...Introduction: Pacific Brands Limited is the largest supplier of everyday essential brands in Australia and New Zealand, retailing and distributing some of the biggest brands like Berlei, Hard Yakka, Bonds, Sheridan, Holeproof, Kayser, etc. The purpose of this case study is to analyse the fundamental issues relating to Pacific Brands strategy to close all seven of its Australian factories, and source its merchandise from southern Chinese factories resulting in the layoffs of 1850 Australian workers . Pacific Brands’ decision was made to save a company labouring under too much debt – about $740 million at the time – operating in a highly competitive, global market and suffering the impact of the worldwide financial crisis on the company. Australian consumers may love Australian products, but they don’t like paying for them . Pacific Brands CEO Sue Morphett stated that the rise of cheap offshore manufacturing meant that Pacific Brands could no longer afford to make clothes in Australia ... manufacturing in Australia no longer provides any competitive advantage to the company. What are the keys problems and/or issues? Offshoring for the purpose of this discussion can be defined as the relocating of one or more aspects of a firm’s business to another country’s location to lower costs. This makes Pacific Brands as a multi-national corporation (MNC) as according to when an organisation is in the multinational phase of internationalisation, the organisation’s principal concern...
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...CASE STUDY 2 : PACIFIC BRANDS : Re Building Brands Module 3: Internal Environment Pacific Brands Limited (Pacific Brands) is an Australia based provider of everyday essential brands. The company manufactures, sources, markets and distributes underwear, hosiery, socks, intimate apparel, workwear, corporate uniforms, bed linen, quilts, pillows, mattresses, foams, footwear, carpet underlay, fashion apparel, and sporting apparel and goods markets. Business Strategy Pre-2009 The company was established with private equity funding and corporate strategy, which was aligned, was to achieve growth by a continuous introduction of new brand with the manufacturing base in Australia. The company was host to over 900 labels, 350 brands and had about 8000 staff. Consequences: $ 800mn debt and market cap. down to $100mn. Due to the globalization the local manufacturing base became redundant. It was far too complex a strategy with the kind of existing capabilities of the company. Pacific Brands was yet another large company that went on a spending spree at the top of the market when debt was cheap. Operationally, Pacific Brands has also demonstrated some peculiar strategies. It was strange that it had retained any manufacturing in Australia as most in this industry decided years ago the economics of producing such goods here did not stack up. Post -2009- major restructuring plan. - Shifted Mfg base to China – to offset high local mfg costs. - Reduced/streamlined...
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...At Pacific Brands we touch the lives of everyday people. We are accessible. We are iconic. We are everyday! Pacific Brands has come a long way from manufacturing Dunlop bicycle tyres in 1893. Today, Pacific Brands is famous for marketing iconic everyday brands our consumers love including Berlei, Bonds, Clarks, Dunlop, Everlast, Grosby, Hard Yakka, Holeproof, Hush Puppies, King Gee, Mooks, Mossimo, Razzamatazz, Sheridan, Slazenger, Tontine, and Volley. With our headquarters in Melbourne, Pacific Brands has operations throughout Australia, New Zealand, United Kingdom, Malaysia, China and Indonesia. The passion of our 5,000 employees is the driving force behind our success. Last financial year Pacific Brands generated sales of over $1.6 billion. Our participation in an extensive range of product categories, coupled with our strong and diversified customer network, underpin our position as a market leading supplier of everyday brands to the Australasian retail marketplace. We make in excess of 300,000 different products and sell over 200 million units per year. We leverage the benefits of our scale to increase efficiencies and generate innovation across the entire company. Ultimately, we seek to improve our speed to market and deliver quality products to our customers. Our brands have become iconic household names with the support of Australian sporting legends such as Sir Donald Bradman, Ken Rosewall, Evonne Goolagong Cawley, Margaret Court and Mark Waugh. Current identities...
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...Introduction In 2009 Pacific Brands reviewed operations throughout its manufacturing sites across Australia. As a result they took the decision to lay off 1850 employees as it wound down the majority of its local manufacturing. The following text will look the contributing factors that influenced this decision and the effects of organisational behaviour made to the remaining work force. In addition when consider how to move forward, Pacific Brands must consider what steps to take to motivate its surviving workforce and the impact that wider environmental factors have on the organisations ability to effectively manage change. Question 1 In many organisations the ability to manage change successfully and transform organisations in an increasingly turbulent world will be a defining factor between those who succeed and those who fail. However, understanding how as individuals or groups such as a workforce transition though any period of change is vital to its successful implementation When exploring human reaction to change Elizabeth Kubler-Ross (Scire 2007) identified five stages people go through to process an event of significant change more commonly known as The Five Stages of Grief. Whilst Kubler-Ross related the grief cycle to experiencing tragedy and loss associated with death or terminal illness her model can be applied to any period of significant trauma such as job loss or in the case of Pacific Brands the significant reduction in its workforce. The Heart of Change...
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...Pacific Brands 1. How has the organization performed in its implementation of the strategy? Customer perspective: Low performance No detail about customer satisfaction, repeat business, market share, product loyalty in case fact. However, sales in cornerstone brand Bonds fell, Kmart replaced Bond with its home-brand might indicates the decreasing of customer loyalty. Troubled footwear, outwear & sport business Internal process perspective: low to medium performance Profit margin and EBITA improved strongly indicate that the focus on simplify business operation and cost saving has delivered results. This is despite Pacific Brands exposed the impact of rising costs for cotton, Chinese labour and freight in the weak sales retail environment. Dividend reinstated in the 1st half year of 2011 also indicates ROE has improved. Learning and growth perspective: low to medium performance Downsize from 900 labels, 350-odd brands & 8000 staff to less than 100 brands; cut down 1800 jobs with 1200 made redundant in manufacturing Recruited talent top management team to ensure strategy capacities are developed to achieve future strategy goals. Strong market focus to ensure future sustainability and growth Financial perspective: low performance Debt level has been reduced, dividend has been restated, profit margin & EBITA have improved 30.1% to $104.5m 3-year restructuring program is on track to deliver net cost savings of $150m. However, sales decreased...
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...Melissa Roberts 9610377 Global Strategy & Leadership S2 2013 Case Scenario 1 Pacific Brands The aim of the restructuring strategy of PacBrands is to refocus the business on brands and move away from manufacturing. It requires a major restructuring including cost-‐cutting; reorganizing capital management and debt financing, simplifying logistics and operations, sourcing production offshore and developing capabilities required as a brand marketer. Question 1 – 4 Marks Question 2 – 8 Marks Question 3 – 6 Marks Page 1 of 23 Melissa Roberts 9610377 Pacific Brands Global Strategy & Leadership S2 2013 Module 1: An introduction to strategy and leadership The global context of business (Drivers, challenges, benefits of globalisation, value of localisation) Page 1.28 Drivers of Globalisation • Competitive Forces -‐ The ability to effectively offshore manufacturing to reduce costs has been possible because of globalization. The pressure...
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...A) Problem Statement: Pacific Brands Cases Study, IBA 111, SP1, 2013. The global financial crisis forced businesses to implement aggressive strategies focused on minimizing expenditure to ensure survival. Australian company Pacific Brands responded by moving manufacturing offshore in a bid to lower production overheads. This structural change manifested with the closure of seven factories and inevitable local job losses. In contrast to these actions the companies CEO and higher levels of management received extensive pay rises. The approach appeared to illustrate the companies desire to ensure its key stakeholders, the shareholders, were satisfied with disregard for the organizational values it had identified on previous occasion. The company’s failure to develop an effective long-term strategy for the management of potential external environment impacts on their business model tarnished its reputation, putting into question its managerial focus, suggesting that it rewarded those who succeeded in formulating resolutions that create profit regardless of the impact on the domestic labour market. B) Problem Statement: Pacific Brands Cases Study, IBA 111, SP1, 2013. The aim is to develop a long-term management strategy that combats the impact external factors have on the success of the business, with a focus on ensuring the organizational values are upheld. The global financial crisis saw companies like Pacific Brand implement aggressive strategies to maintain competiveness...
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...Surfside Leisurescapes is a family-owned business that has been operating since 1983 in Newmarket, a little town located 45 kilometers north of Ontario that has a population of 75,100. The company’s current product mix involves backyard products, such as barbeques, patio furniture, pools and pool toys and accessories. A. Key Issue: Steve Jentzen, Surfside’s general manager, wants to change some of the company’s current marketing actions in the hot tub department because the company has failed to meet its projected sales every year. Hot tub sales represent around 25 percent of the company’s total revenue, making the hot tub division a critical one. Since Surfside has no current marketing strategy nor competitive plan, Jentzen wants make a viable one in order for the company to retain its market share and its ability to be competitive. In 2004, more than 12 competitors have moved to Newmarket’s area, and the current climatic conditions were not helping the hot tub’s seasonal business. The general manager previous efforts to motivate sales included incentives, performance appraisals, apprenticeships programs and a program termed “a marketing revolution”. Jentzen has thought about a number of options to make his hot tub lines more profitable. Some of his thoughts are regarding whether the company should carry both of hot tubs lines of not. He has also thought about if investing more in human resources or if changings to the floor plan of the retail store could help generate...
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...Pacific Brands Case Study Contents Introduction 1. Problem Identification 1.1 Cost Reduction 1.2 Structural Reorganisation 1.3 Ethics and Social Responsibility 2. Problem Analysis 2.1 Cost Reduction 2.2 Structural Reorganisation 2.3 Ethics and Social Responsibility 3. Recommendations 4. Bibliography Introduction Pacific Brands is an Australian based textile retail business that operates throughout Australia, New Zealand, United Kingdom and Asia. Within the following report is an exploration of the change process which Pacific Brands began implementation of in 2009. This step change was driven by a number of internal and external factors. These included falling profit and share price, increasing costs and the pressure of the worsening Global financial crisis. Added to this was the need to stay competitive in a market that has significantly shifted to cheaper imports. (TCF Review 2008, pp. 9-10) Pacific Brands restructure and the sale/discontinuation of unprofitable brands generated a focus towards core brands and the implementation of a profitable, streamlined structure that would guarantee the most cost efficient model. The disadvantage of such an aggressive restructure was the immediate media backlash and ensuing reputation damage caused by the outrage of employees, politicians and general public. 1. Problem identification 1.1 Cost reduction As in all developed markets the Textile, Clothing and Footwear industry that Pacific...
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...| North America | Africa | Europe | Asia-Pacific | Industry | 0,336 | 0,055 | 0,265 | 0,344 | Apollo tyres sales | 0 | 0,135 | 0,245 | 0,62 | Cumulated sales | 0 | 0,135 | 0,38 | 1 | Cumulated sales- sales | 0 | 0 | 0,135 | 0,38 | Cumulated sales+(Cumulated sales-sales) | 0 | 0,135 | 0,515 | 1,38 | Industry[Cumulated sales+(Cumulated sales-sales)] | 0 | 0,74 | 13,75 | 47,47 | | | | | | | | | GIR | 61,96 | The International Strategy of Apollo Tyres. International position: The international position of Apollo Tyres seems to be one of Regional Dominant Player. Below is the table of calculations of the Global Revenue Index (GRI). According to these calculations, the GRI in this case is of 61,96, which means that Apollo Tyres is a Regional Dominant Player. This result is coherent with the characteristics of Apollo Tyres, because it is dominant in India. The company wants and is maintaining both a world-class brand (Dunlop) and a local low-cost brand (Regal Tyres). Its dominance in the Indian market (62% of sales in the Asia-Pacific region) is focused on the low-price demand in India. In its international strategy, Apollo Tyres goes beyond solely exporting to other markets, but has also established other facilities and acquired other companies in its international expansion. However, the vast majority of its sales are in the Asia-Pacific reason, particularly in India. Therefore, we can conclude with the calculations and the statistical data...
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...TANYA NOLAN: Struggling clothes-maker Pacific Brands is the latest company to become a private equity takeover target. The maker of Bonds undies, Berlei bras, Sheridan sheets and Dunlop, among other well-known brands, has been approached by US-based investment firm Kohlberg Kravis Roberts. It's the latest in a string of buyout offers for listed companies that have seen their share prices hit by market jitters and an exodus of investors from struggling industries. Business reporter Michael Janda reports. MICHAEL JANDA: Private equity firms are the predators of the investment world, looking for weak companies they can buy on the cheap and turnaround before selling them on to someone else, or floating them on the share market. Katherine Woodthorpe is the chief executive of the Australian Venture Capital and Private Equity Association. KATHERINE WOODTHORPE: The bottom line is that they see a company that they believe they can double the value of in a period of something like three to five years. MICHAEL JANDA: The latest firm to join the list of targets is Pacific Brands. It confirmed this morning that it's been approached by the US-based investment firm Kohlberg Kravis Roberts, but it says negotiations are ongoing and there's no certainty of an offer even being made. If a successful offer is forthcoming it would be a return to private ownership for Pacific Brands, which was floated by its previous private equity owner CVC for $2.50 a share in 2004. At...
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...Case: Georgia-Pacific Consumer Products LP v. Kimberly-Clark Corporation, et al., 647 F.3d 723 (2011) Facts: Georgia-Pacific has been selling its Quilted Northern brand toilet paper with “Quilted Diamond Design” since the early 1990s and has several trademarks, copyrights, and utility and design patents for the Quilted Diamond Design.In 2008, Kimberly-Clark redesigned two of its brands, Cottonelle Ultra and Scott Kimberly-Clark Professional, using a quilted pattern that Georgia-Pacific believes to be very similar to its Quilted Diamond Design. Georgia-Pacific claimed unfair competition and trademark infringement under the Lanham Act, 15 U.S.C. § 1051 et seq. and filed suit in the U.S. District Court for the Northern District of Illinois. Kimberly-Clark filed a Motion for Summary Judgment claiming the design was functional and could not be protected. Virginia M. Kendall, the presiding judge, agreed and granted summary judgment in favor of Kimberly-Clark. Issue: Can Georgia-Pacific hold utility patents, which detail functionality of design, and still have the protection of a registered trademark for its “Quilted Diamond Design”? Rule: Lanham Act, 15 U.S.C. § 1052 (e)(5) - No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it consists of a mark which comprises any matter that, as a whole, is functional. Analysis: The court looked...
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...Page 1 – ASIA PACIFIC 2012 Copyright © ESOMAR 2012 “SO MANY DIFFERENT SUNS” HOW SUCCESSFUL BRANDS HIT THE CONFLUX OF AFFORDABILITY AND ASPIRATION Shobha Prasad • Sangeeta Gupta INTRODUCTION All of us are familiar with the current industry focus on emerging markets. It is also no surprise that the larger consuming population in these markets lies not at the top end, but towards the middle and lower ends of the income pyramid. This is also where marketers struggle the most – how should the offer be constructed to ensure it is affordable yet desirable? The proposed Theory of Multiple Aspiration & Poverty Lines (MAPL) represented a new and stratified approach to understanding affluence, poverty and aspiration. This has many implications on brand positioning and portfolio strategies for creation of winning brands or “suns”. Objective The objective of this paper was to take this thinking forward through an exploration as follows: Broadly, what are the implications of the Multiple Aspiration & Poverty Lines (MAPL) theory for brand positioning, communication and portfolio management? What drives brand success in the Indian context? What strategies have these brands used to achieve success- to what degree are these brands wedded to symbols of aspiration /belongingness in each social class? How did the brands that were not so successful in the Indian market falter on making the right connections on these dimensions? Approach We identified product categories through which...
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...Louis Vuitton Case Analysis Key Issue Louis Vuitton is a flagship group of LVMH, which had double digit growth during 2010 and 2011. Michael Burke, the new CEO of LV group is uncertain about whether the group can grow sustainable. The main issue he current encounter is that how to push LV to grow steadily and protect LV’s values and heritage from being undermined. External Analysis PESTEL Analysis Political: The global luxury goods market can separate into America, Europe, Japan, Asia-Pacific, and rest of countries by region. Overall, the major luxury goods consumption countries have relatively stable political environment in recent years. However, in southern Europe, the governments’ financial turmoil and austerity measures indicated an underlying weakening demand of luxury goods for local people. But the gap was filled by travelers from other countries. The import duty policy in different countries is another factor should be considered in the industry. The high import duty will be part reason of high price differences between different countries. Consequently, the grey market can be formed in the countries which have high price differences. Economic: The major companies in this industry are based in Europe, so the euro exchange rate will be an important factor to the industry. The growth rate will be different by being measured with euro terms and nominal terms. In order to eliminate the exchange rate influence...
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...Case#2: Surfside Problem: Jentzen will make a recommendation on the current product mix based on the marketing plan. * Sell both Jacuzzi and Pacific * Only sell one of Jacuzzi and Pacific Location: Newmarket * Small location with large and diverse shop and business sections * Well trained and educated employment workplace, average salaries$39500 Products: Pool toys and accessories, barbeques and patio furniture, hot tubs, etc. Community relationship: Well-respected by the community, the winner of Readers’ choice award from 1998 to 2004. * Highest quality products/ Exceptional expertise/ good customer services Change since 2004: * 12 different competitors entered newmarket area * Poor weather * No previous marketing strategy/ owners poor management skills/ difficult to confront with the issues Jentzen Ideas: Renew hot tub divisions Previous Jentzen’s implementation plan: Enhance both profitability and employee relations Employee relations * Incentive system/performance appraisals Profitability: * Sponsorships/in-store seminars/direct mail campaigns/promotions Do not have enough positive impact on its hot tubs sales situations. Canadian hot tubs sales: Ontario was the largest seller of hot tubs, representing 39% of all Canadian hot tub sales. Consumers: Three categories: Price-sensitive/quality-conscious/ dealer loyal * Price-sensitive: Best value and lower price (inflected by sales promotions...
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