BUSS 4: (4.7) Managing Change

THE boss of Argos described a takeover bid from Sainsbury’s as “opportunistic” this weekend, and said his attempt to turn around the high street catalogue retailer was “not finished by a long shot”. John Walden, chief executive of Home Retail Group, told The Sunday Times that “we didn’t pursue this strategy thinking we needed partners”. He said: “We do believe, as we build the transformation of Argos, we are building for a business that anticipates a digital future, and that’s unfolding as we expected.” However, he left the door ajar to a deal with Britain’s second-biggest supermarket, saying: “If there’s a way for us to realise this in a faster way with a partner or multiple partners, that’s certainly something we and the board would consider.”

Will the takeover work? Does the transaction fit with – the capabilities of the firm? – the corporate objectives of the firm? – The culture of the firms? E.g. a takeover involving diversification has a good strategic fit for an objective of spreading risk by investing in a variety of products and markets

Possible integration challenges… Management roles & responsibilities Customer confusion & reaction Financial & IT systems Different cultures Marks & Spencer Poundland

You are merging Surbiton High and Guildford High What issues do you need to consider?

Retrenchment Halting recruitment or offering early retirement/ voluntary redundancy The cutting back of an organisation’s scale of operations Delayering / restructure Closing a factory, outlet or division of the business Making targeted cutbacks & redundancies ‘Sticking to the Knitting’ – sticking to what you do best

Halting recruitment or offering early retirement/ voluntary redundancy Delayering / restructure Closing a factory, outlet or division of the business Making targeted cutbacks & redundancies Look at the examples of retrenchment provided Think about the following: Which strategy below they have used to cut back on the scale of operations What were the motives? What are the issues with doing this? (Think FMOP)

To what extent is it inevitable that a strategy of retrenchment will end in failure? Arguments in supportCounter- arguments  The need for retrenchment suggests some fundamental competitive weaknesses in a business that will be difficult to resolve  Retrenchment is a normal part of strategic decision making – many businesses decide to refocus their activities and often succeed  Retrenchment is often the right strategy during an economic downturn and once implemented can leave a business in a much stronger competitive position