Pacific Brands
The two main problems identified in the Pacific Brands case are: brand value and decision making. Furthermore, these seem closely interrelated. Pacific Brands had many external factors that forced it to make tough decisions during the recent global economic recession. Those challenges were only made worse by the degree to which Globalization has (generally) elevated the level of competition in many industries, effectively forcing companies to reduce expenses by any means available to remain competitive. The move that Pacific Brands felt the need to implement was not much different from the reactions that many of its competitors had already undertaken. In that respect, Pacific Brands was merely trying to follow the globalisation trend. However, in the decision making process, Pacific Brands never analysed the brand value that consumers perceived as a result of the products being produced domestically, particularly in its failure to anticipate the public response at that time (Schermerhorn, Davidson, Poole, Simon, Woods & Chau, 2012 p 56).
If the firm had recognized domestic production as a value-added price component, it could have retained that value through an effective targeted marketing campaign designed to mitigate any negative publicity. Unfortunately, the company could not have picked a worse, time to offshore its production. Pacific Brands had already received public funding and should certainly have anticipated the public's perception of terminating domestic jobs to reduce costs after benefitting from public funds beforehand. Naturally, as a consequence of not carefully considering this perspective, the offshoring efforts were met by negative publicity, public resentment, and an overall devaluation of the brand's value (Schermerhorn, Davidson, Poole, et al., 2012 p 56). The loss in value that the brand suffered will likely exceed the savings in labor that the company will gain. That loss could have been prevented or at least substantially mitigated through a more comprehensive analysis of stakeholder perspectives and a corresponding publicity campaign designed for that purpose.
Reference
Schermerhorn J.R., Davidson P., Poole D., Simon A., Woods P. And Chau S.L. (2012). Management:Foundations and Applications (1st Asia-Pacific Edition) Wiley: New York.
Tanya McKelvie Student No: s2876674 CASA3
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