Analyzing Contemporary Management Issues: The Mothercare Case Study

This report examines the contemporary management issues faced by Mothercare, a company specializing in baby products and maternity wear. It begins by defining contemporary management issues and introduces the Mothercare case study, tracing the company's history and eventual closure of stores. The main body of the report delves into the drivers of change, specifically highlighting technology and innovation as critical external forces impacting Mothercare. It explores how globalization influenced the business, emphasizing the need for technological advancement and online presence. The report then analyzes how these drivers affected Mothercare's strategic decision-making, including changes in organizational culture, strategies for research and development, technological strategies, sustainable development, and the use of margin analysis. A PESTLE analysis provides a comprehensive view of the political, economic, social, technological, legal, and environmental factors influencing the company. The report concludes with recommendations for how organizations can enhance their responses to contemporary challenges, drawing lessons from Mothercare's experience.

CONTEMPORARY
MANAGEMENT ISSUES

Table of Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY............................................................................................................................................3
Drivers of change...................................................................................................................................3
Changes are inevitable due to innovation and globalization...................................................................5
Drivers of change are impacting strategic decision making...................................................................6
Pestle analysis of Mothercare.................................................................................................................8
Current responses of organization for numerous changes....................................................................10
Critical analyses of themes and theories..............................................................................................12
CONCLUSION........................................................................................................................................15
RECOMMENDADTION........................................................................................................................15
REFERENCES........................................................................................................................................16

INTRODUCTION
Contemporary management issues refers to a way of examine that is needed to resolve
the issues which are emerging in the business. It is raised become of the poor past performance
or some managerial decisions which are wrongly taken on earlier basis. This is due to adopting
false practices in the business. It also seeks for revaluation of management practices in the
business.
The case study is based on Mothercare plc. It is founded in the year 1961 by Salim
Zikha and James Goldsmith. The company is general merchandise which is engaged in the
business of baby products and products of maternity. The subsidiary named as Mothercare's
United Kingdom which has 250 UK stores in the year 2017. The number of stores reduced up to
79 by 2019. By November 2019 all the stores has been closed as it was placed into
administration.
The project report will explain the key dynamic forces that impact a business or society.
It will critically evaluate these forces as per the decision making of effective strategies.
Furthermore, it will demonstrate key dynamic forces that affect the organization in
contemporized business. Moreover, it will explain how Mothercare plc has strategically
responded to such driver’s driver's context of pressures. Lastly, It will recommend that how an
organization can enhance those responses.
MAIN BODY
Drivers of change
Drivers of change - Changes in the business are always inevitable. The main reason behind the
change is to empower, strengthen and improving business progress. Drivers to the change helps
the firm to identify that which type of changes they are dealing with or what type of exact
change is needed in the firm (Drivers of Change, 2019). It should be clear that while executing
that change there is no chance of misalignment between various departments of the company.
These drivers of the changes are of two types one is internal and other one is external. Change

driver is an external and internal pressure that change or shape an organization. This might be a
change in organization strategy, plan and operations.
 External: These types of the drivers are those which are caused from outside of the
business. These changes can be base on environment, imperatives of business,
marketplace requirements and organization imperatives (Wagner and Pfnür, 2018).
 Internal: These types drivers need to identify at the earliest at it contribute towards
business losses. This one is also harder to investigate. These drives of change are
management as well organizational oriented. So much to focus on it otherwise it leads
to cultural imperatives, rude employee behavior and harsh leader mindset.
As per the market research the two drivers of change for Mothercare plc are technology
and innovation. These are the two drivers of the change in which firm is lacking behind.
Technology - External forces drives change for business of Mothercare plc for a change.
Technology up gradation is required as the other firms in retail industry have doing online
business and have advanced technologies (Lozano, Nummert and Ceulemans, 2016). Thus, this
is the major drivers to the change on Mothercare plc. Competitors are always lowering their
prices and costs. They are the major forces to make the company open its own website and to do
e-commerce business.
Innovation - One of the drivers of change is innovation. Mothercare plc is lacking behind in
terms of innovation. This is one of the crucial changes which firm needs to be adopted. They are
bound to adopt her methods and to introduce new products in the market. The idea also needs to
satisfy the costs of economy and must satisfy and fulfill the needs of the customers (Lines and
Reddy Vardireddy, 2017). By introducing a new range of baby products and by introducing
innovation in the product the company is able gain large market share. Through bringing a
culture of innovation this is possible. They need to create the teams which support innovation
and introduced a concept which tells that go beyond from just developing products.
In total 2500 jobs have been lost due to the closure of Mothercare stores. The company
is totally disappeared from the high streets. The main reason behind the closure of Mothercare
plc is there is increase in cost pressures and also consumer spending is changed. The company
comes in a contract on May 2018 which was a company voluntary arrangement. This agreement

leads towards closure of fifty stores in total and also snatch away 800 jobs. CVA is an
agreement under which the company settle its debts as there is high loan burden on them so it
agrees to pay proportionate of amount which it owes. It exchange the other party helps them to
solve their management and operational issues which are not working. One of the reasons for
the failure is that people are doing online shopping and this big giant gets failed to attract the
customer through online channel (Klynge, Svenning and Skov, 2020).
Mothercare plc is doing under investment of online business. Hence, this is a major
drawback for the firm failure. A company needs to take decision by understanding its nature of
organization that deliberate management functions accordingly. The company is also battling
with pressure of costs (Nacion, Park and Kim, 2018). These costs have been paid to acquire or
for maintaining the business franchises. The business of Mothercare plc has been facing from
huge losses.
Figure 1 Annual percentage change in annual earnings of 2016 to 2017

Changes are inevitable due to innovation and globalization
Globalization is always connected with innovation. It also put impact upon the
businesses which spreads across the world. Globalization is increasing competition day by day.
The firm which has similar technology gives tough though competition to the other firms which
deliver same type of product or have same industry. This aspire the company to come up with
innovative products (Kotir, Brown and Johnstone, 2017)
. Globalization also supports firm to do technological advancement in order to take a
lead with competitors. By upgrading technology it helps the companies to pass the major
hurdles of the business due to globalization. These barriers can be trade related costs of
transportation or lack of ethical standard.
The world economies become interdependent because of globalization. This is generally
inevitable. The linkage is increased due to development in production processes. This mainly
affects the companies who are operating their business in multiple countries. Hence, Mothercare
plc gets affected do to globalization and they did not pay attention to the driven changes in their
business mainly it is innovation and technology. They did not come up with something new in
the past years these results in major downfall for the company. On the other hand they did not
do any initiative to come up with online business (Lozano, Carpenter and Sammalisto, 2020).
Other retailers and supermarkets are doing online business and these are the major competitors
of Mothercare plc.
The company is unable to identify its threat and potential competitors. Thus, as a result
it gets failed in the end. Globalization also helps in technology transfer. As more and more
technology gets increased the demand for physical stores gets reduced. Customers prefer to do
online shopping. It is cheapest as well as easiest way to do shopping. Hence, if Mothercare
thinks to do online business they might be not failed and able to gain better position in the
market (Berry, Broadbent and Otley, 2016). The company should focus on research and
development department on earlier basis. Innovation and globalization both substantially bolster
the technology diffusion. The international competition has been increased because of
technological advancement. This is the world of artificial intelligence and use of automation
techniques in the stores. No one can just think to do business just through physical stores.
Today’s world is demanding for physical and online existence of the stores.

Drivers of change are impacting strategic decision making
Mothercare might change their organizational practices in order to not suffer from such
crisis. Sound managerial practices in an organization leads towards profitability(Unhelkar, Yang
and Shah, 2017). Company took an initiative and starting selling us product through mail order
and by its own website mothercare.com. Company doesn't invest as much which is needed, due
to underinvestment in technology its goes downfall. If company launch its own mobile app it
might worked. They repeatedly done traditional marketing but if they invest on e-marketing the
return on their investment gets exceed so far. Using traditional business practices is harmful for
the company. Strategic decision making of Mothercare is as follows –
 Change in organizational culture - Mothercare plc one of the strategies is to make a
change its organizational culture. This is required to introduce new technology in the
market (Drivers of Change, 2019). To implement the plan in the business.
Organizational culture plays an important role. Hence, there us amendment in leadership
styles. The company is focusing on using democratic leadership style in which
employees are free to communicate with their managers. The communion gap between
them gets removed. Employees are highly invited in decision making of the firm. If any
problem or issue with the employees. Company is able to resolve that issue easily.
 Strategies for R&D department - To introduced a innovative product in the market
research and development department of Mothercare plc plays an important role. By
doing market reach in dept firm is able to gain extractive knowledge based on which
they are able to deliver better products for the customers. Innovation is one of the major
drawbacks of the firm. Hence, by introducing a new product they are able to gain
competitive advantage. Innovation is only through doing market analysis. Regularly
updated with current trends in the market helps to satisfy customers of Mothercare. This
analysis helps to track the current demand of customers and their needs. To develop
analytical and creativity thinking among the employees is also one of the way to
innovate something new in existing product line.
 Technological strategy - Mothercare is using this strategy to do consistency
improvement in their technology. They are using various tactics do that they can
upgrade their technical department. Firm is increasing the chances to get succeed in their
plan through developing portfolio, which is alliance with the development in

technology, put emphasis on organizational learning and by changing their traditional
methods.
 Sustainable development - To do sustainable development is also one of the strategies
of firm. By reducing waste in production method the firm is able to recycle
management. The other campaigns are working for pollution control. The mission to
remove pollution from their factories and plants on total basis. Also they are providing
public guideline for doing waste management. They are promoting sustainable
development through their campaigns. Paper bags are coming in use instead of plastic
bags. By following ethics of business also helps them to retain number of customers
(Dedhia, Morisada and Strong, 2019).
 Use of margin analysis - This is type of effective decision making tool. It collects all
the resources, accounts and preferences at one place through which manager of
Mothercare can take better decisions. It helps to analysis a business in better terms by
providing a better return on investment. It balances the inputs and costs of the business.
The quality of input which is produced and is output needs to be analysis. The manager
is able to make more optimistic decision through collecting information by marginal
analysis.
Pestle analysis of Mothercare
 Political factors - Political stability in country's economy has a huge influence in
Mothercare plc. The importance of retail sector is at boom in the country. There is
military invasion risk in the country. Consumer service sector industry has high level of
corruption. Government if Great Britain should be concerned. Mothercare also provide
the online delivery of its products to the customers who are situated overseas. Thus, the
political situation of the countries like Spain, Portugal, Italy and Greece are not good in
Europe. These countries also help to contribute in the revenue of Mothercare plc. Hence,
these will highly influence the business of the company.
 Legal factors - The company has already been extended to Russia and china thus they
need to adopt very strict rules and regulations of developing countries. Not only are this
but legal rules also strict in UK in which this company has to follow laws of consumer
protection. Antitrust laws in retail industry also affect the firm profitability (Scanning

the Environment: PESTEL Analysis, 2016). Trade and tariff regulations also impact the
consumer service sector industry of Mothercare. Tax rate is also high in UK.
Figure 2 Pestle analysis (Source: Scanning the Environment: PESTEL Analysis, 2016)
 Economical factors - The level of unemployment is also high in the countries like
Europe. Mothercare plc generates high revenue from these countries whose
unemployment rate is low. Hence, if the unemployment rate get increased the
purchasing power of the customers get reduced and thereof demand of company's
products also gets reduced. On the other hand instability in economy also fascinating a
major factor for the downfall of Mothercare plc. But if the company migrate to other
economies where there is stability the company is able to generate high profit margin as
online medium is very good model for the selling.
 Social factors - the company had opportunity to socialize its networking and the world
is become trendier in terms of connectivity and socialization. Therefore, company has
also launched a new social networking sure which is named as gurgle. This site is also
giving huge responses and feedback from its members (Issues management, 2019). The
company has to get updated from the current trends and purchasing behavior of the
customers. By this they are able to make huge profits.

 Technological factors - Retailers generally use the technology named as Web 2.0. E-
commerce or online trading is at rise. Technology for business has been upgraded. Some
technological software for management such as Zoho One, ProofHub is great in use.
Hence, through this tools and software's of the management, Mothercare firm is able to
earn high profit margin. There is revolution of android technology. Retailer such as
Tesco also used this technology and created their own app. Company also need to focus
on developing their online application.
 Environmental factors - Different type of markets have various environmental standard
and laws that can impact the firm's profitability. Laws regarding recycle or waste
management is popular in United States. Mothercare plc also runs there business in US
so they also need to formulate strategies that can control environment safety measures.
They need to follow those management practices that are helpful to reduce the wastage
during production process (Oppenheim, 2017). Other than this they also need to take
necessary steps in terms of laws regarding environmental pollution.
Current responses of organization for numerous changes
Company needs to work as per the dynamic changes in the market. But as per the
current situation they are making products available on their online channel for encouraging
customers in order to do online shopping. The company as if now is providing attractive offers
of discount to its loyal customers in order to retain them god future (Dedhia, Morisada and
Strong, 2019). Not only this they also don’t taking any subscription amount on their online
channel. The main motive behind that is they want to increase their customer base through
online channel. They want to cut off their competition with other online retailer, to survive in
this competition these are some of their strategies which they are implementing. The current
features of Mothercare's website are as follows -
 Online business model - it is made as per the merchant model. The company doesn’t
want to charge anything from its customers. They want to keep their existing customers
gets updated with the new promotional offers (Schaltegger and Burritt, 2017).
 Customer search - the website provides various tabs as per the product category. This
helps customer to do shopping with ease. If they want to purchase any of the product of

the company they just need to enter in customer search and product will show on screen.
Hence, this saves the time of consumers from busy schedule.
 Graphical Interface - On the homepage of company's website. They published three
offers and display the products which are newly launched. This also shows price
discounts on specific product category and also notifies customers about upcoming
events. Effective slogans and pictures have been displayed by which customers can get
attracted. Graphical user interface is more easy way than typing.
 Online catalogue mechanism - Mothercare plc frequently offers various catalogues as
per the season. One of its examples is spring catalogue. The catalogue is further divide
into different sections namely, new arrivals, top offers and favorites. By this company is
able to increase customers towards their products (Zack, Alkhouli and Rihal, 2016).
 Online database - It is a type of management system that integrates online data
managing capability. This system is known as ODMS that's helps to upkeep the
catalogue of the products and also shows marketing images. It provides franchises of
POS library in order to fulfill the shop needs of display.
 Expert advice online - Mothercare plc provide a facility on their online website through
which pregnant women’s can asked about their queries regards to maternity and kids.
Experts give them best suitable advices. On the other side there is tab that named as
baby and me. In this section there is blog of various mothers that put their advices as
well. This provides a better guidance for the customers (Bertazzoni, Schreiber and
Nicolai, 2019)
 Secure Payment procedure - Mailbrain system has been chosen by the company to
offer secured payment options to the customers. It integrates e-commerce and traditional
channels through end to end solutions in software that facilitate to view the single
customer by distance selling procedure.
 Gurgle - Mothercare come up with a join venture with digital and social networking
marketing experts. Gurgle.com come into existence for creating the wealth from both the
world and also allows the parents for creating their online community. This brings the
customers together by networking chain and also allows them to set evolving world for
social networking. This is the great initiative of Mothercare plc.

Critical analyses of themes and theories
Contemporary management issues is the examination of thinking which is needed for
addressing issues as the changes in emerging edge. The mother care firm is faces different types
of issues at UK market place. Recently, company is closed due to challenges but still company
have their highest market share in the certain product but some of area like toys and clothing.
This creates various negative and positive impacts on the business and their sales. In respect of
that company requires to analysis such of the factors which affect to business again and creates
challenges for mother Care Company are as follows:
Globalization:
Globalization is the work used for managing and growing independence of world
economies, culture and populations. This is the connection of different part of world resulting in
expansion of international culture, economic and other political activities in effective manner.
There are various challenges with globalization that are understood with different viewpoints of
author. As per the view of Bretos and Marcuello (2017), organizational structure is the
significant challenge which is faced by globalization of business. Other countries have their
organizational structure for running the business. This creates biggest challenges for company
to manage their business. On the other side, Lerch (2017) stated that the legal and regulatory are
also different as per country and work requirement. In this mother care need to access the legal
expertise for help understand country laws.
Corporate social responsibility:
This is the continuous commitment by business for behave ethically and for contributing
in economic development while improving quality of workforce and local community. This
creates some challenges for mother care business those understand by research on work.
According to the Crane and Glozer (2016), increased customer interest may the challenge for
business with CSR policy. The ethical conducts company exerts growing influences purchasing
decision of customers. In the contradict manner Nave and Ferreira (2019) stated that the
growing demand for corporate disclosures from the stakeholder such as customers, suppliers,
communities, employees and activist organization.
Effective communication: