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Case Study” Templeton hardware

Executive Summary

This report provides an analysis on the case study of Templeton hardware and its acquisition of the two companies, namely lodestone landscapes and the great outdoors. Through this case study of Templeton hardware, it can be seen that the acquisition of this two companies have had its detrimental effects, therefore requiring the need to accurately identify the source problems. Three toolkits are used in this report to diagnose the issues that are present. They are namely SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), six thinking hats and brainstorming. These toolkits help to remove the communication barriers and organisational conflicts which are present. Adding to the toolkits, interventions could be used together with the toolkits to ease the change process in the organisation. The report proceeds on to provide further recommendation which could be used as a platform to make necessary changes to curb the economic downfall of Templeton Hardware. The recommendations thus aim to aid in the recovery process. It is recommended that Templeton Hardware should set goals and targets with their employees which are both challenging and achievable. This would enhance cooperation and cohesiveness among the employees in the company. Intervention strategies can also be used to achieve the organization’s overall effectiveness.

1. Introduction

This report recommends measures and solutions to Templeton Hardware on improving business prospects and helping the organization restructure in the best approach to enhance its performance. The toolkits that have been used to diagnose and identify key issues are the SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), six thinking hats and brainstorming.

1.1 Case Overview and Key Issues

Templeton Hardware was Australia’s leading hardware chain. It acquired The Great Outdoors and Lodestone Landscapes to cement its place as the leading retailer of “all things outdoor”. Its CEO, Jacquie Todori overconfidence had drove what was later discovered as a poor business decision with detrimental effects for the organisation. The Difference in management styles caused organisational conflicts and problems started to arise one at a time. Expectations were not met and the business as a whole was spiralling downwards at an alarming rate. The board was not happy with Jacquie’s decision and was anticipating changes to the company.

2. Diagnosis

2.1 SWOT Analysis

SWOT analysis is employed at a management level to evaluate the current position of the business and determine future management strategies by putting problems into perspective. It also helps to uncover opportunities that can be exploited, manage and minimise threats, understand business weaknesses and capatalise on company strengths (Clark, 2008).

2.1.1 Strengths

Strengths are the internal characteristics of the business that give it a competitive edge over others(Marketing Teacher, 2000). Templeton Hardware was recognised as Australia’s biggest hardware chain which shows its position as a market leader. They secured a significant portion of the market share and had the capability to acquire two established companies. Templeton Hardware had a constant growth vision to expand and diversify its company’s products and to enter different market segments to make it more profitable. Part of its growth vision required decisions which had adverse effects and Templeton Hardware’s willingness to take the risk to acquire the two companies can be considered a strength. Templeton Hardware’s decision to offer jobs to the franchisees shows the necessary measures taken to retain employees and keep them in employment without retrenching them.

2.1.2 Weaknesses

Weaknesses are internal aspects that could possibly endanger the business or obstruct further economic growth (Mindtools, 1996). Insufficient market research and lack of foresight led to a decline in sales targets and failing to achieve its profit expectations. The loss of product exclusivity resulted in Templeton Caravans not being able to attract its primary target audience, essentially the baby boomers, whom were perceived as having the capital and mindset to purchase caravans. Templeton Caravans had clearly failed to understand the trends, mindset and spending patterns of baby boomers and that led to dissatisfaction and avoidance. The change in management style saw few franchisees from Lodestone Landscapes accept offers in the new organisation, namely Templeton Landscape Solutions, and even they decided to leave after a period of time. The acquisition of The Great Outdoors led to generic products being produced. Products were generally seen as being mass produced and not client specific. By outsourcing the projects it had received, Templeton Landscape Solutions managed its talents poorly and overall service standards dropped. The company as a whole saw negative survey comments and this poor feedback started to feed its growing unfavourable reputation. The organisation also had ineffective management of its resources and had not been hiring enough staff to ensure work ran efficiently in the optimum manner.

2.1.3 Opportunities

Opportunities are external aspects that an organisation can use to its advantage to improve existing conditions (The Economic Times, 2014). Templeton Hardware should first look into achieving a good financial position which would improve its declining reputation and would enable it to secure bank loans for future investments. It should also look into sending its employees and management executives for team building activities and to increase the cohesiveness among them. By providing its staff with the relevant skills, its workforce can be effectively managed and relevant departments could have job specialists who have broad knowledge on their job scope. This helps to reduce the role ambiguity among its staff since an employee is assigned to few specific tasks and not many interdepartmental roles. Templeton Hardware could also invest in technological infrastructure to improve its customer management system. Employees can then follow up with clients in a more efficient manner and this removes the need for clients to repeat themselves which dealing with different. This system could also record a history of transactions to facilitate future purchases or warranty conditions. Templeton Hardware could move into creating a conglomerate-like business model by having unrelated businesses running under one roof, move its existing products into new market sectors or seek takeover opportunities from competitors whom are on the verge of bankruptcy.

2.1.4 Threats

Threats are components in the business environment that could cause potentially cause trouble for the organisation (The Economic Times, 2014). The large and increasing number of competitors could give potential choices to its customers and could deter them from purchasing at Templeton Hardware. This could lead to loss of market share and revenue and pave further downfall. Continuous usage of outsourcing its projects can result in its outsourcing companies becoming competitors in the future as they will now have direct contact with the clients. With respect to its employees, the company’s inability to retain existing employees would cause a loss in tacit knowledge and staffs’ years of experience and it may have to consume time and resources to train new employees. The rising cost of wages and higher employer to employee contributions could affect the profitability of the business. Also, if Templeton’s existing products lines become unpopular or not needed in large quantities, downsizing of the organisation would be a looming possibility.

The SWOT analysis diagnoses in a prioritised manner and actions can be taken accordingly. The SWOT analysis offers a way of collecting data but can sometimes be used as an overview of the situation.

2.2 Six Thinking Hats

The Six Thinking Hats is used in business settings by various organizations. During meetings, everyone present would have to put on different hats and approach the problems from different perspectives. This notion allows organizations to diagnose issues effectively, make better decisions and come up with creative ideas (De Bono Consulting, 2000). There is no one best approach to using the six thinking hats with reference to which hat should be used first.

2.2.1 White Thinking Hat

This hat is used to gather information that is required to address the issue at hand. Data is presented objectively without the presence of arguments and beliefs. (Volunteering North Queensland Inc, 2003) In the case of Templeton Hardware, it can be seen that it is currently facing an economic downfall and the presence of a new competitor in the market added pressure. Templeton Hardware had acquired two reputable companies, namely The Great Outdoors and Lodestone Landscapes. After the acquisitions, the franchisees were offered jobs but they were rejected. The centralized outlook was seen by the baby boomers as a big generic business which impacted the exclusivity of the caravans. Feedback from customers projected poor customer follow-up, constant rotation of sales persons and poor time management. The customers also disliked the impersonal approach of Templeton Hardware and outsourcing. Lastly, the board was unhappy as the business was declining.

2.2.2 Red Thinking Hat

Feelings and emotions are addressed when using this hat. (De Bono Thinking Systems, 1992). The red hat identified the board’s unhappiness and frustrations with the company’s performance. In addition, the franchisees who were offered jobs after Templeton Hardware’s acquisition left after sometime due to conflicting management styles. The board was also fearful of losing the company’s image and reputation to a competitor. The annoyance and dissatisfaction among customers was evident through the feedback received and the baby boomers were disappointed with the lack of exclusivity of the caravans.

2.2.3 Black Thinking Hat

This hat helps to identify complications and limitations in a situation and helps to steer the organization into the right path. (Mercier & Associates, 2012). The lack of market research conducted prior to the two acquisitions and the overconfidence of the board led to the downfall of Templeton Hardware. The board was not prepared for failure and there was no contingency plans in the event of a failure. Templeton Hardware did not understand the spending trends and mindset of their target audience, namely the baby-boomers, which led to the outlook of low brand exclusivity. This resulted in declining sales and possible bankruptcy. Poor customer service was evident from the customer feedback. Clients were unhappy that Templeton Hardware outsourced their projects instead of getting it done on their own. However, the shortage of manpower could be one of the factors why it had done so. It may be necessary for Templeton Hardware to increase their expenditure with regards to hiring new staff and training them.

2.2.4 Yellow Thinking Hat

This hat signifies positive thinking, new possibilities and advantages. (Volunteering North Queensland Inc, 2003). The acquisitions of the two companies showed Templeton Hardware’s plans to enter a new market segment and increase its profits. By increasing its staff, its efficiency can improve and can lead to a positive impact on sales targets and customer satisfaction. Better sales numbers can also increase the long-term sustainability of the organization and market share with the possibility of overthrowing its competitor.

2.2.5 Green Thinking Hat

This hat helps individuals to come up with new recommendations and alternatives to solve the company’s problems through creative thinking (Marissa Martinez, 2009). Templeton Hardware’s board could restructure the organization into a more de-centralized one and re-brand its products to increase its exclusivity. Templeton Hardware can improve productivity and time management standards by looking at how other companies operate. Advertisements can be placed in the media for job positions and opportunities to bring in an influx of employees to solve the shortage of staff. Employees should be given opportunities to voice out their concerns and put through special programs to enhance their level of service orientation and communication skills when handling customers. Job scopes can also be better enlarged and enriched in order to improve performance standards.

2.2.6 Blue Thinking Hat

This hat sets the agenda for meetings, manages the processes and helps to reach productive conclusions (De Bono Consulting, 2000). There is a primary need to identify the issues, analyse them and solve the problems. Some of the key objectives would be to ensure the long-term sustainability of the company, improving the job security of employees so as to prevent the shortage of manpower, improving customer satisfaction by sending the employees for training and lastly to regain a bigger piece of the market share in order to have a competitive edge over the new competitor. Templeton Hardware can reach these objectives by adopting a change in management. The staff should also be briefed about the challenges during and after the change (Holley et al, 2011). In addition, the creation of a clear company vision would better inform its employees of the company’s core values. It is also imperative that the transition is managed effectively and a momentum is sustained after this transition. After the transition period is over, the team can strategise to increase the profitability of the organization.

2.3 Brainstorming

Brainstorming is often used as an effective tool to come up with innovative solutions for problems which may exist internally or externally in an organisation. A general process can be used to create an outline of the issues and solutions to the key problems (Oslapas, 1993).

2.3.1 Problem Definition

The main problem to be addressed would be the declining yields and returns in Templeton Hardware’s business model. The customers, the company’s board and management and organisation’s circumstances are established criterias to be used to convene the brainstorming.

2.3.2 Collating Data & Creating Solutions

The management decision to acquire two new companies without enough market research and its lack of foresight is evident. It failed to foresee all the outcomes that may arise from the acquistion and was overconfident that the outcome would be a positive one. The solution would simply be to conduct more extensive research on market conditions and develop products according to the market needs and requirements. Templeton Hardware should also look into enhancing its brand value and exclusivity. The company’s board should take a more proactive role in making major decisions from a broader perspective and contingency plans can be drawn up in the event of an adverse outcome.

The change in management styles and poor employee management led to high job dissatisfaction levels. This impacted employee retention numbers and the employee’s willingness to remain at the organisation as they did not feel appreciated. The employees felt overworked and were unsure of their own job scope as they had been tasked with interdepartmental duties. Team building and bonding enables each of their staff to get to know one another better and increases the staff unity and morale (Spaho, 2013). To prevent the staff from feeling stagnant in their job, they should implement job enlargement measures by retaining its existing staff and retraining them with the necessary skills (Cloke et al, 2000). Employees can also be more involved in decision making as this would give them a sense of responsibility and make them feel valued in the company. A flatter organisation structure would bridge the gap between the management and the employees and help the management to get a bottom up perspective from ground zero.

Customer service declined as employees were usually engaged in multiple responsibilities. This made customers dissatisfied and sales targets were not achieved. Previously, it was perceived that if a customer had patronised the store and purchased something, he/she would return to make future transactions. However, this is a wrong perspective and Templeton Hardware should look into providing something which surpasses its competitors’ marketing strategies. This could be customer service or the use of an “no frills, rock bottom pricing” marketing strategy. By adopting a customer centric structure, they need to train staff to have higher service standards (Pathak, 2010). The staff should understand customer needs and should be rewarded accordingly using performance appraisals or awards as a form of recognition (Lucas, 2009).

3. Recommendations

Templeton Hardware should look into team building and team bonding activities to enhance cohesiveness while increasing its autonomy to involved more employees in the decision making. It should retain and retrain existing staff to increase job productivity and specialisation. Temporary downsizing should be implemented if the situation calls for. Through investments in technological infrastructure and by adopting a customer centric structure, it can enhance its customer management system. Templeton Hardware can also create a R&D department to conduct extensive market and product research. The board should also contribute by increasing its pro-activeness in making decisions and contingency planning. It can also look into potentially enhancing the brand value and image through marketing campaigns or word of mouth.

4. Conclusion

In conclusion, by using the appropriate Organization Development Consultant’s Toolkits such as SWOT Analysis, Six Thinking Hats and brainstorming, a deeper perspective of the company’s situation has been attained. The main problems have been identified and a constructive approach can be taken towards resolving the problems. From the diagnosis conducted using these toolkits, enhancing Templeton Hardware’s overall cohesiveness while maintaining the level of employee performance and management is a realistic target. Furthermore, implementing structural change strategies during organization change would further enhance organization effectiveness and better facilitate the transition period.


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