Is It Time To Rethink Your Pricing Strategy Case Study Solution


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Is It Time To Rethink Your Pricing Strategy Case Study Solution

Background and Facts

Is It Time To Rethink Your Pricing Strategy a workplace materials retailer for tiny as well as average sized services has actually just recently been associated with planning for a merging with its competitor House Deport, which has actually affected efficiency degrees in departmentswith the senior supervisor involved in lawful problems put forth by the government Profession Compensation. With the Marketing Head putting forward the news of his separation from the business in one year, Jeannie Lewis, the existing head of operations has been asked to take the duty in the near future. With difficulties in the kind of a potential cultural modification and low employee morale, the company requires a complete reengineering effort at the advertising division.

Trouble Declaration
Porter's 5 Forces Analysis
The possible social adjustment at the advertising division of Is It Time To Rethink Your Pricing Strategy is boosting uncertainty in the working environment resulting in numerous obstacles for the Jeannie Lewis who would certainly be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in affecting calculated choices because Stapes Inc. needed to abandon its strategies of merging with Office Deport after the Federal Profession Compensation's intervention in the process. Offered the fact that the store has a global visibility with branches in UK, USA, Canada and also Germany, political factors in each of these nations might be able to affect performance or critical objectives. Federal Trade Compensation's antitrust match against the merger used up valuable time of the company's senior management suggesting that 'political' factors can have major effects for an international business.

Economic Factors: Financial factors such as the introduction of local business in the worldwide circumstance recommend that Is It Time To Rethink Your Pricing Strategy is thriving in an environment where there is potential growth of companies. Reality that shop customers are mostly looking for workplace supplies for home offices suggests that the market has a climbing trend of business owners as well as home based companies.

Social factors: Social trends in the economy reveal that customers are trying to find convenience in addition to eye-catching prices. Market research shows how the customer for Is It Time To Rethink Your Pricing Strategy lacks awareness regarding locating services which can provide a mix of comfort as well as low costs.

Technological factors: Modern technology plays an essential role in Is It Time To Rethink Your Pricing Strategy's company strategy specifically as the company is piloting Technology facilities which would certainly offer innovation sales and also assistance in the form of memory upgrades, peripheral installations. (Recap of PEST in appendix 2).

OB Issues and Effects.

Numerous underlying Business Behavior issues can be seen in Is It Time To Rethink Your Pricing Strategy's case as highlighted in this area.

Worries regarding social change: There is concern regarding a cultural adjustment that would certainly happen when Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Marketing with a lot of the team member already showing discontent over this possible action. This expected change has developed tension in the workplace which has actually been paired with the past stress and anxiety of preparing the company for a possible merging with Home Deport.
Pest Analysis
Difficult Job Atmosphere for Newcomers: There is shortage of personnel that can match the demanding environment of a fast-paced organization. Not only does this cause difficulty in discovering the best people, it puts anxiety on brand-new hires as can not hold up against the rate and also pressure that the organization anticipates them to bear.

Double Coverage Lines: Beginners discover this organizational culture troublesome and tough to deal with particularly as populated line relationships are suggested to be weak as a whole as well as objective setting as well as efficiency analysis is still done by the strong line supervisor. This implies that newbies might shed quality regarding their corresponding roles and objectives especially as populated line reporting does not keep them in direct interaction with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower instead of Bridget Coles even though it had been speculated that the last would certainly take Krasnow's position came as an impact to her spirits. Lewis might have been capable as well as proper for the task however the fact that Kransnow's separation would make Coles a direct record to Lewis may have been the reason for Coles' resignation from services.

Concern & Job Instability: Concern and also instability can be determined as two major concerns that Lewis would certainly be taking care of specifically as the merging has currently be cancelled and also two elderly executives of the advertising division would be leaving. The entire obligation of the department would certainly be dropping on Lewis's shoulders that would certainly not just be in charge of brining regarding a social modification but would certainly additionally have to show herself in her brand-new duty.

Incompatible Administration Style of Leader: Lewis's administration style as well as its incompatibility with the advertising division's function can likewise be seen as an OB challenge specifically as she has actually been utilized to handling concerns in the operations division where personnel are instructed to concentrate on procedures as well as obtain them. The marketing department on the various other hand can be seen as a group of individuals who are utilized to being supported by Krasnow who concentrated a lot more on outcome than processes.

Interdepartmental Disagreements: Interdepartmental arguments in between three divisions, marketing, merchandizing and also procedures specifically over the allowance of the advertising and marketing mix can be identified as another OB problem. The advertising and marketing department does not share the very same vision as the other 2 departments pertaining to the aloocation of the advertising mix twoards promotions and also advertsing, the merchandizing and also procedures departments do not concur over the advertising mix allocation amongst one an additional either.

Disintegration in Marketing Department: Fragmentation in between the marketing and advertising departments can be recognized as an additional OB issue which might require further interest. The reality that the marketing and advertising sections in the advertising and marketing department are detached is avoiding both divisions from obtaining from each other's experience and also expertise. Assimilation of advertising with merchandising as well as operations would certainly end up being more difficult if the advertising and marketing department itself is disintegrated which can be another potential OB worry.

Is It Time To Rethink Your Pricing Strategy Analysis

Different concepts have actually been used to explain the conditions to get additional clearness concerning the scenario available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, a lot of supervisors believe that subordinates are passive and lazy, have little aspiration and also resist change. The tough version of this theory stressed coercion, limited controls, hazards and penalties. Over time it creates reduced efficiency, subtle sabotage and also rivalry (Deal, 2003). Although the circumstance at Is It Time To Rethink Your Pricing Strategy is not completely following Theory X, it can be seen that new hires are discovering this atmosphere instead stressful which might eventually bring about a better disposition of the management in the direction of Concept X. According to McGregor's advocated sight, which he called Theory Y, the essential task of the management is to set up business problems so that people can attain their own goals best by directing their efforts towards business incentives. If individuals locate no contentment in their job, the administration would have little option yet to rely upon theory X and external control (Deal, 2003). Also while analyzing Lewis's monitoring design, concept X might have appropriated in the procedures department somewhat yet the Advertising department would certainly require reliance on Concept Y to get the creative thinking as well as creativity from the teams.

Tuckman's Team effort Concept: Regarding Lewis's worry regarding bringing harmony in between the advertising and marketing division is worried, this would initially bring about conflict as reviewed by Bruce Tuckman in his 'Team effort Theory'. (Tuckman, 1965). According to Tuckman's concept shown in appendix 3, during the first stage of group development, people may not bond, as they are active locating their place in the group. By combining the marketing and advertising division's job, there may be the same initial separate which might lead to the second stage of 'storming' where the groups test each other. Nevertheless, it is only throughout the 3rd phase or 'norming' when they would come together to share suggestions prior to the group can bring about synergy in the 4th phase 'performing'.

When people are provided with adjustment, they enter stage one and also so there might be feelings like despair, uncertainty, frustration, rage, fear, rejection as well as disorientation.The circumstance at the marketing department of Is It Time To Rethink Your Pricing Strategy is comparable so Lewis can get comfy with the concept that it is not phenomenal behavior. It is throughout this stage that Lewis will have to offer support to the department so that they can find a feeling of instructions. It can be seen exactly how Krasnow has already made this change much easier by making Lewis obtain included in the department a year before his actual separation.
Vrio Analysis
Maslow's Need pecking order: The OB concern pertaining to instability at the office has actually been caused firstly by the change in management as well as second of all by the reality that the merger will no more be launched. Abraham Maslow in his Theory of 'Demands Hierarchy' (appendix 5) has goes over the importance of 'security requires as being a reduced degree demand of a human for triggering motivation. As seen in the pyramid shared in appendix 3, we can see how 'the need to feel secure as well as safe' is at the second degree of requirements. Prior to a worker can be made to establish mentally, he needs to have his 'Physical 'and 'Security' requires met. This indicates that unless the workers are made to really feel safe regarding their current work status in Is It Time To Rethink Your Pricing Strategy they might not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Is It Time To Rethink Your Pricing Strategy Case Study

Implication of Analysis.

The OB analysis has checked out numerous concepts to comprehend just how to deal with the present situation available. The adhering to 3 options have been suggested to assist Lewis handle the organizational obstacles in the marketing division. Each of these choices has been proposed for easing the change required to bring the advertising and marketing department according to the needs of the market and for making the cultural modification that would certainly comply with when the current leader leaves.

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

Examination of Alternatives.

Assimilation of Marketing & Marketing Functions: The internal marketing firm of Is It Time To Rethink Your Pricing Strategy is currently toughness for the organization in regards to conserving up on overheads connected to advertising and also promo. Since no new recruitment has actually been done after Bridget Cole's separation with the reporting line being directly assigned to Krasnow for the marketing function, this is a favorable opportunity for incorporating the advertising and marketing features. Judith Shapiro that has earlier been interviewed by Lewis during the earlier merging days has expertise in business-to-business advertising and marketing in addition to firm as well as retail advertising and marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to take care of both advertising and marketing features.

The advantage of this approach is that it will incorporate both functions while minimizing the need for working with an extra resource for marketing. Lewis would be heading the advertising division and in any type of case her replacement would certainly be required for the present function that she is carrying out. The disadvantage of this option is that external hiring may cause resentment from internal personnel who might be looking at the placement of EVP after Lewis takes control of Krasnow's setting.

Dividing Adverting and also Production: Provided the competitive pressures and also high quality job called for from the advertising firm, it is advised that Lewis must permit the manufacturing device to be a separate function from the advertising system. Considering that the majority of advertising and marketing companies had these 2 functions as separate units, it makes more feeling to follow the standard.

Assimilation of Advertising And Marketing with Workflows: Given that Lewis is already taking care of the advertising and marketing and procedures departments all at once; it makes sense to incorporate the two functions given that she has actually been efficiently taking treatment of both ends. The fact that Lewis has to adapt her monitoring design for the advertising and marketing department suggests that these 2 departments would certainly be culturally varied.


An analysis of the three choices suggests that integration of advertising and also procedures would not be a feasible relocation due to the substantial differences in between the two divisions despite the fact that currently Lewis is dealing with both. While separation of the manufacturing function might have been a desirable action for the advertising department, the reality that it would mean positioning a 3rd function under Lewis's wing suggests this must be avoided. The combination of the advertising and marketing division is the best choice in regards to obtaining the optimum results from the department. An activity prepare for this alternative is reviewed listed below.

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

Marketing and advertising features would be merged.

Judith Shapiro will be hired to take Lewis's location as SVP of advertising and marketing.

Manufacturing feature will remain part of advertising under advertising function.

Lewis will separate herself from procedures.

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

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

Backup plan.

If the integration does not exercise as planned, a contingency plan would certainly follow which would divide the production function from the advertising function to decrease the tons on the SVP of marketing and advertising. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising and marketing department without an SVP. Because case the manufacturing function will absolutely be separated by putting it under an SVP manufacturing.