Analysis of T2 Organisation Management - Case Study Example

MANAGEMENT ANALYSIS OF Т2 Name Tutor Course Institution City/State Date of submission Table of Contents Table of Contents 2 2 Background 3 Introduction 4 Importance of company to the Australian and international business landscape 5 Role of international business at the company 5 Research, analysis and discussion of sustainability related strategies and issues 6 Role of organizational behavior at the company 6 Human resource management practices at the company 7 Role of technology management at the company 9 Future strategies 11 Improving Human Resource Management Practices while investing overseas 11 Analysis of entrepreneurship and innovation at the company 13 Other Strategies 13 References 15 Background T2 is a top Australian tea retailer with over 60 retail shop spread across Australia, the United Kingdom, New Zealand, and the United States. The company offers Australia’s largest variety of premium, tea wares, and fragrant tea from different places across the world. A range of T2 products is also retailed in various top class cafes and restaurants throughout the country, while ready-packaged T2 products can also be purchased from the shelves of leading retail stores in different parts of the world. Within the last two decades, T2 has grown and developed and now retails approximately 9 million tea cups per month. According to the company’s website, T2 brands are packaged with a unique and ‘immersive’ experience, which celebrates centuries of tea-making (T2 tea website, http://www.t2tea.com/ ) . This paper will provide an analysis of the company’s organizational management strategies, through researching, analysing, and discussing issues of sustainability and associated strategies and issues. While doing this, the paper will evaluate the significance of organizational behavior, human resource management practices, involvement in international business, the significance of technology, and appraise innovation and entrepreneurship at the company. Finally, the paper will assess the future strategic management practices through engaging the three major strategies identified during the analysis of the company. Introduction T2 is a successful tea retail chain founded in 1996 by Maryanne Shearer in Melbourne. Australia is wrongly perceived as a nation whose population are more inclined to coffee than tea products. Over the years, the company has opened more than 40 stores in different regions across Australia. T2’s growth can be attributed to a number of factors including: excellent and branding consistency, store experiences, premium prices for premium products, and willingness to introduce a trend. However, the implementation of these strategies, to ensure organisational growth, requires effective organisational management. Throughout the 18 years that T2 has been in operation, one thing that stands out is the ability of the management to maintain an organizational culture that affects the behavior and management. These factors are instrumental in executing the company’s business strategies of expanding into the international market. Innovation and entrepreneurship are important in assisting the company to realise its objectives. However, these factors should be guided by streamlining the management decisions of the organisation. T2 is a new entrant into the global tea industry, after a successful retail chain business in Australia. Operating in the international market, although aided by Unilever, the biggest tea player in the global market, requires T2 to evolve its organisational management techniques and invent new operation strategies that will ensure effective competition with other established brands in the global market. As indicated in the background, the paper will evaluate various factors that have ensured success for T2 in Australia and explore the different methods that the company can adopt to ensure growth and competency in the global market. Importance of company to the Australian and international business landscape Role of international business at the company While analysing the significance of international business at T2, it is only important that the recent acquisition of the brand by Unilever be put into perspective. As at June 30, 2013, T2 realized sales of approximately $57 million in the financial year that ended in June of the same year. While recognising the potential of the brand, not only in Australia but also internationally, Unilever refreshment president, Kevin Havelock, noted that T2 was a rapidly growing premium tea brand that had a big potential. He added that Unilever was the most notable tea company in the world and would allow T2 to compete with other brands such as Lipton. Havelock argued that the acquisition of T2 would be significant in ensuring the exploitation of scale and accessibility to international markets for T2. T2’s entry into the international platform through the Unilever acquisition increases global competition into the tea industry. With worthy competitors such as Tetley, Lipton, Nerada, Twinings, Bushellls, and Dilmah, T2’s acquisition by Unilever will be important in improving the quality of tea products in the international market. International markets are significant in modern consumer products presence to companies operating on the international market. Given that, after the acquisition, most of the revenues for T2 will be generated outside Australia, T2, through Unilever, has established an international organisational framework that will ensure rapid expansion and ensure proactive involvement in the international market. T2 has notable and mature products and technologies, and with the recent acquisition, the company can access and exploit low-cost production within various regions, and satisfy the needs in these regions to ensure effective marketing and high sales. Through this framework, T2 will be able to ensure customisation of their products to achieve the specific requirements and develop a relationship with the consumers. T2, after the acquisition, now operates in Australia, the United Kingdom, New Zealand, and the United States. According to Daft (2009), inter-organizational connections offer safe interconnections that foster long-term investments, sharing of information, and reduce the amounts of risks involved. After T2 was acquired by Unilever in 2013, there are numerous opportunities that will ensure global presence of T2 products. Research, analysis and discussion of sustainability related strategies and issues Role of organizational behavior at the company Organisation behavior in the company guides the behavior of the management and the employees at T2. The company has a health and safety policy as one of the guideline to its ethical standards. The company indicates that it recognizes its legal and moral responsibility of ensuring safety and health of its workers, visitors, and clients. To ensure this, every store manager is responsible for the health and safe working environment for his/her team. The team members are also expected to ensure their safety through compliance to the safety directions and procedures. This is ascertained through completion of training and induction and proactive handling occupational hazards and incidences. According to House et al. (2004), the effectiveness of leaders is a function of the interaction between the leaders’ behaviours and attributes, competencies of the leadership, and strategic organisational emergencies. T2 leadership’s behaviours and attributes meet the requirements for the strategic organisational plans and will result in leadership efficiency. Importantly, because of the acquisition, it is safe to argue that Unilever will enforce its leadership organisational behaviour into leading the global business of T2. The model below shows the Unilever’s leadership growth profile. Figure 1 Growth profile of Unilever (Maarten & Mikhail, 2010) Human resource management practices at the company T2 has a strong organizational culture that guides its human resource management strategies. Since the company has been acquired by Unilever, and is adopting a multinational business model, there is need for an advanced human resource management practices at the company. Although the company has always maintained a decentralized organisational structure, with the recent acquisition, it is important that the company adopts a more leadership-oriented style of managing its human resource (Rondinelli & Black, 2000). Figure 2 Theoretical structure for the analysis of leadership competency in a multinational company Barney (1995) offered a resource-based perspective that postulates that multinational firms should establish competitive advantage through their resources, tangible and intangible, including the ones involved with human behaviour in the company. On the same note, Bartlett and Ghoshal (2002) provide important insights that appear to have been practiced by T2 after the acquisition. The authors provide that firms that operate in the international platform should respond to multiple global business environments but show unique sensitivity to cultural issues in the operations of subsidiaries factoring on strategy and predisposition. In line with Shenkar (2004), T2 has not focused on the congruence in cultural values between its operations in Melbourne and the foreign subsidiaries, now established in Europe and America, with the belief that high congruence has the potential of sparking competitive advantage before comprehending strategic configuration of a company operating in multiple nations (Shenkar, 2001). Figure 3 Human Resource Management Model (Varchetta, 2001) Role of technology management at the company Technology at T2 has an important role in the management of the company. The integration of technology is important to the management, both in product development and communication. Through the provisions of the company’s technology, T2 attempts to ensure customer loyalty through providing services and products that comply with the expectations and preferences of the customers, and appealing to the external and internal quality expectations, regulations, and food safety regulations in Australia. Since product quality has been the guideline for T2 and Unilever, the former has engaged in designing and establishing efficient technology infrastructure and effective control systems that ensure integration of all business operations in the company. As provided by Daft (2009), IT affects organisational design and its management in four different ways, devolved organisational framework, small organisations, advanced horizontal coordination, and advanced inter-organisational networks and improved network frameworks. T2 stores experience heavy traffic by providing a wide range of teas and other similar products, and tea flavours. T2 stores are relatively small, with their stocks shelved high on the stacks. The small footprint limits the space required for point-of-sale registers that mostly hinder the ability of the retailer to ensure quick services to customers. In 2011, with the projection of high sales during that year’s Christmas festivities, T2 opted to change the unreliable point-of-sale system that failed in most occasions during times of peak sales, and lead to loss of revenue. The POS system often failed to provide real-time inventory, customer information, and sales, which were important in the company’s growth in Australia and in the international market. As Michael Hobsbawn, T2’s head of technology, noted, the company often failed to identify, in perfect time, the number of stocks sold in each store and how much was left. Therefore, the company needed a stable, standardized POS system that would operate without much customisation, could easily be integrated with T2’s SAP Business One application, and offered EFTPOS operations, and advanced gift card competencies. This was to provide T2 with a real-time tracking of sales, equipping the stores with the abilities to replenish their stocks from the central distribution centre. The company also desired to ensure that customers were not subjected to long waits in stores. The company planned to achieve this through using tablet computers, and to provide new designs of gift cards and loyalty cards. By June 2011, T2 contracted Transacta to provide PCMS Vision BeanStore point-of-sale system to its stores. This POS is a Java-based computer application that operates through open source and proprietary OS, which makes it properly designed to work in a multi-store retail setup. Vision BeanStore provides accurate data of sales from all T2 stores to SAP Business One Suite in real-time. The merchandising team utilizes Vision BeanStore’s reporting systems to identify the particular stock that needs replenishing after the closure of a business day. Through advanced back-office data at the point-of-sale also makes T2 team able to understand customers’ requirements and create more opportunities towards customer satisfaction. T2 managed to complete the initial transactions on this platform by October 2011, before the festivities. The company had also managed to ensure that the tablet computers were integrated into the system to improve customer experiences in the stores. Future strategies Improving Human Resource Management Practices while investing overseas T2 should adopt various HR practices that will re-orient its business strategy and ensure that it attains the required competency at the international market (Fey, Bjorkman, & Pavlovskaya, 2000). First, the company should exploit Unilever’s global leadership in the tea industry to improve its management, marketing, and development and adoption of new technologies that will accord it the required competitive advantage. These are important in handling unpredictable situations sparked by economic crises (Brondoni, 2000). After the acquisition by Unilever, which also operates Lipton – a leading tea company, T2 now faces new competition and challenges in the new management strategies and approaches based on the methods of competency applied in the practices (de Vries, 2000). It is, therefore, necessary that T2 deals with the management system changes in a more holistic perspective. While operating under new environment and maintaining its leadership in Australia, T2 should adopt these factors: Clarity of objective: the company should regard the current situation in holistic manner, and lay out a strategy of its mission and how to attain this vision. Realistic innovation and creativity: the company’s management should ensure mental agility towards evolving creative business ideas and realistic achievements and ambitions Objectivity: the organisation’s leadership should possess objectivity and analytical ability to assess, accurately, the activities that T2 should undertake both in complicated and normal situations, in Australia and overseas (Grachev, 2004). Entrepreneurship and market orientation: the management of the company should ensure that marketing issues are taken into serious consideration. Both the internal and external factors affecting T2’s operations should be addressed with a market approach. In addition to this, the leadership should ensure an orientation on the improvement of business performance, both in short and long term purposes (Shama, 2000). This is associated to the initiatives that are often implemented and require perseverance in the operations of the company. The other factors that the company need to consider in its future strategy are market leadership, development of others, influence, integrity, team-leadership, and ensure that they learn from experience. Analysis of entrepreneurship and innovation at the company Other Strategies The Company’s logo has evolved to be one of the most notable brands in giant retail shops, commercial, and domestic establishment across the nation. The attractive logo broadcasts the company’s name on tea packages boldly. The basic, colourful, and bold branding provide customers with an immediate knowledge of the mission and operations of the company. The strategy here is that the T2’s logo ensures visual appeals: various flavours of tea products are shown in various coloured containers. Therefore, as customers browse to find their desired flavours, they are not exposed to unpleasant or undesired images on the company’s site. The company has been able to adapt the logo on all its products and has curved a niche for its name, which is immediately identified by customers and lures first users. The company should ensure that this strategy is maintained in the future and towards its expansion to the international market. Secondly, with the fast changing retail business, it is always advisable that customers are kept engaged in a store experience. T2 ensures this through allowing customers into their stores to sample various products before deciding on the desired ones for purchase. All T2 stores feature various stands and tables with flavoured tea products that are ready for sampling, accompanied with plates with tiny samples of loose-leaf products for sampling. The company has also established a ‘friendly’ atmosphere, which make customers want to visit. This is a strategy that has assisting the company in facilitating its customer loyalty strategy. The company should ensure that this strategy is maintained in the future and towards its expansion to the international market Third, it is common knowledge that tea is cheaper, compared to other beverage products in the world market. However, since T2 has invested labour and time to ensure quality of the products, the tea flavours are not sold cheaply at the stores. T2 has trained its customers into buying various tea products and flavours. Nonetheless, customers are also accustomed to the higher product prices at the stores, higher than other products in other retail outlets. This pricing strategy has enabled T2 to identify its target market and serve it to loyalty. This pricing strategy was adopted by Apple Inc., which ensured that consumers are able to purchase similar products from other places. Tea products from T2 competitors are available in supermarket shelves at considerably lower prices. However, through the branding quality of the T2 products, stocked in perfect way, and packaged properly, T2 has ensured customer loyalty and attracting new customers who are ready to pay more for the products. The company should adopt this strategy in the future and towards its expansion to the international market Finally, T2 has managed to start and maintain a trend in Australia, a tea-drinking trend that challenged the initially dominant coffee consumption trend in Australia. When Shearer established the store in 1996, tea drinking, especially premium tea, was unpopular. However, in establishing a store particularly focused on tea products, the proprietor started a trend. Currently, the company has diversified its products to selling other accessories such as cups and pots. Therefore, the company’s organizational management of its human resource and behaviour has been instrumental in ensuring that this trend is sustained. 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