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More Evidence of Retrenchment as Cost Cutting Bites
Regular readers of the Business Studies blog will have noted the many examples of retrenchment which have arisen in recent years. Students who'd like an introduction to the concept of retrenchment might also find this revision presentation handy.
It pays to look out for examples of retrenchment in the business news because the stories themselves usually provide examples of wider strategic issues being faced by the firms involved. Take these three recent examples I picked up from the news in the last 7 days...
Kodak has been going through a painful process of retrenchment after it was declared bankrupt. The company will cut another 1,000 jobs by the end of 2012 having already reduced its workforce by about 2,700 worldwide since the beginning of this year.
Kodak, which is in the process of auctioning about 1,000 patents, needs to raise nearly $700m (£440m) to repay its creditors and exit bankruptcy. The firm said it expects to save about $330m from the new job cuts.
Another household name looking to achieve significant cost reductions is Philips Electronics. The firm has said it will axe 2,200 more jobs as it battles the tough economic climate and attempts to save 1.1bn euros (£877m) in annual costs. The announcement was made by Philips' CEO Frans van Houten who has announced a strategy of improved efficiency and reduced complexity in the business. Van Houten also wants to change the culture at Philips to make it more entrepreneurial.
In his first year as boss, Van houten responded to tougher competition and a slowdown in demand by cutting thousands of jobs, replacing his entire executive team and making the company’s unprofitable television operation a joint venture.
http://www.bbc.co.uk/news/business-19554444
And one final example of retrenchment to help make the point that many substantial businesses are continuing to look closely at the scale and scope of their operations in response to the continued economic downturn.
RBS insurance arm Direct Line Group announced last week proposals to axe nearly 900 roles and close a site in the North East of England. The group, which owns the Churchill, Green Flag brands and employs some 15,000 staff in the UK, is planning the redundancies as part of plans to make £100 million of cost-savings by the end of 2014.
Strategy: Kazou Hirai and the Forgone Bonuses [1 May 2013]
BUSS4 - Want Good Analysis? Think How & Why? [29 Apr 2013]
Strategy: Kazou Hirai’s First Year as CEO of Sony [22 Apr 2013]
Strategic Change & Culture - Kodak and the Winds of Change [11 Feb 2013]
RBS discovers the cost of a “selfish and self-serving” organisational culture [7 Feb 2013]
Retrenchment Strategy - Are Things Looking Better for Nokia and Stephen Elop [10 Jan 2013]
Ansoff and Tesco - What Went Wrong with Fresh and Easy? [6 Dec 2012]
More Retrenchment as Panasonic Tries to Stem the Losses [15 Nov 2012]
ResearchBuster: Retrenchment [26 Sep 2012]
Retrenchment - Lexmark Exits the Inkjet Printer Market [29 Aug 2012]
Retrenchment in the Public Sector [18 Jun 2012]
Sony - Can Hirai Turn the Business Around? [16 Jun 2012]
Retrenchment in Greece - Carrefour sells out for one euro [16 Jun 2012]
More Retrenchment at Nokia (June 2012) [14 Jun 2012]
Nokia and Strategic Change - the Essential A2 Business Case [14 Jun 2012]
It’s all going wrong for Nokia - big losses in Q1 (2012) [20 Apr 2012]
Sony - Hirai’s Turnaround Strategy - in Video Clips [13 Apr 2012]
Revision Presentation - Retrenchment [4 Apr 2012]
The Downsides of Downsizing - Does Retrenchment Work? [4 Apr 2012]
Retrenchment: Short-Term Pain for Long-Term Gain? [19 Mar 2012]
Two Lesson Videos on Nokia - Will their Strategy Work? [13 Mar 2012]
The story of a failed takeover - Fred Goodwin, RBS & ABN-Amro [6 Feb 2012]
Leadership - Tough decisions to turn Starbucks around [29 Jan 2012]
Technological change - Kodak’s big strategic mistake [28 Jan 2012]
What’s gone wrong for Kodak? [19 Jan 2012]
Tesco takes it ‘easy’, controlling costs in its US operations [11 Jan 2012]
Revision Presentation - Cost Minimisation [3 Jan 2012]
Thomas Cook begins down the long road of retrenchment [14 Dec 2011]
Thomas Cook opts for a different generic strategy for success [11 Dec 2011]
Retrenchment not enough as the lights go out for Luminar [6 Nov 2011]
Revision Quiz - Costs, Revenues and Profits [12 Oct 2011]
Ansoff and the Boston Matrix can’t help Kodak [6 Oct 2011]
The puzzle of rising profits [5 Sep 2011]
Tesco and Retrenchment [31 Aug 2011]
The costs of redundancy [5 Jul 2011]
Retrenchment for Thorntons following strategic review [28 Jun 2011]
Mothercare’s change of strategic focus - Updated [13 Jun 2011]
Retrenchment in action - Comet turns off the retail lights [12 May 2011]
HMV to become a more ‘compact’ disc retailer [6 Apr 2011]
Cutting costs - with a lick of paint? [15 Feb 2011]
The end of the line for JJB? [13 Feb 2011]
Rising industrial unrest in China [29 Jun 2010]
25 Ways to Get The Startup Right [22 Apr 2010]
Recession Survival Strategies Cost UK SMEs £16bn [31 Mar 2010]
BUSS4 Research - a Corus of Disapproval [1 Mar 2010]
Strategy in a recession - stakeholders & cutting labour costs [1 Mar 2010]
Recession strategy - what happens when a market dives by 30%+? [28 Feb 2010]
Retrenchment at the BBC [26 Feb 2010]
Strategy in a recession - cost optimisation not cost minimisation [25 Feb 2010]
Strategy in a recession - Don’t Panic Mr Mainwaring! [25 Feb 2010]
Strategy in the UK Recession - What 69 UK CEOs Did About It [22 Feb 2010]
Strategies for the Recession - Insights from Six Restaurant Group CEOs [19 Feb 2010]
Managing a recruitment business through the recession [16 Feb 2010]
Strategic reaction to the UK recession - notes and observations [9 Feb 2010]
AQA BUSS4 Section B Practice Question - Royal Bank of Scotland [7 Feb 2010]
Revision Presentation - Improving Profit [30 Jan 2010]
Teaching strategy - Starbucks revisited [24 Jan 2010]
Retrenchment and capacity cutting at Blacks Leisure - and then expansion again? [12 Jan 2010]
Revision Quiz - Financial Strategies [8 Jan 2010]
How to be a top UK HR Director [1 Oct 2009]
Beat the Teacher - Introduction to Costs [14 Sep 2009]
Absenteeism - the effect of the fear factor? [20 Jul 2009]
Flexible unemployment [19 Jun 2009]
Small businesses in the middle of the crunch - insights for students [22 Apr 2009]
Staff retention in a recession? Give them more holidays (and a pay cut too!) [20 Apr 2009]
Segmentation strategy - Halfords abandons premium retail brand [16 Apr 2009]
Cutting operating costs - its like pruning a rose bush [3 Feb 2009]
Playboy bunnies feeling the financial squeeze [26 Sep 2008]
Cutting costs for a railway by switching the engines off [10 Sep 2008]
Wanna job? Get down to McDonalds [18 Aug 2008]
More evidence of rising raw materials costs affecting profit margins [25 Mar 2008]
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