The company did not respond to the changing management needs and continued to pay heavy packages to its workers and coupled with low response to fashion changes, it has lost its customers confidence.
JZ Benny did not respond to the competitive edge that the new entrants like Spanish El Dorado and Scandinavian Helgar were employing. It remained static in the fashion outsourcing even when its competitors changed to fast fashion model shops. While the competitors outsourced their fashions from Eastern Europe, JZ Benny instead rushed to China and South East Asia which sold at low cost. Thinking this as a cost advantage over the rivals, it turned out to be a stock burden for the company since they had to buy in bulk and hence were left with indispensable stock at the end of the season. This was a miscalculated marketing strategy resulting from inefficient market analysis. The company failed to keep up with its competitors who resulted to e-supply chain which enabled them to connect the customers with the designers hence placed in the market what the customer preferred. This ensured that they were always ahead of other retailers since they stocked what the customers liked.
JZ Benny saw a management gap and responded by fishing Bob D'Saster from competitor Helgar Fashions. As the CEO of JZ Benny, D'Saster was confident that cost cutting measures and investment in technology would turn the chain around to start making profit. Cost cut measures were implemented leading to layoff of about 20% of the staff and heavy investment in RFID (Radio Frequency Identification) tags to help in improving the Barcode Inventory Processing. However this did not help the company and the AGM dismissed D'Saster and placed John Hammond as the CEO.
As expressed by Courtney et al., 1997, the case of JZ Benny is a management problem. The company has been under a management that does not recognized that the company is in a dynamic industry which is highly competitive. Fashion industry has seen a lot of revolution and even the giants in Paris and Milan have not been spared. With the rise of USA and ASIA and fashion centres of the world, the company needs to wake up to the changes taking place in the market. As part of the strategic management, the company should first embrace the e-commerce models to have more links between designers and customers. It should also look into expansion strategy to widen its operation base. This model should be in line with the following analysis of the business and its operation environment. The company should not be disposed to tycoon McQueen since it can use this proposed model to turn round its fortunes. (Michael and Jude, 1997)
The company operates in an enabling political environment. The fusion of the political and business environment is suitable for its operation. The business commission has already barred McQueen from acquiring the company as per its rules. With the formation of the European Union the company should