line partnerships are suggested to be weak in general as well as unbiased setting and efficiency evaluation is still done by the strong line supervisor. This indicates that newcomers can lose clarity about their particular duties as well as objectives specifically as dotted line coverage does not keep them in straight interaction with the solid line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower as opposed to Bridget Coles despite the fact that it had actually been speculated that the last would certainly take Krasnow's setting came as an impact to her spirits. Lewis might have been qualified and also ideal for the task but the truth that Kransnow's departure would certainly make Coles a direct report to Lewis may have been the factor for Coles' resignation from solutions.

Worry & Job Insecurity: Anxiety and insecurity can be determined as two major concerns that Lewis would certainly be taking care of specifically as the merging has currently be cancelled and two senior execs of the marketing division would be leaving. The whole obligation of the division would certainly be falling on Lewis's shoulders that would certainly not just supervise of brining concerning a cultural adjustment but would certainly likewise need to prove herself in her new role.

Inappropriate Management Design of Leader: Lewis's administration style as well as its incompatibility with the advertising division's duty can also be seen as an OB difficulty specifically as she has actually been made use of to handling problems in the operations department where employees are taught to concentrate on processes and also get them. The marketing division on the various other hand can be seen as a team of individuals who are used to being nurtured by Krasnow that focused much more on outcome than procedures.

Interdepartmental Arguments: Interdepartmental arguments between 3 departments, advertising and marketing, merchandizing as well as operations respectively over the allotment of the advertising and marketing mix can be identified as one more OB concern. The advertising and marketing department does not share the very same vision as the various other two departments pertaining to the aloocation of the advertising and marketing mix twoards promos as well as advertsing, the merchandizing and operations divisions do not concur over the marketing mix appropriation among one an additional either.

Fragmentation in Advertising Department: Disintegration in between the marketing and advertising divisions can be recognized as an additional OB issue which might need additional focus. The truth that the advertising and marketing areas in the marketing division are detached is avoiding both divisions from obtaining from each other's experience as well as expertise. Integration of advertising with merchandising as well as procedures would come to be more difficult if the advertising and marketing department itself is degenerated which can be another possible OB problem.

Grupo Pao De Acucar Analysis

Different concepts have been used to describe the circumstances to get additional quality concerning the circumstance handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, most supervisors believe that subordinates are passive as well as careless, have little passion as well as stand up to modification. The situation at Grupo Pao De Acucar is not completely following Theory X, it can be seen that new hires are locating this environment rather difficult which may eventually lead to a better disposition of the management in the direction of Concept X. Even while analyzing Lewis's management design, concept X might have been suitable in the procedures division to some degree but the Marketing department would require reliance on Theory Y in order to obtain the creative thinking as well as creativity from the groups.

Tuckman's Teamwork Theory: As much as Lewis's problem concerning bringing harmony between the advertising and also marketing department is concerned, this would originally lead to conflict as talked about by Bruce Tuckman in his 'Team effort Theory'. By integrating the advertising and also advertising department's job, there might be the exact same initial separate which can lead to the 2nd stage of 'storming' where the teams challenge one an additional.

Bridges' Shift Version: As per William Bridge's theory (appendix 4), individuals are rather uncomfortable with modification, which is evident by the circumstance at Grupo Pao De Acucar The circumstance can be seen as a normal program of life if is examined as per Bridge's concept where he discusses that individuals go through three phases of shift when they experience change. 'Ending, shedding as well as Releasing', The Neutral Area and 'The New Beginning' (Bridges, 2004). When people exist with change, they go into phase one and so there might be feelings like unhappiness, uncertainty, stress, temper, concern, denial as well as disorientation.The situation at the marketing division of Grupo Pao De Acucar is comparable so Lewis can get comfy with the concept that it is not phenomenal actions. In the second phase, there might be a need to bridge the void between the brand-new and old culture so Lewis might need to face this experience as soon as Krasnow leaves. There may be low spirits and also reduced productivity at this phase which ought to not be taken as a trouble. It is throughout this phase that Lewis will need to provide guidance to the department to make sure that they can locate an orientation. It can be seen how Krasnow has actually currently made this shift easier by making Lewis get involved in the department a year prior to his real separation. As per Bridges' Version, phase three will certainly bring about visibility to discovering, High power as well as commitment as individuals will welcome the adjustment (Bridges, 2004).
Vrio Analysis
Maslow's Requirement hierarchy: The OB issue related to insecurity at the work environment has actually been activated first of all by the modification in management as well as secondly by the truth that the merging will certainly no more be started. Abraham Maslow in his Concept of 'Requirements Pecking order' (appendix 5) has goes over the value of 'protection needs as being a reduced degree need of a human for setting off motivation. As seen in the pyramid cooperated appendix 3, we can see exactly how 'the demand to really feel protected and safe' is at the 2nd level of demands. Before a staff member can be made to develop emotionally, he requires to have his 'Physical 'and also 'Security' requires fulfilled. This indicates that unless the employees are made to really feel secure about their current work standing in Grupo Pao De Acucar they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Grupo Pao De Acucar Case Study

Ramification of Analysis.

The OB analysis has taken a look at different concepts to recognize how to manage the current circumstance at hand. The complying with 3 choices have been proposed to aid Lewis handle the business obstacles in the advertising division. Each of these options has actually been proposed for alleviating the transition required to bring the advertising department in accordance with the requirements of the marketplace and for making the social modification that would adhere to once the existing leader leaves.

Assimilation of advertising and marketing features. Separating Adverting and Manufacturing functions. Integration of Marketing with Procedures.

Assessment of Alternatives.

Judith Shapiro that has actually earlier been interviewed by Lewis throughout the earlier merger days has knowledge in business-to-business advertising and marketing along with firm and retail marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising to take care of both advertising as well as advertising and marketing features.

The advantage of this approach is that it will certainly integrate both functions while lowering the requirement for working with an extra source for advertising and marketing. Lewis would certainly be heading the marketing department and also in any kind of case her substitute would be needed for the present role that she is performing. The drawback of this option is that outside hiring may cause animosity from interior employees who may be eying the placement of EVP after Lewis takes over Krasnow's placement.

Dividing Adverting and Manufacturing: Provided the affordable pressures and high quality job called for from the ad agency, it is advised that Lewis must permit the production device to be a different function from the advertising and marketing unit. Given that many advertising agencies had these 2 functions as separate units, it makes more feeling to comply with the standard. Along with this, both features might be able to focus on their core activates a lot more efficiently. Nonetheless, the disadvantage of this technique would be that extra costs would certainly have to be birthed for setting up separate manufacturing functions. In addition to this, a production head might need to be worked with which could increase expenses for the company.

Integration of Advertising And Marketing with Workflows: Because Lewis is already taking treatment of the advertising and marketing and also operations departments concurrently; it makes feeling to incorporate the 2 features because she has been efficiently taking care of both ends. The fact that Lewis has to adapt her management design for the advertising department recommends that these two divisions would certainly be culturally diverse.


An assessment of the 3 options indicates that assimilation of advertising and marketing and procedures would certainly not be a possible move due to the substantial distinctions between the two divisions despite the fact that presently Lewis is managing both. While splitting up of the manufacturing function might have been a favorable relocation for the advertising division, the fact that it would indicate positioning a third feature under Lewis's wing implies this must be prevented.

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

Marketing and advertising functions would certainly be merged.

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

Manufacturing function will certainly continue to be component of advertising and marketing under marketing feature.

Lewis will certainly divide herself from procedures.

An autonomous management design with staff member empowerment will be made use of in marketing department.

Open up door policy and also focus on cross department communication will be focused on getting rid of dissonance.

Backup plan.

If the integration does not exercise as planned, a backup plan would certainly comply with which would certainly separate the manufacturing function from the advertising feature to decrease the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising division without an SVP. In that case the manufacturing feature will absolutely be separated by positioning it under an SVP manufacturing.