Managing Strategic Change At The HMV Group
HMV Group announced a three year strategic and operational review in March 2007. The primary purpose of this dissertation is to analyse the methods used to manage this strategic change and to discuss alternatives. The secondary focus is to assess the decision to change. At a time of change, much focus is placed upon developing strategy and not enough on the implementation and management side. It is possible that a ‘perfect strategy’ for a situation is wasted by poor implementation. A specific strategy can be developed over night, however; successful strategy implementation is a much longer process. In order to analyse HMV Group’s change management efforts, it is crucial to understand the company in detail. The prescription for change depends on the diagnosis. The type of change required depends on the nature of the business in its particular context. HMV Group plc consists of HMV; the UK’s largest high street entertainment specialist, and Waterstone’s; the UK’s largest high street bookseller (BMI, 2007). The recent increase in sales of digital products and online digital media shows a paradigm shift in the consumer use of media. HMV Group has admitted that it has not responded quickly enough to the market structure change. In March 2007, HMV group announced a three year agenda to transform HMV and Waterstone’s led by group CEO Simon Fox (HMV Group, 2008). Proposed ChangesOver three years (2006/2007 – 2009/2010) HMV plan to: 1. Protect and revitalise the core business – A new HMV store layout offering internet access, digital delivery media purchase, pay-per-play gaming centres and 3 network concessions increasing footfall. Waterstone’s will do more to grow its share of the children’s book market and launch an innovative loyalty scheme for customers. 2. Grow revenue from new channels – Invest online; in its website and in a new social networking site aimed at uniting people with the same interests in music/film. 3. Drive cost efficiency – Restructure cost base, streamline the supply chains using cross-dock consolidation locations, and exploit group synergies by centralising procurement and make full use of buying power. Also, some of Waterstone’s property portfolio it gained from the takeover of Ottakar’s is to be sold. HMV target: to obtain 25% of the online entertainment market by 2010. Waterstone’s target: to obtain15% of the online book market by 2010. Group target: to be market leader in all of its international territories (HMV Group, 2008). Strategic change is not easy and will not happen over night. Research aims
1. Review the current literature on the management of strategic change in order to establish a firm research basis. 2. Through the use of primary research, obtain detailed, up to date information about how HMV Group is managing its current strategic and operational review. 3. Critically analyse the forces affecting change in the HMV Group and assess the decision to change. 4. Analyse how HMV Group has chosen to manage its strategic and operational review. 5. Draw conclusions and discuss alternative methods of managing strategic change. 2. Literature ReviewThemesThroughout extensive research on the subject of strategic change and its management, some themes and terms have emerged through the fog of metaphorical language. The phrase ‘change management’ itself is a double entendre; it could be understood as the management of a change situation or a change in management personnel. Decision making features often in the literature due to its very nature. To make a decision is to make a change from the original sequence of events. Management decision making and strategic change management are therefore interrelated. The purpose of this section is to identify common trends in literature and what prominent writers have to offer the subject. From an overview of available literature, some relevant...
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