Tutor: Tong Chuan
Student: Yang Qi
Introduction
The JD Wetherspoon plc was founded by Tim Martin who opened the first JD Wetherspoon pub in the 1979. It based the model for a pub on a 1946 essay by George Orwell which referred to an imaginary pub called ‘Moon Under Water’. In the 1992, the JD Wetherspoon became a plc which time it consisted of a chain of 44 pubs and now it has over 600 pubs. In 2002, about 10 years after flotation, its share price rose to more than ten times its original value.
This report has 4 sections. Section A is going to give examples of external environment which have affected the way JD behaved. Moreover, using a SWOT analysis, explain the relationship between JD and the environment it is facing during the early years of the 21st century. Section B aims at explains the organization culture and organization behavior in an organization. Moreover, the report will explain the type of culture that the organization has using a recognized model of organizational culture. Section C mainly evaluates the business strategy that JD adopted and how to manage strategy within an organization. Section D deals with the times change which affect JD Wetherspoon directly and give some recommendations for these negative changes.
Discussion
Section A
a)Examples of SPETL analyze.
The social factor
Pub suit for the traditional culture
The UK social culture is traditional concept, so the JD Wetherspoon pubs don’t play music or show TV programs. secondly, the UK social culture is pursue the higher standard living, so that the JD Wetherspoon pubs not serving complimentary crisps with baguettes, were health conscious and almost always left the crisps, introducing a ‘hotness’ rating on the curry menu.
Entertainment element
At the beginning of 80s, younger generations of customers want to enjoy music or an evening out, therefore, Wetherspoon’s need to transform from tradition to entertainment in order to remain competitive.
The technological factor
Ventilation System
Each of the ventilation systems cost more than 100,000 pounds. It aims to ensure that customers do not leave smelling of smoke.
Security system
It now has more than ten of these hotels, all of which have bar facilities attached to them. This is technical factor. In order to attach customer, the pubs must use high technology and equip it. JD provide ventilation system in each pubs for customers to give a clear indoor environment.
The Economic factor
Economics crisis
As know that in the beginning of 21st century has a big economic crisis in the work, it cause the Economic environment of British is not prosperity. So more and more company redundancy the employees, it will be make a large number of people loss the job, moreover it cause the income is down and the people’s buy power is decrease.
Consumer behavior
Because in the supermarket, the wine and beer is cheaper in the pubs, some more and more people like buy some wine go back home rather than go to the pubs. So that the JD Wetherspoon have to expand business areas which it has begun developing budget hotel, the JD Wetherspoon pubs now serve breakfast and have a dedicated family dining area where children and adults can eat together. It will be immediately make more profit for self-help.
Political factor
Join the Euro
The UK government considers make the Pound join the Euro aim to Euro integration. It is a dispute for the British, because if the Pound joins the Euro, it causes the depreciation of sterling so that the commodity price will be increase. This point is very important for the JD Wetherspoon pubs, because it will be make the customer will pay more cash for the alcohol. So that the Martin is a noted euro-sceptic and in 2002 printed 500,000 beer mats and put up 10,000 ‘save the pound’ posters to encourage customer to think about the issue while they drink.
Unemployment factors
The Government applied monetarist policies to reduce inflation, and reduced public spending. Deflationary measures were implemented against the backdrop of the early 1980s recession, leading to 100.000 being added to the unemployment register every month, the early 1980s recession saw unemployment saw unemployment rise above three million, it directly led to pub industry economic losses.
Legal factor
Government policy
In this case, it show some legal for the pubs, for instance, the government concern about binge drinking and the consequent anti-social behavior, particularly in city centers, beer tax. It made the less of people go to the pubs. So the JD Wetherspoon pubs have to diversify operation, For example, it serve the breakfast and open earlier than licensing hours begin at 11.00 am.
Opportunity
J D Wetherspoon seized the opportunity of political stability and positive economy trend to expand smoothly. Besides, J D Wetherspoon owned its outlets, therefore it can easy to control its outlets based on wide span of control. Minimum human resources waste on management caused by J D Wetherspoon is a centralized structure.
Threat
As government issued the social policy, pubs cannot be seen to be encouraging binge drinking and the consequent anti-social behavior. J D Wethspoon suffered a resistance from social policy, the market shrunk due to competitor adopts different approach to share the market, and the company has to change the strategy as a result. The cost of changing will delay the development.
b)SWOT analysis
Strength1
JD Wetherspoon has a perfect communication in the company. As know that the JD Wetherspoon places great importance on listening to and acting on, it has two-way communication from members of staff on all aspects of the business about the feedback. Moreover, the JD Wetherspoon owned some fantastic facilities, for instance it has a ventilation system in each pubs.
Strength2
High degree of staff loyalty thanks to the company’s training policy. Staff is willing to work due to their advice or recommendation could be adopted by the board if it makes sense.
Weakness1
But JD Wetherspoon also has weakness. JD Wetherspoon follow the British traditional culture, so the JD Wetherspoon pubs don’t has any fashion facilities, for example they don’t have the TV and music, so they loss of customer. Chairman gave up day to day control in 2004 to become non executive chairman working two days week. This seriously influence JD’s marketing activity.
Weakness2
Government concerns about binge drinking which would result anti-social behavior.
Opportunity1
JD Wetherspoon reviewed it opportunity. In 2002, it acquires Lloyds pub chain consisting of 10 pubs. Since then, it has developed the Lloyds Number One Brand and greatly increased the number of outlets.
Opportunity2
The music based outlets with a much stronger entertainment element has been adopted in some J D Wetherspoon outlets. Younger generation would like to consume the pubs like this.
Threat1
But JD Wetherspoon also has threats. For example, the market now appears to be over supplied. It competes with supermarket. supermarket began selling drinks, particularly premium lager, at loss-leader prices.
Threat2
Supermarket began selling drinks, particularly premium lager, at loss-leader prices. Therefore, niche market and fierce competition has coming.
c)Guidelines for management use
Operations in communication S1-T1
The company has a perfect communication in the company. As know that the JD Wetherspoon places great importance on listening to and acting on, it has two-way communication from members of staff on all aspects of the business about the feedback. As a strong competitive factor they should extend services to drinking-off period to attract more customers.
Developing high degree of staff loyalty S2 to T2
High degree of staff loyalty avoids J D Wetherspoon lose the number of staff in high unemployment. It helps the company pull through the risk of unemployment.
Section B
a)Organization culture in JDW
The organizational culture is the basic assumptions, shared values and beliefs that guide the way organizational members behave toward each other and approach their work.
Shared values
The shared values are the norms of behavior which run around the organization. According to the case, the JD Wetherspoon shows the democratic leadership in the organization values. The company’s operation is ‘involvement and communication’. Staffs are kept in touch with weekly newsletters, a monthly company video and by publicizing the minutes of Board meetings. The norms and values of a culture are effectively the rules by which its members must abide.
Granted assumption
Taken for granted assumption are more informal and develop over time often in the form of low profile symbols such as physical symbols, stories and common language. In this case, Wetherspoon’s ‘listening’ policy is based on a system successfully pioneered by the hi-fi retailer, Richer Sounds. Julian Richer, owner of the company, acted as a consultant to JD Wetherspoon. The Martin eventually became a regional manager. The manager can use this way to reduce positive mood move into the job and improve the loyal for the JD Wetherspoon.
b)The type of culture in JDW
Organizational culture is a system that people can use to classify what a business’s personality and ethos is like. According to Charles Handy “The Gods of Management” 1985 there are 4 types of culture each based upon a Greek god.
Centralized
Zeus
Autocratic
Informal
| Power culture | Apollo Bureaucratic Formal Role culture |
| Dionysus Anarchic Individualistic culture | Athena Matrix Task-based culture |
(Figure1)
For JDW it represents for Zeus Culture which means power culture. As figure1 show the characteristics of the four types of culture JD Wetherspoon is typically Zeus culture. This type of culture looks to people with power but it may not always be formal power-holder. Also obtain demonstrate sponsorship. JDW was founded by Tim Martin and based his model for pub. And all the new pubs provide the atmosphere and facilities which Tim required. During the last two decades much of the success of JDW was attributed to the funder Tim Martin. So it was centralized but informal one which Tim Martin was the power man.
c)The relationship between organization culture and behavior
The organizational culture decides the organizational behavior. According to the case, the JD Wetherspoon’s culture is Zeus culture. Power and influence emanate from the centre is the key feature for this culture. Chairman regularly travelled round the country visiting pubs come out his business plan through this kind of travel. He is a noted euro-sceptic and add his political stand into the daily business, although Union leader and others condemned his action but he justified them by using the method poll among company staff which showed 90% were support his stand and 95% customers were happy for the pubs to be used in Martin’s NO campaign. Ideas and suggestions are discussed each week in company meeting and staff are rewarded for their suggestion, staff can also discuss company issues with board members.
d)Management approach to different organization culture
If JD Wetherspoon adopt other organization culture like Athena culture individuals are expects in their jobs and come together in project or task group. This would required the management approach to be more flexible based on different project as different department in the company should have a open communication. And systems and methods are transient as the group applies its energies and commitment to the task. So the different organization culture made the different organization behaviour.
| Time | 80s-90s | 21century |
| Culture changing | Power culture (Zeus) | Task culture (Athena) |
| Behavior changing | in JDW the management and staff are surround by one person and the work decide by one person | the work will have more communication between management and staff |
| Behavior changing | Tim Martin focus on oneself | Dedicated more on employee and give them more flexibity |
a)Possible strategies and indicate business environment
Overall Low-Cost Provider Strategy
Low-cost provider strategy means low overall costs, not just low manufacturing or production costs.
Price competition is vigorous
Product is standardized or readily available from many suppliers
There are few ways to achieve differentiation that have value to buyers
Most buyers use product in some ways
Buyers incur low switching costs
Buyers are large and have significant bargaining power
Environment conditions: make achievement of meaningful lower costs than rivals the theme of firm’s strategy; skill in designing products for efficient manufacturing.
Board Differentiation Strategy
Incorporate differentiating features that cause buyers to refer firm’s product or service over brands of rivals.
There are many ways to differentiate a product that ave value and please customers
Buyer needs and uses are diverse
Few rivals are following a similar differentiation approach
Technological change and product innovation are fast-paced
Environment conditions: Highly skilled and creative product development team; strong sales team with the ability to successfully communicate the perceived strengths of the product; Need to value and please customers when buyer needs and uses are diverse.
Focus Low Cost Strategy
The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation.
A narrow price of the total market
The appropriate environment includes where buyers have distinctive preferences, special requirements, or unique needs
Focused Differentiation Strategy
In differentiation focus a firm seeks a cost advantage in its target segment. It focus exploits the special need of buyers in certain segments
Best-Cost Provider Strategy
Deliver superior value by meeting or exceeding buyer expectations on product attributes and beating their price expectations. Be the low-cost provider of a product with good-to-excellent product attrivutes, then use cost advantage to underprice comparable brands.
Environment Conditions: Where buyer diversity makes product differentiation the norm. Where many buyers are also sensitive to price and value
b)What strategy JDW followed during 1980-1990s
During the 1980s and 1990s, J D Wetherspoon adopted the board differentiation. They provided the differentiated goods and services to meet the needs of customers in a wide market. For example, they sell a wide range of real ale beers at relatively low price; good quality wine is available; they do not play music or TV programmes; at least a quarter of the space in each establishment is non-smoking; each has a ventilation system which aims to ensure that customers do not leave smelling of smoke; particular attention is paid to the toilets, including the provision of specially adopted toilets for customers with disabilities.
There are four benefits of using this strategy on J D Wetherspoon plc:
1)The pubs expanded on average at the rate of about one new pub each week.
2)It opened over 90 new pubs and over 50% of the finance for the new developments came from cash generated by the business.
3)In 2002, about 10 years after flotation, its share price rose to more than ten times its original value.
4)The good services and goods attracting more and more customers.
c)Compare two strategies in terms of influence and on the behavior of the organization
During the 1980s and 1990s the company relied on organic growth by acquiring suitable sites and converting them into J D Wetherspoon plc, rather than buying the other pubs.
| 80s- 90s | 21th | |
| Strategy | Broad differentiation strategy | Focused Differentiation strategy |
| Behavior 1 | Hand one brand only, just J D Wetherspoon | In 2000, it acquired the Lloyds pub chain consisting of 10pubs |
| Behavior 2 | Pubs based on the same model. Do not including entertainment element. | A minority of J D Wetherspoon outlets did have TV screens for entertainment. E.g. Football tournament. |
d)What has consider before changing its strategy
External environment: by the start of the twenty first century, because of the retail licensing market had adapt to the changes in the “tied house” system and other competitor had been adapted it and developing their business. So J D Wetherspoon was facing much more competition. Many other competitors run the pub and receive the pay rent, this situation lead to saturation of the pub market. So J D Wetherspoon needs to change its business strategy.
Policy: during 2002-2004, government allows the supermarket began selling drinks, particularly premium larger, at loss-leader prices. This means that the pub can not compare with supermarket in price. On the other hand, government concern about binge drinking and the consequent ant special behaviors, particularly in city centers. This lead the decrease of new pub number and shares of case form. They must to change to save their company.
e)Illustrate the connection between business strategy and strategic choice.
Strategy is the direction and scope of an organization over the long-term which achieves advantage for the organization through its configuration of resource within a challenging environment to meet the needs of markets and fulfill stakeholder expectation.(Johnson and Scholes)
Organizations can choose to be the low-cost provider and differentiation strategy or specialization and so on. In the case, we can know that: at first, it supplies special environment quiet, clean, cheap beer to others. During the development of pubs, they all became to do special environment and provide different services and hardware like the ventilation. Then J D W began to serve breakfast, show World Cup football and so on, it also develop new brand like Lloyds, and begun developing budget hotel as “Wetherlodges” to change its strategy, all these process of strategy from differentiation to focus on difference strategy choosing is its strategic choice.
f)Key issues to manage its business strategy
The key point below offers a summary of the issues that the senior management of an organization must be aware:
Market/industry knowledge
Sufficiency of resources and capabilities
Offering consumers ’a unique value ’ perceived or real
Establishing a key ’differentiator’
Consistent communication consistently
Management must keep change feasible
Structure
Recognize the principal causes of strategic change
In my opinion the JD Weherspoon need to concern about the:
1) consistent communication consistently as the company operation is “involvement and communication” which build a two-way communication, this management method greatly help the company and employees with their exchanging ideas and suggestions.
2) Structure could also be an important issue because it always maintain the appropriate structure to suit the strategy being followed. 20%of the senior managers began as bar staff or cleaners. This kind of structure builds sense of loyalty in the organization.
3) Offering consumers ’a unique value’ perceived or real. For example, it provided at least a quarter of the space in each establishment is non-smoking; each has a ventilation system which aims to ensure that customers do not leave smelling of smoke; particular attention is paid to the toilets, including the provision of specially adopted toilets for customers with disabilities.
Section D
a)Why the strategy of JD Wetherspoon changed over time
In order to promote the right conditions for change, individuals have to identify the driving and restraining forces. For JDW the external environment continually changes. We had done the PESTEL analysis which may help the organization to define the situation and where the organization is. In the 21 century many factors in PESTEL have changed this force JDW to adopted their strategy into better use with the new environment.
1.Driving forces: The increase competition, many competitors run pubs to rent the money.
Government takes many police like concern about binge drinking, and thought it is anti-social behaviors.
2.Restraining forces: Inertia (habit) of the J D Wetherspoon, like their staff, they have habit to their ruler and management. They want the steady environment of work.
The original organization structure decide the relationship in company and how they behave in workplace.
b)One factor which may lead to change in JDW
The bad influence on J D Wetherspoon about profit and shares and sales. Tim Martin now as an executive, he had give up his power through daily time. So the business ethics is very important factors for J D Wetherspoon.
The ethics of human resource management covers those ethical issues arising around the employer and employee relationship, such as the rights and duties owed between employer and employee. With the increase concern of employee’s right, managers have to pay more attention to protect the workers in JDW.
c)The role that management play dealing with changes in 2000
The role of management of J D Wetherspoon are as follows:
Entrepreneur role: the manager initiates change and new projects, spot opportunities, identify area of business development. In the company Tim Martin who opened the first JD Wetherspoon pub in 1979, based on his model the pub was developed into a concatenate pub and become a plc in 1992 at which time it has over 600 pubs.
Resource allocator: decides who get who get resources, schedule, budget, set priorities. In the resource allocator role, the manager choose where the organization will direct its efforts. In the company it has a flexible training policy which enables people from all kinds of different backgrounds to join the company. Tim Martin required JDW needed to be fairly large. The company enter the market as a retailer after the CEO dicided.
Disseminator role: that transmit special information into the organization. Superior receives more information than subordinate form outside the organization. The JDW company had the policy that want more involvement and communication with employees. They keep in touch with weekly newsletters and monthly company video and by publicizing the minutes of board meetings.
Motivating and inspiring: nergizing people to overcome major political, bureaucratic and resource barriers to change by satisfying basic, but often unfulfilled, human needs. (wandererllc.com/2011) The leader should fide out the difference between J D Wetherspoon and others. It always needs to communication with people, know their needs and solve them, help them to adapt the changes in the company.
d)Advice give to the management of JDW help and analyze change situation overcome any resistance to change
The resistance of change can be summed up in two factors, organizational factor and human factor. But not every organization is flexible to suitable for the change. Lacking of well trained staff is one of the main factors which could limit company’s changing ability. For the management of JD Wetherspoon, there are several advices list as following.
| Advices and recommendations | problems | solutions |
| Brand building strategy | increasing market competition, more and more pubs are attend into this market to fight for the market share | develop brand loyalty to keep their strengths in the industry |
| Focus on differentiation strategy | Much competitors appears the strengths of JDW was no longer in its market. Tim Martin needs to change the corporation | pay more attention on the market niche. Using varies products to satisfy more potential customers. |
| Reduce expansion speed | Since the strategy was changed to focus differentiation, JD Whetherspoon lost the low price advantage. | So they should reduce the speed of their business expansion to avoid the fund shortage. |
| Internal customer | Martin may need to do more communication with staffs to listen to their advice and discuss with them and meet a measure to reduce the resistance. | It would benefit the organization for long-term developing. |
As a summary, the report firstly analyzed JD Wetherspoon both internal and external environment. Then its organizational culture and business strategy are discussed. At last the changes in strategy that JD Wetherspoon should take to meet the new requirements are demonstrated.
Through the PEST analysis, the external environment of JD Wetherspoon in 1980s is clearly identified. The strengths and weakness of JD Wetherspoon are found through SWOT analysis. After that, elements which could influence these strengths and weakness would bring to the JD Wetherspoon. Its organizational culture became from power to task during 1980s-1990s. JD Wetherspoon approached brand differentiation strategy. But to fit for the changes in 21st century, it changed business strategy into focus differentiation strategy.
Reference
Business Culture and Strategy(SQA)
http://logos.uoregon.edu/explore/socioling/social.html
http://www.answerbag.com/q_view/1996523
http://www.citehr.com/106391-ethics-human-resource-management.html
availablehttp://www.wandererllc.com/company/2011/07/managment-vs-leadership/
Copyright © 2019-2026 51dongshi.net 版权所有
违法及侵权请联系：TEL:177 7030 7066 E-MAIL:11247931@qq.com 本站由北京市万商天勤律师事务所王兴未律师提供法律服务
