Advanced Organizational Behavior

Running Head: ADVANCED ORGANIZATIONAL BEHAVIOUR
Advanced Organizational Behavior
Student’s Name
University Name
Author’s Note

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Abstract
Espirit have been occupying major market shares in three most important industrial sectors
including industry, health care and energy. All the businesses operating in these three sectors are
trying to reduce operational costs and enhance their productivity so that they are able to compete
with the global forces. In this situation, the market stability of Espirit has been evaluated in this
report. It is evident that although the existing markets have been well maintained by Espirit, they
have not been able to expand into new markets and product domains as their competitors have
been able to do. SWOT analysis have been conducted in this report which highlights that the
major market forces that can affect the business of Espirit are low because of which they will
experience stability in their operations. The strategic analysis of the organization has been done
from the perspective of both internal as well as external environment implementing the strategic
tools of porter’s five forces, pestel analysis as well as SWOT analysis. Internal analysis includes
and evaluation of the core competencies, capabilities as well as the human resource analysis
strategy implemented by Espirit. The change in organizational culture has been analysed under
the Lewin's Change management model. In the end appropriate proposals for improvement have
also been developed.

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Table of Contents
Introduction......................................................................................................................................3
Organizational background of Espirit..............................................................................................4
Mission, vision and values statement of Espirit..............................................................................4
Value proposition of Espirit.............................................................................................................5
Strategic directions of Espirit.......................................................................................................5
One Espirit strategy.........................................................................................................................6
Organizational structure of Espirit...................................................................................................6
Organizational culture at Espirit......................................................................................................8
External analysis..............................................................................................................................8
Porter's five forces analysis..........................................................................................................9
Internal industrial analysis.............................................................................................................15
SWOT analysis of Espirit..........................................................................................................15
Change management strategy of Espirit........................................................................................18
Unfreezing..................................................................................................................................20
Change.......................................................................................................................................20
Refreezing..................................................................................................................................21
Recommendations and Conclusion................................................................................................21
Reference List................................................................................................................................22

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Introduction
Espirit holdings is a public owned organization manufacturing clothing accessories, jewellery,
houseware, footwear and others under the label of Espirit. Along with Ratingen Germany, the
organization is also located in Kowloon, Hong Kong. Espirit is a typical organization of this
industrial category. There are many other similar organizations coming up in the manufacturing
and retail sector of Germany. The demand for branded and budget retail products is helping
similar organizations to find specific target markets all over the world. Companies like Espirit
specialize in various product categories and there in fishes is on making a market extension by
product and business diversification. They have also implemented unique Change management
strategy which has given their business a new start from the bottom level.
The parent brand of Espirit is based in Germany with their headquarters in Ratingen. However,
they have become one of the biggest product retailers in the world with a second industrial setup
in hongkong from where they operate their Asian markets. This report makes a detailed analysis
of the strategic management of the organization. In order to do so, a detailed analysis of the
external environment of the organization has been conducted in order to determine the factors
influencing the external business conditions. The researcher has also undertaken internal
environmental analysis in order to understand the strength and weaknesses of the organization
that helps or hinders them in tackling the external environmental conditions in business. In order
to understand the internal strengths and weaknesses of the organization the core competencies,
other organizational capabilities as well as the resource strength of the organization has also been
analysed. In the last section of this research study, a strong Emphasis has been laid on analysis of
the organizational change that they have implemented in order to change their business culture.
On the basis of the change strategy, the probable future business opportunities have also been

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analysed and appropriate recommendations for future improvement in theorganization has also
been provided.
Organizational background of Espirit
The company is a public listed manufacturer as well as retailer of clothing, accessories,
jewellery, houseware as well as footwear products. The headquarters are present in Kowloon
Hong Kong and Ratingen in Germany. The biggest grossing year of the organization was the
financial year 2007-08 when they were able to achieve sale value of 3.25 billion Euro. Currently
the organization has more than 900 retail outlets all over the world and the product distribution
of the organization takes place over 8500 wholesale locations. The brand is operating in more
than 40 important countries. They operate on a franchise based product manufacturing line and
Red Earth is a subsidiary cosmetics brand of the organization. in 2011 there was a short drop in
the valuation of the brand when the sales limit went down to 1.4 billion US dollars. Since 2012
the brand value started to go down and their Global reputation also decline. However, after
bringing down most of their stores in China, Hong Kong and other important markets like North
America and Canada, in 2014 an organizational change was introduced with the appointment
with the new CEO. This helps the organization to become fast moving and develop
reorganization as a manufacturing and retail brand once again.
Mission, vision and values statement of Espirit
The industrial mission of the company is to maintain the brand Awareness of being a premium
brand in all the product categories where they operate. The organization has the aim of setting
benchmark in manufacturing quality, distributing Network and also in providing impeccable
retail service. There clothing, hardware as well as accessories industry are most flourished driven