Contemporary Management Issues

This study material explores the contemporary management issues faced by Mothercare, a former giant in the baby product industry. It analyzes the drivers for change, conducts a pestle analysis, and identifies strategies that could have been adopted by the company. The report also provides recommendations for improvement.

CONTEMPORARY
MANAGEMENT ISSUES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Inevitable Change........................................................................................................................3
Drivers for change.......................................................................................................................3
Pestle Analysis.............................................................................................................................5
Strategies to be adopted by Mothercare600.................................................................................7
Critical analysis of different aspects............................................................................................9
CONCLUSION AND RECOMMENDATIONS400....................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Change implementation is a regular and continuous process that needs to be doted in every
company so that they can remain in the business and operate in the market successfully.
Mothercare which used to be the giant baby product seller in the breaking decade is no longer in
the current position. The present report will analyse above change is necessary, what are the
different types of customers and their needs still went unmet. A pestle analysis will be conducted
on the healthcare co any and then lastly, the strategies that the company could have adopted in
the present context will be identified and evaluated.
Inevitable Change
The term change has become that phenomenon that needs to be constantly implemented in
the companies and organisations at all times. There is no one best place or position which a
business can get stuck upon an integrating change is a constant and inevitable process. The
environment has become extremely dynamic today where the constant evolution and
advancement in the innovation and technology, the emergence of new trends regularly etc. have
shown that the process of environmental scanning has become indeed extremely necessary today
(Kitching, 2016). In order to keeps a business running and in competition, all the latest
development that are necessary need to be incorporated in the business and for that aspect
change needs to be done. When an organisation refuses to incorporate the changing trends and
preferences of the industry in their own business operations, they quite simply pave a path
towards their closure or extinction. The redundancy that arises in the organisation due to lack of
change incorporation can ultimately culminate the entire existence of the business. The phrase
‘change or die’ is implemented quite literally for the organisations. This shows that the enhanced
innovation, globalisation, constant change etc. has led to the creation of an extremely dynamic
environment that demands change and innovation at every step.
Drivers for change
The case of Mothercare company is a classic example of why the failure to incorporate
change can lead to heavy losses and then ultimately in the closure of the business (Guiette and
Vandenbempt, 2017). The lack of analysing and taking into consideration the aspects of the
external and internal drivers of change that can arise in the business is the worst mistake that can
be done by any business. For the Mothercare and its ultimate demise, there are certain change
drivers that can be easily identified and analysed for the business in following manner:
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The internal drivers of change determine the factors that are inherent in the organisation.
Mothercare, who was once the only preferred store of mothers has now reached its state of
closure and there were many internal change drivers that could have been acknowledged by the
company. The external drivers are the factors that are present in the competitive environment and
need to be adopted in order to keep organisation in business. For Mothercare the two critical
drivers of change that can be identified are:
Expansion and diversification: Diversification and expansion are very critical aspects of the
company but at Mothercare, the stores were opened at an extremely rapid rate when the
organisation was stable which made it difficult to maintain the supply chain and distribution
network (Huynh and et.al., 2018). Additionally, the company diversified from their core products
of pushchairs, furniture and maternity clothing to various other sectors such as clothes for child,
bedding, feeding products etc. Through this expansion the company lost its resemblance for their
core products. The employees of the company need to be regularly upgraded and trained about
the different products that are being sold in the company and they should tend to assist the
customers. At Mothercare, the first time mothers were finding it very difficult to shop because
the sales assistants were uncooperative and did not completely know about the products that they
were selling. The leader of a company is strategizer that leads the company towards success by
taking correct and well measured steps. For Mothercare, the series if its chairman since 2011 has
always implemented turnaround plans. This led to the questions being raised in the leadership
and company was not guided into correct strategy adoption for themselves (Mothercare stores
close their doors for the final time this afternoon as the former high street favourite ceases
trading after 59 years, 2019).
Competitive environment: In the past decade, the market for baby products in UK has become
increasing competitive and this has affected the sales of the Mothercare. They have not been able
to implement correct strategies and rather introduced regular cost- cutting in their products. It is
general view however, that even if the company had not induced cost- cutting but had rather
remained focused on the quality and variety of the products that they were offering, even then
they would have managed to succeed. This is the major external driver where the change in the
requirements or trends in the market forces an organisation to change or modify is existing mode
of operation (Imran and et.al., 2016). For Mothercare, it was evident that the company did not
adapt to the regularly changing market trends. They did not implemented correct diversification
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strategies in the products and also the overall customer experience was not good. The majority of
the customer reported that the products were still fine with them but it was the lack of proper
service and up that ruined their overall shopping experience. The online investment of the
company was very slow and inadequate. Even though the company was able to successfully
emerge themselves in the online business in 2012, the problems with the interface of the site
such a geo blocking etc. were the major problems that customers were encountering and this
ruined the overall shopping experience with Mothercare (Aslam and et.al., 2018).
Therefore it can be said collectively that there were significant number of external as well
a internal drivers that if the Mothercare would not have ignored then they would have been able
to surpass all the difficulties. However, the two key drivers of change that can be indicated for
the Mothercare are the improper expansion and diversification and the competitive
environment in which the company was operating.
Pestle Analysis
Pestle analysis is an extremely effective tool for analysing the external environment that
surrounds the industry in which the company is operating. Pestle analysis will help in
ascertaining which are those critical aspects that are associated with the manner in which
company operates and ultimately ascertain the pressure that these impacts have on the decision
making of the company. Mothercare also would have be affected by such pressures created by
the external environment and this aspect needs to be critically analysed in order to ascertain the
manner in which the company was keeping up with the external environment requirements. This
can be understood effectively in following manner i.e. it can be further analysed in context of
Mothercare in following manner: Political Factors: Although the environment in which it was operating i.e. UK’s political
environment is comparatively much stable, however this factor was not of much impact
(Gallagher and et.al., 2019). The company was able to operate peacefully without any
political environment intervention. Furthermore, the policies and regulations such as easy
import and export procedures, quicker approvals and permissions etc. that UK has
developed for the company that are operating at international levels are so well integrated
that there are not any major difficulties that businesses face in their expansion and
development. However such was not the case for Mothercare who despite so many
provisions and support was not able to function satisfactorily.
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 Economical Factors: The economy of UK is already very well developed where the
spending power of the consumers is already very high and even the inflation rats re
lower thus showing an upward position in the economy’s movement. Mothercare was
also an extremely successful store that was operating in the economy in a thriving manner
(Wolff, 2018). When the revenue was high, the company opened number of stores in the
economy which was an extremely faulty strategy. The expansion of stores should have
been in a properly planned manner where the company could have focused on
diversification in the product range rather than going for expansion. Social Factors: The culture and society was in absolute favour of the products that were
being sold by the Mothercare Company and they even had a preference for its products
over all other baby care brands. However, the company failed to take into account the
multiple needs of the changing consumer segments and their failure to evolve along with
them made the brand redundant. For instance, the first time mothers often seek assistance
of the staff personnel regarding what products should they buy etc. but this was not
facilitated by Mothercare. But the growing age at which the females are now becoming
mothers has shifted to the later years and hence this has also affected the decision making
and the buying habits of the mothers now. The company additionally even failed to
understand that the demand of the customers was also increasing and now the range of
baby products that were being supplied had increased drastically (Arnold and et.al.,
2019). The impact of the social factors thus slowly turned negative even if the customer
wanted to support and shop form Mothercare only due to so many memories that they
had with this store but the failure of the company to understand that emption and to
further fail in taking feedbacks and acting on it slowly made the customers shift to other
cheaper and more feasible brands. Technological Factors: UK is a very advanced economy in the field of technological
innovations where they are regularly manufacturing and presenting newer and innovative
technologies that can be used in the industry. In the childcare industry as well, the market
evolved and there were many new aspects of shopping. The biggest modification was the
online shopping (Yu and et.al., 2019). However Mothercare was very late in adopting the
strategy of online diversification and this led to a negative impact in the customers who
were still loyal to the brand but could not access its products online. The technological
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environment thus created an extremely negative impact on the company as they were
ruled out of the increasingly competitive becoming game very quickly. Legal Factors: If the legal framework of an economy is not very flexible i.e. if it does not
have the adequate measures to protect the intellectual and copyright data that might easily
get copied, then it can affect the performance of the company eventually at a much higher
rate. However, such is not the case in UK where there are abundant laws giving
protection to the companies for their products. The Mothercare Company could have
tried for patenting and copyrighting some of the content that they sold but yet, now the
company is not with any such protected assets. Therefore, it can be analysed that he
factor was not a very appropriate one for the company. Further the expansion and
diversification strategies of the company need to be in accordance with the legal
com;aince and this can also act as major influencing factor for the business.
 Environmental Factors: The compliance to the environmental standards that have been
developed and then also ascertain the behaviour of the consumers based on this particular
factor helps in analysing that the company has been working in accordance with such
factor (Adhikari 2017). In case of Mothercare this was not a major issues as the products
that were being manufactured for babies and therefore they had to be devoid of any toxic
material and this again could act as a potentially interesting point but it was not utilised
by Mothercare. This created another point of potential loss of the company without any
profits.
The analysis of all the factors in the external environment depict that the company could
have used the different signal that the regularly evolving market of the industry gives to the
different business operating in that particular industry. The key factors for change in fostering as
these could be identified were the diversification strategies and the impact of competitive
environment. However, the Mothercare Company failed to do this and ultimately it created the
present situating in which the company currently is. However, the pestle analysis also concluded
that the modification to the Mothercare Company is very loud and the change was not scudded.
Therefore, the impacts of such mistakes that were made can be analysed in the current report.
Mothercare approaches to deal with situation
Mothercare is not witnessing an effective response in the market as per the current position of the
organisation in market. Organisation is facing problems in order to cope up with the market
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trends and current requirements of customers. Organisation is gaining losses in its business
operations which also resulted into that Mothercare needs to shut its stores in United
Kingdom market (Sharafutdinova and Steinbuks, 2017). Consumer satisfaction plays an
effective role for the organisation to generate profits out of the business operations. It can be
indicated that due to its outdated policies and strategies organisation could not able to deal
with the expectations associated with the consumers. Mothercare has been one of the
dominating name in the UK market and the below standard of organization performance is a
huge collapse for the market and the organisation for itself. Products of the Mothercare also
do not consist as the effective product portfolio that can attract customers. As per the recent
situation Mothercare is losing its market share on a constant basis. Policies of the
organisation also outdated in nature which also drives organisation in collapsing in the
associated market. Company could not effectively promote its products and also could not
cope up with the current trend of market which resulted negative for the company.
Opportunities followed by Mother care
Based on the current situation of organisation following opportunities are associated with
the Mothercare.
 E-commerce trade: E-commerce trade is an effective business growth opportunity
available for the Mothercare Business. Organisation can sale its products over internet
which also resulted into improved sales of company. Based on the current situation of the
organization it could not upgrade its infrastructure as per the current trends (Madonsela,
Mukwakungu and Mbohwa, 2017). By selling products over internet organisation will be
able to deal with all existing consumers along with attracting new customer base for
company’s products. E-commerce trade has been proved as the transformation in the
entire business environment. It is also a cheaper way to sale products. Organisation has
the immense opportunity to improve the sales potentials and also to improve the profits.
Along with the business development and growth opportunities e-commerce trade serve it
also offers challenges like data protection, data leakage, hacking and other key issues that
also restricts the advantages of the e-commerce trade. Mother care also needs to ensure
proper protection of the personal information of all customers.
 Product development: Mothercare can improve its sales potential by entertaining the
opportunity to upgrade its products as a part of the product development strategy. This is
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an effective approach to improve the consumer base by attracting new customers towards
the company’s products. Mothercare can promote all its products along with the
promotion of new product. This will also improve the brand value of the organisation in
market. Mother care could not develop its products based on the market requirements and
trends which has resulted into company lost the trust of customers. Product development
also involve investment of company's financial resources. Mother care has been going
throw tough time as the company has entertained losses. Product development will also
requires company to invest its financial resources. This is a risky strategic tool which also
causes to further losses in case of failure of product development strategies.
 Opportunity to improve the brand value: Mothercare has the immense opportunity to
improve the brand value of the organisation. Mothercare can emphasis over promotion
and marketing of company’s products. Campaigns can also launch to promote
organisation products and brand (Lu, Wang and Xu, 2019). This will improve the brand
value of the organisation in the market. Effective brand value can attract new
stakeholders towards the organisation. In all its marketing campaigns company can
promote all its products by featuring products features. In such a competitive market
promotion drives company to take competitive advantages in the market. Mother care
tried to improve its brand value at a very latter stage in its which causes the company to
suffer losses. Company already engaged in brand promotion strategies like social media,
radio, television, holding and other strategies. Due to recent time performance of
company it will be very challenging for the company to enhance its brand value in
market.
The above mention key opportunities available for the Mothercare to grow in the market.
Strategies to channelize opportunities
Mothercare can channelize the following strategies to utilise the above mentioned
strategies.
 Digital marketing: Digital marketing is an effective technique to channelize marketing
campaigns of the company. Company can launch all its promotional activities at different
social media channels and internet to promote its products. Social media marketing has
been witnessed as the new way to promote company’s products (Evans and et.al., 2017).
This also does not involve much investment of financial resources which is entertained in
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traditional promotional techniques. Along with digital networks company can also
utilises other promotional mediums like radio, television and other brand promotions
techniques. Digital marketing will also serve challenges like make the campaign unique.
All companies in market channelise the digital marketing strategies so it becomes
essential for the company to make the campaign create and engaging in order to gain the
full advantages of the campaign.
 Diversification strategy: Company can focus on diversification strategies to establish a
different brand image in market. This is a key technique that can utilise to improve the
brand value and consumer base of the Mothercare. Company can launch new products
that can meet up all current needs of the customers. This strategy will support company in
rebuilding its existing brand image. This strategy will support company in improving the
sales potential of the organisation. Diversification strategy is a critical strategic option
available for company. Mother care is facing failures in business which also resulted into
huge looses for company. Diversification requires immense amount of investment of
company's resources. Due to losses company is already facing limitations of resources. It
is important to channelise this strategy in a systematic way to gain the full advantages of
the strategy.
The above mention key strategies that can support Mothercare in entertaining above
mentioned opportunities to sustain in the market. Strategies can support company not just to
sustain in market but also to grow in the market.
Critical analysis of different aspects
Key themes associated with the business environment can be summarises in the following
manners.
Globalisation: Globalisation is defined as a process to expand the growth potential of
organisation by entering into the new market territory. Globalisation is an effective approach to
improve the growth perspectives of company. Globalisation also comprises with plenty of risks
along the with the opportunities. As the process of globalisation requires investment of
company’s resources (Akhter, 2017). It also serves immense amount of market competition from
well established brands in the market along with the small and medium size enterprises.
Globalisation also seeks improving the products quality to satisfy the needs and demands of the
consumers associated with the international market. Organisation also needs to deal with
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stakeholders expectations with the company in case of globalisation. When a company plans to
enter into a international territory the expectations associated with its stakeholders also enhance.
Company also needs to have an effective supply chain management in the new market to ensure
the proper availability of company’s products in market.
Innovation: Innovation is also key aspects associated with the business environment. Innovation
is defined as launching a new idea or a technique to conduct company’s operations. Innovation
supports company in establishing a unique brand image in front of target customers. Innovation
supports company in developing new products along with the up gradation of the existing
products of company. Innovation also comprises with multiple challenges as it seeks
organisation financial resources along with the investment of time and human resources.
Outcomes of the innovation are also uncertain in nature which also further enhances the risk
associated with innovation. Innovation also causes to big failure of company’s sustainability in
the market.
Corporate social responsibility: Corporate social responsibility is a legislative need company
needs to cope up. It is anticipated that in order to achieve its objectives company’s take plenty of
things like resources, natural factors and key aspects from the society. It is the responsibility of
the company to give back to the society in against to whatever it has already taken from society
out of its profits (Rittenburg, Gladney and Stephenson, 2016). Based on the legal requirements of
corporate social responsibility company needs to engage with a specific or more than one social
responsibilities. This is also a key aspect to improve the growth potential of the company in
market by promoting its brand image in market. In case of failure of social campaign company
might also lose its brand value in market this is also a key challenge associated with the social
responsibility. Corporate social responsibility create extra burden over the company's financial
stability. Mother care Company is already entertaining losses in its business operations. In such a
situation activities operated under corporate social responsibility will create more financial
burden over the company's resources.
Sustainability: Sustainability is defined as a process to keep remains company existence in the
market competition. All companies operate its business operations by aiming market
sustainability and growth. This can also be explaining as the rewards against the productive
performances of company in market (Sales and Beschorner, 2017). Company implement
different strategies such as low cost strategies and product development strategies to keep sustain
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in the market. Sustainability also caters many challenges such as challenge of upgrading the
product quality on a constant basis, challenge of new product launch, challenge to satisfy
company’s consumer base and other key challenges.
Ethics: Ethics is pointed as channelizing all positive and legal policies and approaches to run
business operations. Consumers also expect from the company that the organisation must be
utilising ethical practices to conduct business operations. Ethics also caters many challenges like
coping up with legal requirements and other key challenges. Company needs to deal with all
challenges in order to cope up with the ethics in business operations.
Effective communication: Effective communication is a process which involve conveying the
proper message to company’s customers. Communication has a very effective significance in the
business of company. In order to grow in market company needs to communicate about all
products and services with all potential consumers of company (Lu, 2017). Effective
communication also comprises with different issues like upgrading the communication system
on a continuous basis and other challenges like operating the communication system.
Communication is also among the key tool which is needed to operate all functional activities of
company. Communication is an medium which drives coordination between departments of
company involve in its organisation hierarchy.
Cross culture barriers: Cross cultural barrier is a key part of the all multinational;
organisations. In case of business expansion company also needs to face the cross culture
barriers. As the every market is influenced with the culture of country. In case of companies
expanding its business at new geographical locations it also need to face a different cultural
background. Cross cultural background also involves multiple challenges that also need to
address by company. As the different culture also demands different products requirements of
Company also needs to cope up with all cultural requirements in order to attract customers in
such new locations. Company also need to drive its policies based on the cultural requirements of
the associated market sector.
Stakeholder interests: Stakeholder interest is defined as the outcomes associated with the
stakeholders involved in different business operations of company. This is more like a
stakeholder expectations in company’s business. In order to conduct business operations
organization needs to engage with different stakeholders to operate smooth operation functions
(Gródek-Szostak and et.al., 2017). Every stakeholder consist its own interest in company
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business. Organisation needs to deal with the interests of all stakeholders in order to entertain
growth in the market. Stakeholder interest also comprises with different challenges. Company
also needs to face challenge to cope up with expectations, increasing demands of stakeholders,
expectations of effective returns all the time and other associated challenges.
The above points indicate about the key aspects of the business environment and also
summarises the challenges associated with different themes.
CONCLUSION AND RECOMMENDATIONS
Conclusion
This report has summarised about different dynamics associated with the business
environment. Different drivers of change have also concluded in this report. Different
business environment factors like political, economical, social, technological, environment
and legal factors associated with business environment has also summarised in this report.
Different opportunities like product development, diversification and other key opportunities
available for the organisation have also concluded in this report. Strategies like digital
marketing, diversification and other key strategies has also summarises in this report.
Critical analysis over different themes has also concluded in this report. Themes like
globalisation, innovation, corporate social responsibility, sustainability, ethics, effective
communication, cross cultural barriers, stakeholder interest and other key factors.
Recommendations
Mothercare can channelize digital marketing strategies to improve its brand value in the
market. Company can also promote its products its products at different radio channels and other
key promotion channels. Company can also focus over product development policy. With the
support of diversification strategy company can built an effective brand image in the company
(Trad and Kalpić, 2016). Mothercare can also launch an effective marketing strategies like brand
promotions and holdings to improve its brand value in market. Company can also look for selling
its products over internet. It can also be recommended that company can reduce its total number
of stores in United Kingdom so that company can handle its expenditure. Company can contain
its stores open at the prime locations which are generating effective returns to the company. It is
recommended that company can keep its stores open at all profitable business locations that are
generating effective returns. Closing such stores who are engaging looses will improve the
company’s overall profitability from conducting business operations. Company can also make
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strategic alliances with other competitors to improve its market presence. Strategic alliance will
improve the company’s sales potential in market. It is also recommended that online selling of
products with the support of e-commerce website is also a key technique to improve the sales
potential of company. Company can launch its own website to deal with public relations in
market. Company is currently dealing is low price segment which also can be changed by
repositioning the brand image of company.
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Online
Mothercare stores close their doors for the final time this afternoon as the former high street
favourite ceases trading after 59 years. 2019. [ONLINE] Available through :<
https://www.dailymail.co.uk/news/article-7878815/Mothercare-stores-close-doors-final-
time.html>
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