Proposal for Change Report 2022

<Kovacs Design Furniture>
Proposal for Change
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Principles of Change Management - Assessment 1 - Business Case for Change - Block 2 - 2018 Page 1 of 17

1.0 EXECUTIVE SUMMARY/PURPOSE
The report demonstrates the need for change to restructure the business and ensure sustenance in the competitive business
environment along with the aim of creating a positive impact on the bottom line of the company, i.e., Kovacs Design Furniture in
New Zealand. There has been stiff competition in the marketplace, because of which, the sales revenue have fallen for the
organisation and also the profit level declined with the reduced value of the NZ dollar too. The manufacturing equipment and
machineries were outdated, which not only hindered the production level, but also had not been environment friendly, which also
deteriorated the brand image and reputation.
Thus, the change has been to remain sustainable and be “clean and green” by following the various business
sustainability principles, furthermore, manage sustainable measures to become successful in the competitive business environment.
This is basically about managing up-gradation of existing production to a clean and green production system for managing sustainable
behaviours and promote betterment of community and the environment. The benefits of this change management could be the
management of business sustainability, which could bring innovation and at the same time, resolve the risks associated with the
business functioning effectively too. Therefore, this change would bring sustainability and also facilitate the management of business
principles, thereby, ensure proper restructuring of business along with increased production and sales for maintaining a positive brand
reputation.
The report is presented to discuss about the management of change within the furniture manufacturing company to facilitate
innovation and ensure meeting the demands and expectations of the customers largely too. The topic will demonstrate the various
benefits that will be attained with the management of this change, furthermore, ensure creating a positive impact on the business
functioning in terms of higher revenue generation along with attaining competitive advantage in business too. I have been the Trainee
Manager and have been appointed with the task of managing a proposal to restructure the business and ensure implementation of
successful change for gaining sustained competitive advantage in business.
2.0 BUSINESS OUTLINE
The background of the organisation, i.e., Kovacs Design Furniture in New Zealand has operated in New Zealand for the past
20 years and the business operations have been consistent considering the fact that it has managed its functions and processes all over
New Zealand and off shore. The company consists of a stable workforce and thus the production and sales have been consistent, which
has helped in enhancing the skills and knowledge of the workers as well as prevented any negative impact on the brand reputation and
image. The industry within which the company has operated is the furniture goods industry and the furniture products are of good
qualities too, which are mainly targeted at the middle and premium segments of market comprising of the customers (Doppelt, 2017).
The mission of the organisation is to design furniture by hand that can be known by heart and liked by everyone. The company is
specialised in the designing and construction of good quality luxury furniture that are delivered to cater the need and preferences of
people all over New Zealand (Kovacs.co.nz, 2019). The company has remained true to its ethics and values and has inspired people to
uphold and endure.
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Vision and values
The vision of the company represents that the “True artisan furniture is made by hand and known by heart”, which has also allowed
the company to remain true to its ethos and manage good quality furniture goods that are produced to inspire, uphold and endure.
According to the organisation, the values are managed with the focus to build “brand reputation”, which also ensures that care has
been taken for maintaining the tradition of hand made and artisan focus all throughout the various stages of production. This is
something about the company that makes it special (Kaufman, 2017).
The target market consisting of the customers are mostly the luxury segment clients who prefer to enjoy a luxurious lifestyle by
buying luxury furniture goods and improve their life style furthermore. The company has also targeted the customers who are in need
of value for money furniture goods that could not only meet their needs, but would also present a good ambience and excellent
outlook within the house when the furniture is placed alongside other goods present. The primary target market has been the premium
market segment comprising of the customers, who prefer to acquire good quality furniture goods with the latest in technological
aspects and also the goods that have been combined with the old fashioned sense and feel of fine woods (Howard-Grenville et al.,
2014). The products and services are provided for home purposes and also could be used at offices and these products have shared a
common bond of quality appreciation though lacking the price constraints too. This should also provide an excellent outlook within
the house when the furniture is placed alongside other goods present (Kovacs.co.nz, 2019).
The planned future markets include the market segments comprising of the customers who prefer environment friendly goods
and also the lower class segments where customers need value for money products and services to cater their needs and preferences.
To resolve the business sustainability issues and overcome the problems of maintenance to remain competitive, the business needs to
follow the principles of sustainability management and at the same time, Transfer the Invercargill based maintenance team members to
Auckland for supporting the maintenance team present in Auckland (Kohlborn et al., 2014).
3.0 THE CASE FOR CHANGE
From the case study, it could be understood that the company was facing high competition with the presence of multiple
rivalries that delivered similar kinds of furniture products and services in the marketplace. The manufacturing equipment and
machineries lacked up gradation, due to which there have been increased costs of maintenance associated with the business functions
and processes. These equipment and machineries’ usage often resulted in being unable to meet the sustainable requirements and
thereby failed to become environmentally responsible, which also damaged the brand image and reputation. Due to the high
competition within the industry, there has been high level of pressure from the companies within the competitive industry and thus
there is need to facilitate innovation by following the best practice principles of business sustainability by focusing on the “clean and
green” aspects to remain sustainable within the concerned industry (Lewis, Cantore & Passmore, 2016). These major issues can often
be associated with the lack of ability to manage sustainability and at the same time, could experience lack of innovation and creativity,
which should enable the company unable to deliver the expected outcomes and also fail to meet up to the demands and expectations of
the clients largely too (Kovacs.co.nz, 2019).
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Due to this, the management of change is necessary, that too, by focusing on the sustainable approaches to remain green and at
the same time, improve the business functioning by focusing on the environmental friendly aspects too.
It has also been found that the profit level declined in the past few years for Kovacs Design Furniture in New Zealand, which has also
resulted in ensuring that the manufacturing equipment and machineries are updated by aligning with the sustainability management
principles to remain environmentally responsible and even reduce the costs of operations and processes to a large extent (Frankland et
al., 2013).
The time that might be taken for the company to payback or shift to profitability would be about 10 to 12 months.
3.1 RISK ASSESSMENT - BENEFITS ASSOCIATED WITH MAKING THIS CHANGE ARE
It is anticipated that the following benefits will arise from making this change. They are:
 The management of change at Kovacs Design Furniture in New Zealand considering focus on the sustainable measures would
ensure sustainability management and ensure higher revenue generation too
 The management of change would also enable reduction of costs associated with the management of business functions and
processes
 The other major benefit or advantage could be the management of this change according to the sustainability and financial
requirements should result in accomplishment of the project undertaken within the allocated budget.
 The up-gradation of the machineries and equipment would be possible which could also reduce the costs associated with the
maintenance
 The organisation would achieve sustainability by becoming environmentally responsible as well as adopt environmental
friendly measures to create lesser harmful impact on the environment too.
3.2 RISKS ASSOCIATED WITH MAINTAINING THE STATUS QUO
There are a number of risks to us as a Company if we do not make this change. These are:
 The most important risk could be the lack of innovation and creativity, which would make the company unable to attain the
desired level of competitive advantage when compared with its competitors in business
 The bills and costs associated with the maintenance of business functions and processes would keep on increasing, ultimately
leading to business loss
 Another drawback could be the negative impact on the environment and also failing to manage the sustainable measures
needed to remain environmentally responsible (Hayes, 2018).
 Service support might be complex as some of the business functions and processes have been supported from the Head
Office in Auckland only
 The level of profit would decline consistency and prevent the company to attain a competitive edge over its competitors too.
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