Case Marty's Shoes

Topics: Change management, Managing director, Cost-of-production theory of value Pages: 23 (7625 words) Published: March 26, 2012
Case Study: Marty’s Shoes
The idea of this assignment is to learn how to write a business change plan on the basis of a case study. This plan will appeal greatly to your knowledge of advisory skills and skills for the management of change. Solving the case contains specific Extended Enterprise elements. This puts the content of the course in the context of this semester.

Case description:
Marty’s Shoes Ltd.
Marty‟s Shoes was founded as a factory in 1948 by Mr. L. van Leer, the father of the present managing director, Mr. S. van Leer (61). His company now has 175 employees. The managing director of Marty‟s Shoes is locally and regionally well-known as Sijmen van Leer, who plays an important part in public life next to his position as managing director.

With respect to the situation in the shoemaking industry, Sijmen van Leer uttered some quite positive remarks in a recent interview with a regional newspaper.
Some weeks later Mr. Van Leer received the preliminary annual financial statements of his company. Bearing in mind the upcoming presentation of the annual figures, his accountant wrote an accompanying letter, concluding that profitability has sharply decreased over the last couple of years. This is caused by a greater increase in expenditure than in turnover.

The quality of Marty‟s Shoes products is high. Traditionally shoes are to a great extent manufactured manually by professionals who have worked for the company for many years. Marty‟s shoes experiences stiff competition from China and Romania, countries that used to produce inexpensive bulk products, but that are increasingly shifting to high quality footwear. These competitors are able to produce at lower cost: their wage-levels are lower and, contrary to Marty‟s Shoes, they use the most recent techniques.

Apart from 2008, Marty‟s Shoes has not made any investments over the past five years. There is hardly any increase in production. By now some 30 % of the turnover is exported to foreign countries. Sales are conducted in a pattern that has been similar for many years. The number of retail traders is decreasing. The trend is towards bigger retail chains, with more buying power and the rise of internet retailers. The figures do show, however, that Marty‟s Shoes solvency is quite good, due to continued pay-off of debts. Yet, the question is to what extent

failure to invest influences the results, the accountant concludes.
Mr. Van Leer meets with the general management staff of the company every two weeks. Next to the managing director they are:
-Peter Nagel (48), head of the administrative department, originally employed in the accounting department. Nagel has been working for Marty‟s Shoes Ltd. for many years and is responsible for all administrative affairs, although he and his department have relatively little personal contact with production and sales.

-Wim van Tongeren (53), head of HRM (Human Resource Management). In his younger years he started at Marty‟s Shoes as a production worker, left the company for a couple of years to study psychology, and on his return worked in the HRM department, of which he has been the head for the past two years.

-Elsbeth IJser (40), production manager. She has also worked for Marty‟s Shoes for many years. She is also responsible for the design department, with a couple of budding designers. She consults with the head of purchasing and sales on a weekly basis and is worried about the declining number of orders. She knows that the cost of production is too high when compared with competitors, but is hesitant to move production to low-wage countries in view of the possibility of loss of quality and labour force consequences.

-Felix Voeten (29), head purchasing and sales. Voeten joined the company only three years ago. He...
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