Advanced Organizational Behaviour Report: Espirit Holdings Analysis

This report provides a comprehensive analysis of Espirit Holdings, a global manufacturer and retailer of clothing and accessories. The report begins with an overview of Espirit's organizational background, including its mission, vision, and value proposition. It then delves into the company's strategic directions, organizational structure, and culture. A significant portion of the report is dedicated to external analysis, utilizing Porter's Five Forces and PESTLE analysis to assess the competitive landscape and external factors impacting the business. Internal analysis focuses on core competencies, capabilities, and human resource strategies, including a SWOT analysis. The report also examines Espirit's change management strategy, particularly the implementation of Lewin's Change Management Model, and concludes with recommendations for improvement. The analysis covers the period before and after the 2014 organizational changes. The report is based on the assignment brief from Robert Kennedy College University of Cumbria for the Organizational Behaviour module.

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

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ADVANCED ORGANIZATIONAL BEHAVIOUR
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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ADVANCED ORGANIZATIONAL BEHAVIOUR

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ADVANCED ORGANIZATIONAL BEHAVIOUR
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

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by ingenuity as well as well integrated organizational culture which is the fundamental strength
of their workforce helping them to deliver every organizational goal.
Along with a market leader they have the vision of being responsible towards their business
environment, the stakeholders as well as the nature. That is why they use eco friendly packaging,
responsible marketing as well as sensitive recruitment strategies. this is the success strategy of
the organization that help them to become a popular Global brand in the year 2007. Their
organizational excellence is based upon achieving high performance as well as excellent
outcome for their B2B and B2C customers. DRIVING INNOVATION IS ANOTHER
SUSTAINABLE GOAL OF THE ORGANIZATION WHICH renders significant value towards
their customers.
Value proposition of Espirit
The urge of becoming a premium organization and the Global brand is the primary value that
help them to retain the pioneering position in their time. Their primary aim is to capture the
leading market position as well as occupy market Fame in the respective industrial fields where
their businesses are concentrated. Nevertheless their main goal is to ensure sustainable profit and
after the the joining of the new so, continuous traffic instrument is one of the basic objectives of
the organization along with increasing brand presence in most of the potential retail markets.
Strategic directions of Espirit
The basic focus of the company is developing and innovative line of manufacturing by means of
which they can reduce operating costs to ensure their sustainable presence in the growing
markets. The strategy which they follow is that of competitive marketing.

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They have a clear relationship with customers and the value proposition helps them to develop a
clearly dedicated set of customer group. The last value proposition of the organization is
increment of their brand popularity and brand equity.
Exceptional branding strategy
The organization took significant measures in order to overhaul their operations Kamal
distribution as well as landing by means of a high cost transformation plan. The shifted their
focus from the fragile market of Western Europe to the intensely competitive Chinese market.
They are now depending on a vertically integrated business model and the emphasis is on the
reestablishment of a value for money image for reversal of their fortunes.
Corporate Structure of Espirit Holdings
Espirit Holdings have strong organizational culture and a consolidated corporate
structure. The global listing shows that their market capitalization strength is equivalent to HK
$3.9 billion. AS an outcome, the organization is not able to attract the attention of too many
institutional investors. The institutional investors hold a market share equivalent to 54% in
Espirit holdings. The executive management team of the organization is answerable to a board of
directors. Significant shares of business are also held by the insiders. The value is approximately
around 11%. The organization is primarily concerned with retail as well as wholesale
distribution of lifestyle products which have been designed by the self developed brand of
Espirit. The company endorses more than 12 product lines. The company manages more than
1200 self owned stores outlets around the world. The regional business heads of the organization
have with them more than 1100 autonomous business divisions as wholesale point of sales. The
company has their operations spread across 25 countries. However, the two main business

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subdivisions of the brand are spread across Hong Kong, catering to the entire base of Asian
customers and Germany, Ratingen catering to the entire western market including the sales as
well as operations in USA also.
Organizational culture at Espirit
Espirit Holdings is a global organization which requires a strong organizational culture. The
company needs to ensure that all the departments and the three subsidiary units like clothing,
hardware, accessories and home care are held together and work towards a common goal. The
organizational culture of Espirit Holdings is referred to as ownership culture. This model of
organizational culture emphasizes that all business units are given equal importance in a way so
that there are respective business targets for all departments and Espirit do not depend heavily on
the sales of any individual business unit (Shams, Sharif and Kermanshah 2017). The primary
factors of organizational culture of Espirit is global management of all sub-holdings, , valuing
people and their inputs as well as orientation with all range of human resources. However, in this
context, Gattnar et al. (2015), informs that since 2014, Espirit had transformed in to a well
coordinated business and organizational culture. The communication channel of the organization
was divrged and flow of information was channeled to a particular line. The business objectives
are clear to the stakeholders other than those in the bottom line. However, after the
organizational changes were introduced in 2014, it can be expected that Espirit will be able to
display a more integrated business performance. The positive impacts of this organizational
change has already been cited in the positive growth of the business performances of FY 2015-
16, 2016-17 and even in 2018.
External analysis

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Porter's five forces analysis
Threat of new entrants
It is very difficult to achieve economies of scale in manufacturing and retail sector where the
organization operates. As an outcome, companies like Espirit that have a large and diversified
market gets the cost benefit advantage. This is why they have larger hold on the producers and
suppliers also. However, their market force is weak.
It is also known that product differentiation is strength of the company and Espirit also follows
the strategy of selling differentiated products rather than standardizing their sales on a unique
product line. There is a strong value of advertising as well as marketing activities of Espirit
which make the threat of new entrants weaker. Large product diversification requires high capital
requirements. This is another reason why new companies would not be able to compete with
Espirit. The company also invests heavily on market survey. Nevertheless because of highly
diversified product line, the access to distribution network for each product category is easy for
the new entrants. They can enter into any individual product category by setting up distribution
channel. From this perspective it can be argued that Espirit can lose business in individual
product categories as an outcome of this market loophole (Mandalaki and O’Sullivan 2016).
In summing up this section it can be highlighted that the biggest weapon for Espirit for tackling
the new entrants is their cost advantage. The product differentiation is another factor that will
help in keeping the new market forces away and thereby develop brand identification of Espirit
in every product category.
Bargaining power of suppliers

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In the first place, it requires mention that the number of suppliers in the industry where Espirit
operate is much more in comparison to the number of buyers. This implies that the price control
of the suppliers is weaker and thereby the bargaining power of the supplier groups is also a weak
force. Nevertheless, Espirit global brand procuring from various supply chains around the world.
Hence it is necessary for the company to rely on the most reliable and reputed supplier lines.
Hence, their supply line is less differentiated and Espirit have moderate switching cost. However,
the switching cost from the end of the suppliers is high because they are in transaction with a
global brand that accepts bulk supplies. Considering these factors, Aslam et al. (2018), argues
that the chances of forward integration of the suppliers is not a credible threat. However, in the
end it can be summarized that the strength of suppliers are critical to the success of Espirit,
considering the kind of industry where they operate. Hence, it can be concluded that the profits
of the company are closely related to the quality of products of the suppliers. Hence, it can be
argued that reasonable pricing from the end of suppliers is critical to maintenance of the profit
margin by Espirit. Considering all these factors it can be stated at last that the bargaining power
of suppliers is a moderate force operating on the company.
Bargaining power of buyers
Espirit operates in largely diversified markets where product categories are much more in
number compared to the number of companies selling them. As an outcome, it is not possible for
customers to remain aware of every individual brand selling the respective products. For
evidence, if a family visits a local market, they will prefer buying products from Espirit Holdings
outlets, which incorporates multiple product categories under the same roof. This is where the
Global brand name and standardized product quality of Espirit comes into play. Emphasizing on
the above scenario it can be highlighted that product differentiation rate is high in the industry

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and buyers will not be able to find alternative company producing any particular product. Hence,
although the switching cost will not be high for the buyers, the procedure will be complicated for
them. Lastly it can be summarised that the bargaining power of buyers is indeed a weak force for
Espirit (Gattnar et al. 2015).
Threat of substitutes
There are a very several substitute products which are available and not associated with the
brand name of Espirit in the industries where they operate. The substitute products are mainly
cost effective alternative of some of the product categories of Espirit which are produced by rival
brands. However, it can be expected that a premium brand like Espirit will have a classified
customer base. Regarding this view, it can be argued that the substitute products developed by
the rivals have the power to diversify the target market of Espirit. Moreover, Deakin and Reid
(2019), argues that it is less likely for the customers to switch to substitute products and
emphasizing on the above argument it can be commented that threat of substitutes is a
moderately high force for Espirit. In order to tackle the substitute products, Espirit can only
emphasize on providing greater quality products without alternating the price line.
Rivalry among existing companies
There are very few strong competitors of Espirit. There are alternative brands operating in the
individual product categories. However, very few organizations like Espirit have a big and
diversified product base. This makes market rivalry a strong force within the industry. However,
in the respective product categories Espirit face competition from their Rivals as well as major
brands with whom they collaborate. The top competitors of Espirit include AllSaints Ltd, Cato
Coporation, Tommy Hilfiger in the west and Guess??, Bob’s Stores and so on in the Hong Kong

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centered market (Duus, H.J., 2016). Analyzing the market strength of the competing
organizations, it can be highlighted that these companies have large market shares in their
respective product categories and they are always in a position to become market leaders. This
makes market rivalry, an apparently strong force in the industry. However, in argument it can be
stated that Espirit also have large market share in various product categories and the strong
market diversification and product differentiation always help them in maintaining significant
market share in all product domains (Ramírez and Selsky 2016). The fixed costs in the industry
are high which emphasizes the companies within the industry to push with full capacity.
However, one negative aspect related to this is that companies including Espirit have to reduce
their price when there is a slackened demand. The strong competition makes it difficult for them
to do so.
Espirit will have to acquire larger market shares from big Rival brands. Other than the industrial
growth, Espirit will also emphasize on new customers rather than expanding their market share
in the already established industries.
Pestle analysis
Political factors
Espirit is a global company and political decisions in various target markets affect their business.
However, as a German company their strong Emphasis is on playing around the business and
political decisions in the European target market. Hence, the current political decisions from the
end of German government as well as the European Union in driving the momentum in favour of
brands’ conglomerates like Espirit which have the potential of becoming the leading
departmental chain in many target markets (Eckert, Frølund and Riedel 2018). The European

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Union countries which deliver the largest market share to Espirit have the propensity of shopping
products from physical as well as online retail stores. However, with time Espirit needs to
strengthen their online retail profiling so that they are able to accommodate the large base of
online customers in the future (Rogers, Pirner and Pawar 2018). Espirit has set the strategy of
launching deeper in respective product categories emphasizing strongly on the respective market
needs. In the first place, it can be highlighted that in the European market they are shifting
towards high street fashion in clothing and accessories like sunglasses, perfumes and so on.
However, product diversification has been done by them keeping in mind the demographic,
ethnographic as well as the various income factors in respective countries. this is why the price
ranges of Asian product lines are much leaner compared to their western counterparts.
Economic factors
The recent economic position of the organization has developed because of the inheritance of the
new CEO Anders Christian, who had been associated with the apparel brand New look. Espirit
has set a standard policy of generating higher profits and cutting costs. Since the year 2012
Espirit has been able to maintain balance in their net income which has been varying within the
range of 3700 million Hong Kong Dollars to 2500 million Hong Kong Dollars. Compared to the
revenue in 2014, in the year 2018 Espirit was able to generate lesser profits, however their
market conditions have been much more stabilized. Analyzing the financial growth of Espirit it
can be highlighted there two strong economic factors. The first factor is the new product lines in
the various markets. The other factor is reduction of cost. Reduction of operating cost is a
significant achievement that has been able to do this by shifting to high street fashion. This was
however a controversial business decisions and the CEO has proven the sustainability of this
decision (Orr and Jadhav 2018).

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Again, considering the economic factors it can be also be highlighted that since Espirit operates
in a highly diversified industry. Hence, share traders should invest small amounts with Espirit,
now since they now have a standardized business volume.
Social factors
Social factors incorporate the impact created by Espirit on the society and people. In this context,
two important factors which also contribute to the brand loyalty of Espirit should be mentioned
here. The first factor is the lesser price that attracts foreign customers who have fascination for
European brands (Lasserre 2017). There are other social projects run by the organization, like
reducing operating cost in Europe by outsourcing production to Africa and Bangladesh.
Technological factors
Espirit operates across different sectors. They have the potential to compete with large number of
contestants. The extensive research and development is one of the biggest opportunities for
generating synergy. However, regarding the technological factors it can be stated that Espirit
should be aware of the other market designs and their level of popularity which can be a threat
for the company. The recent acquisition strategy of Espirit is adaptive and incorporates small
subsidiary brands which have autonomy over production and sales in respective local markets.
7 S Frameworks
Strategy
They have used a strategy of sales diversification in new markets with new product lines. In an
attempt for retrieval of their lost business reputation in the Asian market, it can be highlighted
that the company has recently invested more than $2.4 billion which could help them in gaining

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back the market reputation by the dint of competitively better quality of products and equally
competitive pricing strategy. The company is not looking forward to the engagement of new
strategies for the previously existing customer base. On the contrary, the organization is looking
forward to getting hold of new customer bases in the developing markets of Asia as well as the
Asia-Pacific region. Leaving the value proposition as popular premium and global brand, the
organization is looking forward to the acquisition of crucial new markets like China as a reputed
clothing brand.
Structure
The business structure has been decentralized. This is happening because of the sovereign debt
crisis in Europe as an account of which they are having to rely on the operations at Asia for the
three fourth of their revenue volumes. In this context, it can also be argued that the company has
allowed certain level of market autonomy by means of which they have been able to gain little
more control of the market in Asia. The fact that their central leadership has been weak in the
country shows that their mobility and market appreciation is flawed. Nevertheless, after the
ascension of the new CEO, the structure of market decentralization and flexible leadership has
come in to being. The organization is still emphasizing on product diversification as they think
that price fall is not a solution to sustainable business. In order to generate a higher level of brand
awareness, the organization has enabled a strategy of non-interference in to the intrinsic business
affairs of the local area networks that has been set up by the organization.
Skills
Development of new high street fashion ranges is their solution for attracting the middle and
middle-lower ranged customer categories. In regard to this strategy, it can be emphasized that

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they are occupying new customer bases and that is why they need to develop new foundations
for new product styles at Espirit. The company has established a new leadership pattern by
exercising of business expansion, restructuring of business as well as setting up production plants
in the new areas.
Style
Multiple business headquarters with focus on two different markets. This is an unique market
value proposition of the company by means of which they would be able to make much more
detailed market analysis and thereby cater to the unique demands of the two different business
segments.
Staff
Autonomous working of local business heads is a typical nature of the staff line of the company.
They have the facility of more than 900 leading retail outlets that are directly managed. Each of
such stores appoints more than 45 workers. Again, on an autonomous basis, the organization
several brands each of which appoints more than 150 members over their bottom lines.
Shared Values
The company is dedicated towards sustainable production and that is recycling as well as
re-use of products has been adopted by them as two of the most important environmentally
sustainable business strategies.
Internal industrial analysis
SWOT analysis of Espirit
Strengths

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The strong brand portfolio is one of the biggest strengths of Espirit. As highlighted in the vision
and corporate strategy and value proposition of Espirit, it can be highlighted that they are
constantly investing for development of strong brand portfolio. This becomes a major strength of
the organization when they want to diverse their business into new product categories and across
new customer segments. A major Strength of the organization is high level of customer
satisfaction where they can develop dedicated customer relationship by means of effective CRM
strategies. The actions like feedback collection and warranty over products and free services
attract the customers and develop goodwill and brand equity among the potential customer bases.
Espirit also enjoy the advantage of hassle free transactions with help of local business heads
which helps organization to expand into new markets (Cui and Liu 2018). The supplier strategy,
of Espirit, as indicated above, is to adopt the premium of the suppliers with standardized
products. This is why the raw materials used by Espirit are always of the best quality and the
strong business equation of the organization with their suppliers help them to overcome any
supply chain bottleneck.
Weaknesses
Firstly the strength of there inventory is much higher compared to their competitors which is
why they should raise more capital for investing over this channel. This can have a long term
impact on the capital growth of Espirit. Espirit should also develop more professional market
forecasting team. Lack in understanding product demand has increased the rate of missed
opportunities. This is the reason why there inventory clearance rate is not as good as some of
their Rivals and they are forced to keep high inventory both in house as well as in channel (Cui
and Liu 2018). The loss of market share in the niche categories in the financial year 2012 and

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2018 is also another weakness of Espirit. The organization needs to develop internal feedback
mechanism directly from their sales team so that they are able to counter such challenges.
In spite of a diverse economic strategy they need to invest for better financial planning. This is
suggested by their recent asset ratio and liquid asset ratio. The amount of disposable cash they
have at hand does not represent the cost to profit generation rate of the organization. This means
that they are making more investment for generation of lesser profit. analysing the factors
responsible for slow growth of Espirit Jacobs, Pan and Askool (2016), has identified that
marketing of products is a category where they are lacking. The lack of expertise in integrating
with companies with different purchasing patterns has been exposed. Although Espirit have tried
in the past to integrate with small companies, their share of failure in merging with similar
companies because of incompetence in tackling different work culture is very high.
Opportunities
As indicated above, the online drive of various countries of Europe is a golden opportunity for
procurement of new product lines by Espirit. The online companies get a benefit of compensated
value from the B2B servers in terms of sales activities and resources. This is a large business
opportunity for Espirit. (Jacobs, Pan and Askool 2016). The stable flow of free cash is another
big opportunity for the organization and enables them to generate revenue streams and also
diversify into newer product categories.
The loyal base of customers and the increase in customer potential is an economic uptick for
Espirit. In this context it can be argued that after several years of operation as well as slow
market development rate now there is a big opportunity for Espirit to capture new target
customer base and thereby enhance their market share. New customers are also offered by the

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offline sales channels which have been developed by the organization in the last few years in
new markets of Asia and Africa. By leveraging this opportunity they have largely used
production cost
Threats
One of the biggest threats faced by Espirit is the rising price of raw materials which can
considerably reduce their profitability. The competitors are coming up with new technologies. In
fact there are other reasons which are causing market disruption and this can be serious threat in
the long-term future of the industry (Aslametal. 2018). Although the suppliers’ strength of
Espirit is wonderfully controlled, the Global distributors are rising in strength which is a threat in
some of the markets as the computers are paying higher margin to the local distributors.
Balanced Scorecard Strategy of Espirit Holdings
Objectives Goals Indicators Initiatives
Financial
Perspectives
Reduce cost of
new product
lines (high street
fashion)
To extend the
average
attributable profit
shareholders to
HK $3000
The stability in
revenue growth
in the last three
financial years
Goods sold per
year are
increasing and
new business
strategies for
customer value
proposition are
increasing which
might help the
customers to

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ADVANCED ORGANIZATIONAL BEHAVIOUR
associate them
with the product
strategy of the
company.
Customer
Perspectives
To emphasize on
new customer
bases and retain
most of the
middle and upper
middle base of
customers
Attract new
customers in
popular Asian
markets like
China as well as
other markets
like Australia.
The primary
indicator is
investment of
HK $2.6 million
for market
expansion, in
Asia, recently.
The initiatives
regarding
customer
perspectives are
generation of
stronger brand
awareness and
brand
development on
the basis of a
new acquisition
strategy where
the local brands
and local
entrepreneurs are
included in the
business line.
Internal
Processes
Developing a
more capable
Appointment of
local franchised
The essential
business
The initiatives
include joining

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ADVANCED ORGANIZATIONAL BEHAVIOUR
line of
management
owners as
regional business
heads.
indicators
include
autonomous
control of the
Asia business
unit and
accumulation of
three fourth
revenue of
Espirit from the
Asian business in
the last 3
financial years.
of Vincent
Jenniard as the
head of Global
Markets of
Espirit. He
targeted the
group of younger
customers who
are young,
enthusiastic and
eager to explore
new brands.
Learning and
Growth
Perspective
Considering the
learning and
growth phase, it
can be
highlighted that
it is necessary to
conduct
mainstream
marketing
activities in the
Traditional
marketing
campaigns like
television
advertisements,
discount
campaigns in the
beginning phase
of business and
other such
The indicator is
the recent
investment of
financial
resources
The initiatives
include efforts to
establish new
customer bases.

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ADVANCED ORGANIZATIONAL BEHAVIOUR
Asian and the
Australian
market.
activities have to
be conducted.
Change management strategy of Espirit
The Change management strategy of Espirit that was implemented by the organization to bring
about a change in organizational culture will be evaluated by means of the Lewin's Change
management model. This model comprises of three main stages which are unfreeze, change as
well as refreeze. Unfreezing is the first stage in the process where the organization should be
prepared for the change and also emphasizes that the change is crucial as well as needed. This
phase is very essential because there are various stakeholders trying to resist the change and it is
important to dissolve this status quo. This is followed by the change stage where the real
transition takes place. The factors associated with this change our new happenings, good
leadership as well as reassurance which is necessary for steering forward in the right direction.
The last stage is refreezing. after acceptance, embracing and implementation of the change by
people the company starts to become stable again.
The organizational change is mainly related to the culture that needed a revision because the
culture of internal bravery had almost destroyed the organization from inside. In the first stage of
unfreezing, as highlighted by The Change management model the investigation operations of
Espirit carried out in 2013. These investigations discovered Espirit losing out because of lack in
premium nature of brand endorssement. Espirit was accused of of a systemic practice of issuing
conventional sales strategies with no new brand awareness strategy. The market growth that
happened from 2014-2018 can be largely attributed to the involvement of senior management

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ADVANCED ORGANIZATIONAL BEHAVIOUR
with new marketing stratagies. In the first place the management tries to enhance the value
proposition by price reduction and generation of brand awareness.
Recommendations and Conclusion
The strategic analysis of the organization has exposed lack of proper management and firm and
streamlined control of the bottom line over the respective business units and allies of Espirit
across the world. This is why it is recommended that they have to continue their strategy of
internal review semi annually over the next 3 years. The sensitive areas of business should be
represented by the business heads of Espirit, directly.
After the end of 3 years of operations the organization should again conduct a third party review
of their operations.

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