Menu

Philip Morris Companies And Kraft Inc Case Study Solution

CASE HELP

Home >> Harvard >> Philip Morris Companies And Kraft Inc >>

Philip Morris Companies And Kraft Inc Case Study Analysis

Background and Facts

Philip Morris Companies And Kraft Inc a workplace supplies merchant for little and also moderate sized services has actually lately been involved in preparing for a merger with its rival Home Deport, which has affected performance degrees in departmentswith the elderly manager associated with legal difficulties presented by the government Profession Commission. With the Marketing Head advancing the news of his departure from the business in one year, Jeannie Lewis, the existing head of procedures has actually been asked to take the duty in the future. With challenges in the form of a possible social adjustment as well as reduced employee morale, the organization wants a complete reengineering effort at the advertising division.

Problem Statement
Porter's 5 Forces Analysis
The prospective social modification at the advertising department of Philip Morris Companies And Kraft Inc is enhancing unpredictability in the working environment leading to various difficulties for the Jeannie Lewis that would be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major role in affecting tactical choices considering that Stapes Inc. had to abandon its strategies of merging with Office Deport after the Federal Trade Payment's intervention in the process. Offered the truth that the shop has a global presence with branches in UK, USA, Canada as well as Germany, political consider each of these nations might be able to influence performance or strategic goals. Federal Profession Commission's antitrust suit versus the merging took up valuable time of the company's senior management recommending that 'political' factors can have significant ramifications for a global service.

Economic Factors: Economic factors such as the emergence of small companies in the worldwide situation suggest that Philip Morris Companies And Kraft Inc is prospering in an environment where there is prospective development of services. Truth that store clients are primarily looking for office materials for house offices recommends that the market has a rising fad of business owners and residence based companies.

Social factors: Social trends in the economic situation reveal that customers are searching for benefit along with attractive rates. Marketing research demonstrates how the customer for Philip Morris Companies And Kraft Inc lacks recognition regarding locating solutions which can offer a mix of ease and also low costs.

Technological factors: Modern technology plays a vital duty in Philip Morris Companies And Kraft Inc's organisation strategy specifically as the company is piloting Technology centers which would provide technology sales as well as support in the type of memory upgrades, peripheral installations. (Recap of BUG in appendix 2).

OB Issues and Manifestations.

Numerous underlying Organizational Behavior concerns can be seen in Philip Morris Companies And Kraft Inc's case as highlighted in this area.

Worries concerning cultural change: There is uneasiness concerning a cultural change that would take place when Todd Krasnow leaves from his position as the Exec Vice President of Marketing with most of the personnel currently revealing discontent over this potential relocation. This expected change has created stress in the work environment which has actually been coupled with the previous stress and anxiety of preparing the company for a prospective merger with Home Deport.
Pest Analysis
Demanding Job Environment for Newcomers: There is shortage of workers that can match the difficult atmosphere of a fast-paced organization. Not only does this lead to problem in finding the best people, it puts tension on new hires as can not stand up to the speed and stress that the organization anticipates them to birth.

Twin Reporting Lines: Newcomers find this business society difficult and tough to cope with particularly as populated line partnerships are meant to be weak as a whole as well as unbiased setup and also efficiency assessment is still done by the strong line supervisor. This means that newbies might lose quality regarding their respective duties and purposes specifically as populated line reporting does not maintain them in straight interaction with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had been guessed that the last would take Krasnow's setting came as an impact to her spirits. Lewis may have been capable and also ideal for the job however the truth that Kransnow's separation would make Coles a direct report to Lewis may have been the factor for Coles' resignation from services.

Fear & Job Insecurity: Worry and also insecurity can be recognized as two major issues that Lewis would certainly be dealing with particularly as the merger has now be cancelled as well as 2 elderly executives of the advertising and marketing division would be leaving. The whole obligation of the division would be falling on Lewis's shoulders who would certainly not just supervise of brining regarding a social change however would certainly also have to verify herself in her new duty.

Inappropriate Monitoring Style of Leader: Lewis's monitoring design as well as its incompatibility with the marketing department's role can also be seen as an OB difficulty particularly as she has been made use of to taking care of concerns in the operations department where personnel are shown to concentrate on procedures and get them. The advertising and marketing division on the various other hand can be viewed as a team of people who are used to being nurtured by Krasnow who focused much more on result than processes.

Interdepartmental Differences: Interdepartmental disputes in between three divisions, marketing, merchandizing as well as operations respectively over the allowance of the advertising and marketing mix can be determined as an additional OB concern. Although the marketing department does not share the very same vision as the various other 2 divisions concerning the aloocation of the marketing mix twoards promos and also advertsing, the merchandizing and also operations divisions do not concur over the advertising and marketing mix allocation amongst one another either.

Disintegration in Advertising Department: Disintegration between the marketing and advertising divisions can be identified as one more OB concern which might need further interest. The reality that the marketing and advertising sections in the marketing division are detached is stopping both departments from acquiring from each other's experience and knowledge. Integration of advertising with merchandising as well as procedures would certainly become harder if the marketing division itself is broken down which can be an additional potential OB problem.

Philip Morris Companies And Kraft Inc Analysis

Different concepts have been utilized to describe the situations to get additional clearness about the circumstance handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of supervisors think that juniors are passive and also careless, have little ambition and withstand adjustment. The circumstance at Philip Morris Companies And Kraft Inc is not completely adhering to Concept X, it can be seen that brand-new hires are finding this environment instead demanding which might at some point lead to a better inclination of the management in the direction of Concept X. Even while evaluating Lewis's monitoring design, concept X might have been ideal in the operations division to some degree however the Advertising and marketing division would certainly require reliance on Theory Y in order to get the creative thinking and also originality from the groups.

Tuckman's Team effort Theory: As far as Lewis's worry about bringing consistency in between the advertising and marketing division is worried, this would originally result in contrast as talked about by Bruce Tuckman in his 'Teamwork Theory'. (Tuckman, 1965). According to Tuckman's theory received appendix 3, during the first stage of team growth, individuals may not bond, as they are hectic discovering their area in the group. By incorporating the marketing and advertising division's work, there may be the same initial disconnect which might lead to the 2nd stage of 'storming' where the teams test one another. It is only during the third stage or 'norming' when they would come together to share suggestions prior to the group can bring around synergy in the 4th stage 'doing'.

When people are presented with adjustment, they enter phase one and so there might be emotions like despair, uncertainty, aggravation, anger, worry, denial and also disorientation.The situation at the advertising department of Philip Morris Companies And Kraft Inc is comparable so Lewis can obtain comfortable with the concept that it is not remarkable actions. It is during this phase that Lewis will certainly have to provide guidance to the department so that they can locate a feeling of instructions. It can be seen exactly how Krasnow has already made this transition easier by making Lewis obtain involved in the department a year before his actual separation.
Vrio Analysis
Abraham Maslow in his Concept of 'Requirements Pecking order' (appendix 5) has goes over the relevance of 'safety and security needs as being a lower level demand of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the demand to really feel safe and secure as well as out of threat' is at the second degree of needs. Prior to an employee can be made to create mentally, he requires to have his 'Physiological 'and also 'Security' needs satisfied.

SWOT Analysis for Philip Morris Companies And Kraft Inc Case Study



Effects of Analysis.

The OB analysis has checked out numerous theories to recognize just how to handle the current situation at hand. The following three options have been suggested to help Lewis handle the business difficulties in the advertising and marketing department. Each of these alternatives has actually been suggested for relieving the transition required to bring the advertising division according to the needs of the market and for making the social modification that would comply with as soon as the present leader leaves.

Combination of marketing and advertising features. Separating Adverting and Production functions. Assimilation of Advertising with Procedures.

Analysis of Alternatives.

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

The advantage of this technique is that it will certainly integrate both features while reducing the need for hiring an added resource for advertising. In addition to this, Lewis would certainly be heading the marketing division and also in any case her substitute would be needed for the existing role that she is carrying out. The negative aspect of this option is that exterior hiring may cause bitterness from inner personnel who may be considering the position of EVP after Lewis takes over Krasnow's setting.

Separating Adverting and Manufacturing: Provided the competitive pressures and premium quality work required from the ad agency, it is suggested that Lewis should allow the production system to be a separate feature from the marketing system. Given that many ad agency had these 2 functions as separate units, it makes even more feeling to comply with the standard. Both features might be able to concentrate on their core activates more efficiently. Nonetheless, the drawback of this approach would be that extra prices would have to be birthed for establishing separate manufacturing functions. Along with this, a production head might need to be employed which might boost overheads for the company.

Integration of Advertising with Workflows: Since Lewis is currently taking care of the marketing and also operations divisions at the same time; it makes feeling to incorporate the 2 features given that she has been successfully taking treatment of both ends. The reality that Lewis has to adjust her administration style for the marketing department suggests that these 2 departments would certainly be culturally varied.

Suggestion.



An analysis of the 3 choices suggests that integration of advertising as well as operations would not be a feasible action due to the huge distinctions in between the two departments despite the truth that presently Lewis is dealing with both. While splitting up of the production function might have been a favorable relocation for the advertising department, the fact that it would suggest putting a third function under Lewis's wing implies this ought to be prevented.

Activity Plan.
Recommendation
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 be worked with to take Lewis's place as SVP of advertising and marketing.

Production function will remain part of advertising under advertising and marketing function.

Lewis will certainly separate herself from procedures.

An autonomous leadership style with employee empowerment will certainly be used in advertising and marketing department.

Open door policy and also focus on cross departmental interaction will be aimed at eliminating disharmony.

Backup strategy.

If the combination does not exercise as intended, a backup strategy would certainly comply with which would divide the production feature from the marketing function to decrease the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain worked with, Lewis will certainly be heading the advertising division without an SVP. Because case the manufacturing function will most definitely be divided by putting it under an SVP production.