The pubs in JD mainly serve beverages and food. More food categories and beverages can be developed. The customers will have more selects which result the increase of profits.
- Taking market share from rivals.
This can help the company increase the market share and decrease the competition.
Threat:
With retail licensing market adapting to changes in the ‘tied house’ system and other retail pub chains, more and more pub chains started their businesses.
- New policies may limit the operations.
There was increasing public and government concern about binge drinking and the consequent anti-social behavior, particularly in city centers. New policies may be come out to limit the operations.
- Guidelines to the management of JD on how to conduct a SWOT analysis
The management of JD can be conducted by the tool of SWOT analysis. Here below is a example of the guidelines of using SWOT to make actions.
- Using strength to overcome weakness
With the increase of competitors and substitutes, sales and profit growth in JD have slowed down. The share price is also declining. When the company acquired premises with rooms in the late 1990s, it developed budget hotel accommodation. The hotels are facilitated with bars. This helped the company to increase the sales and profit.
- Using strength to avoid threat
With the increase concern on the binge drinking and the consequent anti-social behavior, new policy would come out to limit the number of sales on products. This may lead to the decrease of profits. The open of new industry can help JD to avoid the problem of decreasing profit.
- Using strength to catch the opportunity
As JD opened the industry of hospitability, the company has more opportunities to expand its product items.
- Section 2: Organization culture
- Explain the organization’s culture in terms of ‘shared values’ and ‘taken for granted assumptions’
Shared values
Shared values lead to a combination of the organization. Every organization and leader should have a different set of values that are appropriate to its business situation.
In JD, the “lifestyle guarantee” which aims to give managers time for a life outside work is a good shared value. The managers work a 48 hour week with two consecutive days off and a maximum of four late closures a week. Training courses, area meetings and shift management meetings form part of the working week so that they do not encroach into staff leisure time.
The flexibility of working time in the company reveals the personalized management in JD. This leads to the efficiency and effectiveness of the work.
Taken for granted assumptions
JD has the motto of ‘cleanliness, beer, services and maintenance’. In order to meet the standard, the company has done the following things, such as:
They sell a wide range of real ale beers at relatively low prices. In each pub, at least a quarter of the space in each establishment is non-smoking. Meanwhile, each has a ventilation system which aims to ensure customers do not leave smelling of smoke.
- The type of culture JD has
According to Charles Handy’s theory, there are four types of organizational cultures which are separately power culture, role culture, task culture, and person culture. In this case study, the classification of JD’s culture is power culture.
Characteristics of power culture:
- This is when the business is controlled from a central point.
- The influence spreads out over the business.
- It is often illustrated as a spider’s web
Evident:
- JD was founded in 1979 by Tim Martin who has run the company for more than thirty years. In 2004, though he gave up day-to-day control. He continues to hold over 15% of the shares and to influence and contribute to the way the business operates.
- As executive chairman, Martin visited pubs all around the world. He is a noted euro-sceptic. In 2002, he printed 500,000 beer mats and put up10, 000 “save pound” posters to encourage customers to think about issue while they drink. 95% of company staff were happy for the Martin’s ‘NO’ campaign. It meant that he has a wide influence in the business.
- Relationship between organizational culture and behavior
An organization with power culture is always influence by the executive managers’ personal view and values. In JD, the founder Martin considers the people as the best asset in the company. Here are some examples of JD’s behaviors influenced:
- Examine policy documentation, mission, statements, memos and minutes of meetings. Staff in JD kept in touch with weekly newsletters, a monthly company video and by publicizing the minutes of Board meetings.
- Conduct regular staff surveys. JD place great importance on listening to and acting on. Feedback from members of staff on all aspects of the business.
- Hold focus group staff survey. Ideas and suggestions are discussed each week in company meetings and staffs are rewarded for their suggestions. Staff can also discuss company issues with visiting Board members like Tim Martin.
- Staffs are interacting freely with each other.
- There are no barriers preventing communication between groups.
- To what extent would the management approach in JD be different in different cultures?
If the category of the company’s culture is process culture, the management approach will be changed and it is not easy for the company to choose the management strategy on facing inappropriate organizational culture. Here is the comparison:
- Section 3 : Business Strategy
- Explain four possible strategies which organizations may adopt.
Michael Porter’s Generic Strategies (quickmba,2009)
- Which strategy JD would follow during 1980s and 1990s.
From 1980s to 1990s, the main strategy JD followed was broad differentiation Strategy.
Tim Martin’s model for a pub has meant that JD pubs were based on a number of distinguishing characteristics:
- They sell a wide range of real ale beers at low prices
- They do not play music or show TV programmes
- At least a quarter of the space in each establishment is non-smoking
- Each has a ventilation system which aims to ensure that customers do not leave selling of smoke
- Particular attention is paid to the toilets including the provision of specially adapted toilets for customers with disabilities
- All serve food available all day at each price.
Benefits of Successful Differentiation
- There was a large jump in the number of chains, increasing from 44 pubs to 600 pubs.
- In 2002, its share price rose to more than ten times its original value.
- It had a clear idea what sort of pubs it wished to operate.
- It was able to ensure that its approach was consistently maintained across all its outlets.
-
Compare the strategies in 21st century in terms of influences.
With the changes of the market environment, JD has changed its management strategy from differentiation to low-cost. Here is the comparison basing on the influence they brought to the company
- Assess factors JD had to consider before changing it business strategy/
Before changing its business strategy JD has to consider its external and internal environment. It can be analyzed by the tools PEST or SWOT analysis.
Political
- Relaxation of opening hours and late night opening
- EU influence and legislation regarding measures of drinks
Economic
- National and international economic downturn means people generally have less disposable income for socialising
- Rise in staff wages due to National Insurance and Minimum Wage increases
Social
- Media concern with negative aspects of ‘binge drinking’
- Increased awareness of health concerns
Technological
- Developments in delivery of cold beers and chilled ale
- Local interest in nightlife promoted via multi media, websites, blogs and social networking
Legal
- Smoking Ban
- Changes in Drink Driving Laws
(modelanswer,2009)
- “Business strategy” and “strategic choice”
The business strategy is including: Overall Low-Cost Provider Strategies, Broad Differentiation strategy, Best-cost Provider Strategies and Focus strategy. Finally, JD chooses the focus differentiation strategy in 21st century. The reasons are:
Limited services can not satisfy customer needs
JD did not show World Cup football and sales suffered as a result in 2002. And there are also no music player be offered. This situation leads to many customers choice the other pubs. In 2004 the pubs start to show televised football. More media facilities are provided in the following years.
The increase of competitors
With the increase of suppliers of drinks, JD is facing a fierce completion on sales and price. In order to increase its completion ability, most pubs now have a dedicated family dining area where children and adults can eat together.
Government limitation
There was increasing government concern about binge drinking and the consequent anti-social behaviour, particularly in city centers. It has a negative effect on JD’s sales. Finally JD removed price incentives to drink larger measures of spirits and reduced the amount of alcohol in its cocktail pitchers in 2004.
- Key issues that JD has had to take account of in order to manage its business strategy
- Section 4 : Changes
- With reference to “force for change”, explain why the strategy of JD changed over time.
Force Field Analysis is a useful technique for looking at all the forces for and against a decision. In effect, it is a specialized method of weighing pros and cons.
For JD, here is the analysis of forces for change:
Development of new technology
JD used not to play music or show TV program. With the development of media industry, people intend to watch TV and listen to some music. Some pubs now show televised football. In 2002, JD pubs did not show World Cup football and sales suffered as a result.
Pressure from competitors
By the start of the twenty first century, JD Wertherspoon was facing a fierce competition. The market had adapted to the changes in the ‘tied house’ system and other retail pub chain had been developing their business. Then, the market now appears to be over-supplied.
Customers want more services
With the change of living styles, customers need more additional service. For example, people want to have a quite suitable place for family gathered place. JD Wetherspoon developed a family area in some pubs.
- Choose one factor which may lead to changes in JD
Business ethics is generally used to examine ethical principles and moral or ethical problems that arise in a business environment. It is relevant to the conduct of business organizations and individuals in many aspects such as production and marketing and sales.
In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions is increasing. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s. This leads to some changes in JD, such as:
Ethics of human resource management
The ethics of HRM covers those ethical issues arising around the employer-employee relationship, such as the rights and duties owed between employer and employee. With the increase concern of employees’ right, managers have to pay more attention to protect the workers. In JD, it regards people as its best asset. It has flexible train policy and working hours. It places great importance on involvement and communication among staffs.
Ethics of sales and marketing
Marketing, which goes beyond the mere provision of information about a product, may seek to develop the company’s values and behavior. Marketing ethics overlaps strongly with , because marketing makes heavy use of media. However, is a much larger topic and extends outside business ethics. With the development of media technology, JD as a wine provider has to consider the influence on children. In 21st century, most pubs of JD have dining area which is limited to meal times. Children are not allowed in the bar areas.
- Roles played in dealing with changes
An organization cannot be able to adapt the changes itself unless it can influence the behavior of its stakeholders. The managers play a key role in the management of changes. Martin as the manager of JD was attributed to the success of the company. He played several roles in the company.
Figurehead
As the founder of JD, Martin has the largest power in the company.
Leader
With increase concern on the worker’s right, he fosters a proper work atmosphere for the staffs and motivates his people to do involvement and communication in the company.
Monitor
As executive chairman, he travelled round the country visiting pubs and carried all his business documents. After he gave up day-to-day control to the company, he still contribute to the way the business operate as he still holds 15% of the shares.
Disseminator
95% of company staff were happy with his ‘No’ campaign.
Entrepreneur
He has a policy of expansion which helps the company’s chains increase from 44 pubs to more than 600 pubs. With the decrease of profitability, he made some changes with altering the outlets.
Resource allocator
As the top leader in the company, he also controls and authorizes the use of organisational resources, especially when making strategies according to the changes.
- Advices
Advices on analyzing a change situation
- Being aware of required change is a very important element of the management of any organization.
- The internal and external environments can be summarized using SPELT analysis.
- The relative power and interest of the stakeholders of the organization should be identified.
- Identify the goals of the organization.
Advices on overcoming any resistance to change
- Changing an organizational structure
Moving from centralized to decentralized structure/ improvement in the quality of working life
- Changing management style
Involving employees more directly/moving organizational decision-making downwards
- Changing the people and the way they look at their tasks.
Team building/task design
- Conclusion
In this report, the company’s internal and external environment and the industry environment have been analyzed. The organizational culture and the related behavior were discussed. Some business strategies were analysed. With the changes the company has faced, some advice was given in order to manage the changes.
- Recommendation
- The total cost of the project should be concentrated.
- Changes is always happening, the analysis should be made on time.
- Market research should be made before decistion-making.
- Feedback should be collected from the staff and customers.
- References
Quickmba (2009), “strategy”, Available: (Accessed: 2009)
Oup (2009), Available:
(Accessed: 2009)
Modelanswer (2009), “strategy”, Available: (Accessed: 2009)
Scottish Qualifications Authority (2004), Business Culture and Strategy: An Introduction, China Modern Economic Publishing House
Chen, Jing (2009), Business Culture and Strategy: An Introduction, PPT
