Safeway Incs Leveraged Buyout A Case Study Analysis


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Safeway Incs Leveraged Buyout A Case Study Analysis

Background and Facts

Safeway Incs Leveraged Buyout A an office supplies store for small and also medium sized services has recently been associated with planning for a merger with its competitor House Deport, which has actually influenced performance degrees in departmentswith the senior supervisor associated with legal difficulties presented by the federal Trade Payment. With the Marketing Head putting forward the news of his separation from the business in one year, Jeannie Lewis, the current head of procedures has actually been asked to take the role in the future. With difficulties in the type of a prospective cultural modification as well as reduced worker morale, the organization needs a complete reengineering effort at the advertising division.

Issue Statement
Porter's 5 Forces Analysis
The possible cultural adjustment at the advertising and marketing department of Safeway Incs Leveraged Buyout A is enhancing unpredictability in the working environment causing numerous 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 significant duty in affecting calculated decisions given that Stapes Inc. needed to desert its plans of combining with Office Deport after the Federal Profession Payment's intervention at the same time. Given the reality that the shop has a global visibility with branches in UK, UNITED STATES, Canada as well as Germany, political consider each of these countries may be able to impact performance or tactical goals. Federal Trade Compensation's antitrust fit against the merger took up beneficial time of the company's elderly administration suggesting that 'political' factors can have significant effects for a worldwide organisation.

Economic Factors: Financial factors such as the appearance of local business in the international scenario recommend that Safeway Incs Leveraged Buyout A is thriving in an atmosphere where there is possible growth of services. Along with this, reality that shop consumers are mainly seeking workplace supplies for home offices recommends that the market has an increasing trend of business owners and home based organisations.

Social factors: Social trends in the economic situation reveal that clients are looking for comfort as well as attractive prices. Marketing research shows how the client for Safeway Incs Leveraged Buyout A does not have understanding regarding discovering solutions which can provide a mix of comfort and also low costs.

Technological factors: Modern technology plays a vital role in Safeway Incs Leveraged Buyout A's company approach specifically as the company is piloting Innovation facilities which would certainly provide technology sales as well as assistance in the kind of memory upgrades, peripheral installations. (Summary of BUG in appendix 2).

OB Issues and also Manifestations.

Numerous underlying Business Habits concerns can be seen in Safeway Incs Leveraged Buyout A's case as highlighted in this section.

Worries regarding social change: There is apprehension concerning a cultural modification that would certainly happen when Todd Krasnow leaves from his placement as the Exec Vice President of Advertising with a lot of the personnel currently showing unhappiness over this potential move. This expected modification has actually produced tension in the work environment which has actually been coupled with the past stress and anxiety of preparing the firm for a prospective merging with Residence Deport.
Pest Analysis
Stressful Work Setting for Newcomers: There is shortage of employees that can match the demanding atmosphere of a busy company. Not just does this result in trouble in locating the ideal individuals, it puts tension on brand-new hires as can not hold up against the speed and stress that the company anticipates them to birth.

Double Reporting Lines: Novices locate this organizational culture cumbersome and tough to cope with particularly as populated line relationships are suggested to be weak generally as well as unbiased setting as well as performance evaluation is still done by the solid line supervisor. This implies that novices could shed clearness about their particular duties as well as purposes especially as dotted line coverage does not keep them in direct interaction with the solid line managers.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles although it had actually been hypothesized that the latter would take Krasnow's placement came as a strike to her spirits. Lewis may have been capable and ideal for the job however the truth that Kransnow's departure would make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Worry & Job Insecurity: Anxiety and also insecurity can be determined as two major problems that Lewis would be managing specifically as the merger has currently be terminated and also 2 senior execs of the advertising and marketing division would certainly be leaving. The entire responsibility of the department would be falling on Lewis's shoulders who would not just supervise of brining regarding a social adjustment but would additionally need to confirm herself in her brand-new role.

Incompatible Administration Design of Leader: Lewis's monitoring design and also its incompatibility with the advertising division's role can likewise be seen as an OB difficulty specifically as she has actually been made use of to dealing with issues in the operations department where employees are educated to concentrate on procedures as well as get them. The marketing department on the various other hand can be seen as a group of people who are used to being supported by Krasnow who focused much more on output than processes.

Interdepartmental Disagreements: Interdepartmental disagreements between 3 departments, advertising and marketing, merchandizing and also operations specifically over the allotment of the advertising and marketing mix can be identified as another OB issue. The advertising and marketing division does not share the exact same vision as the various other 2 departments concerning the aloocation of the advertising and marketing mix twoards promotions and advertsing, the merchandizing and procedures departments do not concur over the marketing mix allocation amongst one another either.

Fragmentation in Marketing Division: Fragmentation in between the marketing and advertising divisions can be identified as another OB issue which could need additional interest. The reality that the marketing and advertising sections in the marketing department are disconnected is avoiding both divisions from obtaining from each other's experience and also experience. Assimilation of advertising and marketing with retailing as well as procedures would certainly become more difficult if the marketing department itself is degenerated which can be an additional possible OB problem.

Safeway Incs Leveraged Buyout A Analysis

Numerous concepts have actually been utilized to explain the situations to obtain additional quality about the scenario available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of managers believe that staffs are passive and careless, have little passion and stand up to change. The situation at Safeway Incs Leveraged Buyout A is not totally complying with Theory X, it can be seen that brand-new hires are finding this atmosphere rather demanding which might ultimately lead to a greater inclination of the administration in the direction of Concept X. Also while assessing Lewis's management design, theory X may have been ideal in the operations department to some level however the Marketing department would certainly require dependence on Concept Y in order to get the creativity and creativity from the teams.

Tuckman's Synergy Concept: As far as Lewis's issue regarding bringing consistency between the marketing and also advertising division is worried, this would at first lead to contrast as reviewed by Bruce Tuckman in his 'Teamwork Concept'. By incorporating the advertising and also advertising and marketing department's work, there might be the exact same first detach which might lead to the second phase of 'storming' where the teams challenge one an additional.

Bridges' Shift Model: As per William Bridge's concept (appendix 4), people are rather uncomfortable with modification, which is noticeable by the situation at Safeway Incs Leveraged Buyout A The circumstance can be seen as a typical program of life if is researched based on Bridge's concept where he explains that individuals go through 3 stages of transition when they experience modification. 'End, shedding and Releasing', The Neutral Zone as well as 'The New Beginning' (Bridges, 2004). When people are presented with adjustment, they enter phase one therefore there might be emotions like unhappiness, uncertainty, frustration, temper, concern, rejection and disorientation.The scenario at the advertising division of Safeway Incs Leveraged Buyout A is similar so Lewis can obtain comfy with the suggestion that it is not remarkable behavior. In the second phase, there might be a demand to connect the void between the brand-new and also old culture so Lewis may have to face this experience once Krasnow leaves. There may be low spirits and also low performance at this phase which ought to not be taken as a setback. It is during this stage that Lewis will certainly have to offer advice to the department to ensure that they can locate an orientation. It can be seen exactly how Krasnow has actually already made this transition simpler by making Lewis obtain involved in the division a year before his real separation. According to Bridges' Model, phase 3 will certainly produce openness to learning, High power and also dedication as individuals will welcome the change (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Needs Hierarchy' (appendix 5) has talks about the importance of 'safety needs as being a lower level need of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see just how 'the demand to really feel safe as well as out of threat' is at the 2nd level of requirements. Prior to a staff member can be made to create psychologically, he requires to have his 'Physiological 'and also 'Safety and security' needs satisfied.

SWOT Analysis for Safeway Incs Leveraged Buyout A Case Study

Effects of Analysis.

The OB analysis has actually checked out numerous concepts to recognize just how to handle the current circumstance available. The adhering to 3 choices have actually been recommended to assist Lewis manage the business difficulties in the advertising and marketing division. Each of these choices has been recommended for easing the transition needed to bring the advertising and marketing department in accordance with the requirements of the marketplace as well as for making the social change that would comply with as soon as the existing leader leaves.

Integration of marketing and advertising features. Separating Adverting and Production functions. Assimilation of Advertising with Workflow.

Examination of Alternatives.

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

The advantage of this strategy is that it will certainly incorporate the two features while minimizing the requirement for hiring an extra resource for marketing. Along with this, Lewis would be heading the marketing division and in any case her substitute would be required for the existing function that she is performing. The negative aspect of this option is that exterior hiring might cause bitterness from interior employees who may be looking at the placement of EVP after Lewis takes control of Krasnow's placement.

Dividing Adverting and Manufacturing: Provided the affordable stress and also high top quality job needed from the marketing firm, it is advised that Lewis must allow the production device to be a different function from the advertising and marketing unit. Since a lot of marketing agencies had these 2 features as different devices, it makes even more sense to follow the norm.

Assimilation of Advertising And Marketing with Operations: Given that Lewis is already taking care of the advertising as well as operations departments all at once; it makes sense to incorporate the two features given that she has actually been effectively caring for both ends. The fact that both departments currently have significant distinctions over allotment of resources recommends that this combination may have the ability to produce harmony particularly as Lewis would be heading both ends.However there are different drawbacks of this move particularly as it would certainly place excessive problem over Lewis's shoulders. The reality that Lewis has to adjust her management style for the marketing department suggests that these two divisions would be culturally varied. Lewis might not be able to use one type of leadership design to both divisions which might result in inefficiency in either one of the 2 features.


An assessment of the 3 options indicates that assimilation of marketing as well as procedures would certainly not be a practical action due to the huge distinctions in between both divisions although that currently Lewis is taking care of both. While separation of the production feature may have been a desirable step for the advertising department, the reality that it would suggest putting a 3rd function under Lewis's wing indicates this must be stayed clear of also. The integration of the marketing division is the best option in regards to obtaining the ideal arise from the division. An action prepare for this option is gone over below.

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

Advertising and Marketing features would be merged.

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

Production feature will continue to be component of advertising and marketing under marketing feature.

Lewis will separate herself from procedures.

A democratic leadership style with worker empowerment will be utilized in advertising department.

Open up door policy and focus on cross departmental communication will certainly be targeted at removing disharmony.

Contingency plan.

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