Organisations in a New Zealand Context

This report provides understanding into the strategic route of Kathmandu, a New Zealand based retailer, and its ethical and sustainability practices.

Running Head: MANAGEMENT 0
Organisations in a New Zealand Context

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Table of Contents
Introduction................................................................................................................................3
Business Framework..................................................................................................................3
Stakeholders and Ethics.............................................................................................................6
Conclusions................................................................................................................................9
References................................................................................................................................10

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Executive Summary
Kathmandu is a New Zealand based retailer selling outdoor gear and clothing for
travel and adventure. This report is intended to provide understanding into the strategic route
of the organisation and its ethical and sustainability practices.
The first section of the report highlights its business framework-outlining core
capabilities of the firm help in achieving competitive advantage in the industry. The next
section states about stakeholders groups and ethical practices of the organisation and the
value of these to the organisation. In last, Kathmandu professional and ethical behaviour are
also being identified and the company engagement with latest sustainability and ethical
practices.
Considering all, it can be said that Kathmandu has gained loyal customer base in New
Zealand and there are various opportunities present to the company which need to be tap on.

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Introduction
In this globalized world, the business environment is very complex and dynamic. The
environment in which business functions are changing continuously and make it difficult for
the organisation to anticipate the relative influence of a particular external force or factor. In
association with it, this report outlined the nature of business entities, their stakeholders and
the risks to which firms are linked. With regards to this, the company core capabilities are
also evaluated in order to identify its competitive advantage. The major part of the report is
divided into two sections i.e. Business framework and Stakeholders and ethics. In addition,
the company is selected as Kathmandu, a retail chain based in New Zealand.
Kathmandu is an adventure wear vendor that is doing great in the equipment market
and outdoor apparel having extensive range of quality products. The company was started in
1987 and its headquarter is situated in Christchurch, New Zealand. However, their operations
are extended in many other nations also such as Australia, United Kingdom, Germany and
United States. At present, the company has more than 167 stores having nearly 2000 plus
employees (kathmanduholdings.com, 2019). The company global net sales in 2018 were
noted as US$ 11.9m.
Business Framework
It is very hard to overstate the importance of choosing the entity that is right for the
business. Deciding on the proper structure for a new or existing business depends upon the
type of products or services a firm will provide to the customer and also on the financial
situation (Boons & Ludeke-Freund, 2013). The various set of factors, i.e. partnership, vision,
mission, values, strategy and governance/alliances offer different sorts of value and demand a
set of rules to follow. It is significant for the organisation to synchronize all these factors in
order to create higher value for the firm, employees and customers.
Factors help in creating business entity
Kathmandu is an inspirational iconic brand with the core purpose and vision is to
motivate and support people to live their dreams of adventure and travel with full passion. In
the company, the culture makes the employees an integral part of the organisation and
endeavour to offer opportunities for the personnel to build out necessary skills. In addition,

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the organisation ethos is the basis on which the firm stands and it reflects in each of their
products, every individual they employ and the way they benefit the customer.
In addition, the key values that help the company in developing a strong business entity
include –
 Integrity – The Company undertake its business in an ethical way and always
endeavour to do the right things. This helps Kathmandu to build positive image in the
communities.
 Directness and Openness’s – The Company creates a productive environment and
maintains transparency and this encourages efficiency by eliminating bureaucracy
(kathmandu.co.nz, 2019a).
 Passion and determination – The Company undertakes every strategy with full
passion and determination and make the job done in an efficient manner. This ensures
accuracy and efficacy in the strategic decisions of Kathmandu.
 Resourcefulness – The Company celebrates inventiveness and ingenuity and also
promotes ‘can-do’ approach and a ‘hands-on’ approach.
 Love of Travel and Adventure – This is connected with the soul and heart of
Kathmandu and all its daily business turns around adventure and travel. Hence, this
revolves around the company core competencies and core values.
 Environmental Action – The Company also believes in sustainability standards and
thus ensure minimizing the environmental footprints (kathmandu.co.nz, 2019).
These facts and values help Kathmandu in creating a strong business entity with
revolving around the culture and increased brand awareness in the market.
In relation with partnership, Kathmandu New Zealand has various partners doing
groundbreaking work in developing programs in the area of education, financial, animal and
heritage conservation and poverty relief. The company is undertaking great strategies with
continuing achieving various goals with the partners like Australians and New Zealand Red
Cross, conservation projects in New Zealand, Australian Himalayan foundation and
Himalayan Trust. With the help and contribution of various partners, Kathmandu has
extended its reach to various segments by developing its services in various areas
(kathmandu.co.nz, 2019b). Hence, this also aids in the development of the whole firm in
comparison to the Australian and New Zealand markets.
Core capabilities

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In the markets of New Zealand, Australia and the UK, Kathmandu is doing great with
its speciality in adventure clothing and quality travel. The company was entered into the
market in 1987 and at present, Kathmandu has effectively developed a loyal customer base.
The company has an in-house design team accountable for 95% of its sales of product. In
addition, the company also has traditionally been supporting environment friendly products.
For instance, the company was granted as the Best Year on Year Change in Climate
Performance in 2014 and contributing to a reduction in the greenhouse gas emission of up to
94% and also water wastage (www.annualreports.com, 2014).
The designers of Kathmandu are also using tool from the Sustainable Apparel
Coalition (SAC) to mark and enhance product sustainability at the design phase. In addition,
the company ensure its performance by using Higg Index, a self-assessment tool help the
company to evaluate sustainability and benchmark performance in contradiction of others in
the industry.
The company also leverage their brand equity to expand on international level while
using a capital light model. The company also gain competitive advantage with the
acquisition of Oboz design in April 2018 and this increased their core capabilities by sourcing
and selling outdoor and travel footwear (sgbonline.com, 2018). This acquisition helps the
company to grow its North American customer base in a more effective way. Their Omni-
channel is also considered also add-on to the company core capabilities with providing a
channel agnostic offer – one range available to all consumers wherever they pick to shop.
To every company, HR resources (employees) are the inimitable help firm in
achieving competitive advantage. In their entire network, Kathmandu employees 2000 plus
people that includes permanent, casual and part-time members. The support office of
Kathmandu is based in Christchurch, New Zealand and engages nearly 180 team members
(kathmandu.co.nz, 2019). In addition, the company has a centralized organisation structure
facilitate quick decision making where the departments extend from marketing to finance,
design to supply chain, HR to store support, online and consumer service to IT support. In
Melbourne, the company also have a parallel office engaging nearly 65 individuals working
mainly in retail operations, store design and development, online and marketing. This
interlinked value chain in relation with internal structure of the organisation helps the

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company to formulate relevant strategies on proactive basis and thus ensure sustainability of
the organisation for a longer period of time.
In relation with economic environment, the company is also creating knowledge
management with enduring brand positioning, market leadership and value proposition,
which is strengthened by its vertically integrated business model, will endure providing
strategic competitive advantage and resilience to deal with a comprehensive market
downturn. Knowledge management solves various problems of Kathmandu and thus adds a
real client value. For instance, it enhances quality and ability of Kathmandu to collaborate by
standardizing ways of working and enabling discussions under the supervision of
management.
Stakeholders and Ethics
Stakeholders
Stakeholders can have a significant influence on decisions relations to various
functions of an organisation. A stakeholder can also be termed as entity or any person having
an interest in the success and failure of a project or business. The analysis here is being based
on diverse interest of two stakeholders groups specifically community and customers in the
company and also evaluate whether the stakeholder's interests are line up with shareholders
and then suggesting necessary measures. The two major stakeholders have been identified for
Kathmandu includes communities and customers.
The company has solid community links due to its CSR program and one of its
sustainability goals is related to “actively strengthen the communities where the company
functions”. This goal is achieved by Kathmandu by offering financial aid and environmental
sustainability targets. The company also developed its Summit Club Member Adventure
Program, that help to gather the loyal customer base by helping them in attaining adventure
objectives like Yearly Summit Club Trek (kathmandu.com.au, 2019). In addition, Kathmandu
also offers various help to many communities in the Nepal region like Solu Khumbu. In
2014, the company donated LuminAID lights to the area and also contribute to rebuilding the
earthquake hit towns of the country. Through corporate specific endeavours, shareholder
value is developed while various communities’ project that company is connected with do not

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bring extra yield. Therefore, the interest of community is very hardly associated with
shareholder value creation because their engagement with community is focused on
becoming a well group citizen. It can be said that offering financial support to the groups is
an expensive practice like contributing over 1000 products to Red Cross Australia. The
company might evaluate their complete carbon emissions in relation to their pledge to
decreasing their ecological effect. In relation to their CSR program, the company also
committed to sustaining Green Star Rating, showing the sustainable actions carried out in
Kathmandu. The stakeholder value will be created by decreasing carbon emissions and thus
creates a superior environment for the civic.
Considering the consumers, they do not have much influence in the management
strategies and strategic decision making process in relation with Kathmandu in comparison
with other stakeholders like suppliers and shareholders. However, they are the final purchaser
of their products, the company undertake their interests as per the current market trend. For
instance, the Summit Club members have a significant consumer base to Kathmandu and
their fulfilment is very necessary because of the money value they provide to the organisation
as trustworthy consumers. The company purpose is also well-aligned with the interest of
customers while bringing high-quality innovative solutions, well-designed and priced
competitively. Making strategies as per fulfilling of these customer demands will bring more
revenue and sales growth and even high net profits, that is directly aligned with the interest of
shareholders. One of the strategies of Kathmandu is also achieving higher brand awareness
and Summit Club associates have been reflected, value consumers (kathmandu.com.au,
2019). Therefore, the company can evaluate the rate of growth with the number of consumers
listed as members of Summit Club. If there is an increase in rate of growth, the company may
determine that more consumers have been enticed to company’s loyalty consumers. On the
other hand, if it is not increasing, the company can come up with new solutions and strategies
like feedbacks of customer via survey online related to experience during shopping and
whether they found that the products were rated objectively. It may help to identify whether
value has been produced for consumers (Lusch, Vargo & Tanniru, 2010).
Professional and ethical behaviour
Professionalism and ethics in the workplace are the guiding principles that an
individual or the firm has recognized (Jenkins et al, 2008). In every organisation, there are

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some minimum standards of ethics and expectations just like a handbook listing specific
behavioural expectations guided by moral code.
Kathmandu also has a governing conduct principles handbook based on 14 principles
such as openness, business courtesies, financial and other inducements, compliance with laws
and regulations, financial integrity and so on. For instance, the company ensure that all
personnel must bear themselves with integrity and openness in the greater interest of the
organisation related to all business transaction while dealing with employees, shareholders,
suppliers, creditors and government. In addition, the company also ensure financial integrity
with having of tough financial accounting measures supervised by the audit, management and
risk committee and also check that none of the employees falsifies company transactions and
documents in any way. It is hard to constantly ensure agreement with appropriate Laws, Code
of Conduct, Organisation Policies, Measures and Rules and so, every individual cooperation
is necessary.
Considering engagement with sustainability practices, the New Zealand-based
enterprise is devoted to investing in sustainable and ethical practices through all facets of the
business, from working conditions in its factories to the resources it uses and the
environmental footprint of its 160 stores crossways NZ and Australia. Kathmandu believes
that sustainability is about positive behaviour change and awareness. In relation to
sustainability, the strategy practice the Sustainable Apparel Coalition (SAC) Higg Index
framework and bring into line with the United Nations Sustainable Development Goals
(kathmanduholdings.com, 2012). The Higg Index allows organizations at any phase of their
sustainability passage to decrease their environmental influences and strengthen the
communities where they function. The company certifications and partnership help in guiding
and providing a future pathway for improvements. For example, the company set an objective
to reduce emissions by 20% from 2012 levels by 2020. Other than this, the company is also
converting waste into gear with the help of Repreve recycled polyester suite which upcycles
plastic bottles.

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Conclusions
Kathmandu has increased its brand exposure in mainly New Zealand, Australia and
the United Kingdom. The organisation has also maintained loyal customer base with its
strong business vision and culture. However, the company is required to capitalize on
opportunities with expanding its operations into the global markets where potential for
growth is high. The company also have opportunity to integrate current technologies with the
e-commerce platform and social media. This will directly help in increasing consumer sales
and thus ultimately result in greater shareholder value for Kathmandu.
From future perspectives, the company can go up with disruptive innovative
technologies such as data mining, augmented reality to build up realistic e-commerce retail
platform.

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References
annualreports.com. (2014). Kathmandu – Live the dream. Retrieved from
http://www.annualreports.com/HostedData/AnnualReportArchive/K/ASX_KMD_201
4.pdf
Boons, F., & Lüdeke-Freund, F. (2013). Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner production, 45(1), 9-
19.
Jenkins, J. G., Deis, D. R., Bedard, J. C., & Curtis, M. B. (2008). Accounting firm culture and
governance: A research synthesis. Behavioral Research in Accounting, 20(1), 45-74.
kathmandu.co.nz. (2019). About Us. Retrieved from
https://www.kathmanduholdings.com/about-us/people/
kathmandu.co.nz. (2019a). Values that Drive Us. Retrieved from
https://www.kathmandu.co.nz/values-that-drive-us
kathmandu.co.nz. (2019b). Our Partnerships. Retrieved from
https://www.kathmandu.co.nz/get-to-know-us/our-community/our-partnerships
kathmandu.com.au. (2019). Summit Club Adventures. Retrieved from
https://www.kathmandu.com.au/summit-club-adventures
kathmanduholdings.com. (2012). Policies and Procedures. Retrieved from
https://www.kathmanduholdings.com/wp-content/uploads/2012/08/KHR-3-14-Code-
of-Conduct.pdf
kathmanduholdings.com. (2019). Kathmandu Stores. Retrieved from
https://www.kathmanduholdings.com/about-us/stores/
Lusch, R. F., Vargo, S. L., & Tanniru, M. (2010). Service, value networks and
learning. Journal of the academy of marketing science, 38(1), 19-31.
sgbonline.com. (2018). Oboz To Be Acquired By Kathmandu. Retrieved from
https://sgbonline.com/oboz-to-be-acquired-by-kathmandu/