Executive Summary
Cooley is a well-known and long-established large producer of Irish whiskey. However, with the recent emergence of new competitors, who bring with them impressive competitive advantages, Cooley has found itself to have lost its position as a world-renowned organization. Urgent rebranding is needed to develop a new competitive advantage, make the company more efficient, and, thus, regain is foothold within the industry.
It is suggested that the use of the MBO tool as the primary exit strategy and the following rearrangement of the firm’s priorities will help Cooley re-establish itself as a globally renowned brand. Furthermore, it will be recommended that a strong emphasis should be placed on quality improvement processes, as well as the search for a brand image that would help develop a competitive advantage (Joseph, 2016). Finally, the focus on innovativeness and resourcefulness as the key assets of the organization are suggested as the ultimate means of bringing Cooley back into the target market.
Once the identified qualities are in place and used to develop a sustainable approach to costs, management, and marketing, a significant improvement can be expected. Cooley must strive towards unceasing quality improvement and hold this as its corporate philosophy.
Cooley Distillery Individual Case
Cooley Distillery has been operating in the alcoholic beverage (AB) industry for a number of years, gaining impressive recognition. The focus on using traditional recipes and natural ingredients allowed for developing a particularly strong competitive advantage, which, in turn, served as the basis for establishing a strong presence in the Irish market. However, as new companies started appearing and offering innovative products of higher quality, the company started to lose its appeal to its target customers. To reverse this new negative situation, the company should consider an MBO option with the following redesign of the firm’s branding strategy and the introduction of a new model of risk management so that Cooley’s financial assets can be used efficiently.
Cooley: Strengths and Weaknesses
Much to its credit, Cooley has a range of advantages that could be harnessed to make the firm more competitive. In particular, one can highlight the fact that the firm has been known for its ability to take risks in the past and adopt innovative approaches to solving various problems. Furthermore, it can be seen that Cooley has been striving to use its available resources in as rational and efficient a manner as possible. As such, it is reasonable to assume that the company’s approach toward resource management is based on sustainable use and cost-efficiency.
Strengths:
- Resourcefulness
- Willingness to take risks
- Innovativeness.
Weaknesses:
- Poor cost management strategy
- Poor risk management strategy
- Lack of strategic thinking.
As the list provided above shows, it is crucial to make sure that the leaders of Cooley Distillery start to focus on introducing the principles of strategic thinking as the foundation for the decision-making processes at the managerial level. Furthermore, a more viable risk management strategy should be introduced into the company’s system. It is on this solid foundation that improvements in the current situation can be built.
A closer look at the external factors that affect Cooley’s performance in the target market will reveal that the company, in fact, still has potential, yet it will need to develop a very strong competitive advantage in order to measure up to the other firms that have been delivering consistently good quality products. As Porter’s Five Forces Analysis carried out below displays, the high purchasing power of buyers means that while Cooley cannot afford to set its prices too high, it also needs to reconsider its current approach toward marketing and HRM. A change in the management approach is required.
Table 1. Cooley: Porter’s Five Forces Analysis
Irish Whiskey Category Structure
A closer look at the Irish whiskey category structure shows the number of serious competitors is growing; a strong presence in the target market and a large portfolio are typically listed among the primary strengths of these key rivals. As the table below indicates, Cooley Distillery needs to consider managing the production and marketing-related processes in a more efficient manner in order to achieve any tangible changes.
Table 2. Cooley: Key Competitors
Based on the category structure provided above, it would be prudent for Cooley Distillery to promote consistent quality improvement as the foundation for its management processes, and emphasis must be placed on the introduction of a new quality management framework that could contribute to a rapid improvement of the selling and distribution of the product. It is strongly recommended that the Six Sigma approach be considered as the best strategy available to follow since it allows for a consistent increase in quality levels (Evans, 2016). Specifically, one should regard the adoption of the DMAIC (Define, Measure, Assess, Improve, Control) model as the basis of any new quality management approach. By using the identified tool, Cooley’s managers will be able to control the quality levels more easily and, thus, more successfully. Furthermore, the basis for consistent improvement of product quality can be built upon once the DMAIC framework is introduced into the company’s’ design (Pyzdek & Keller, 2014).
Financial Opportunities
The fact that the shareholders have little control over the situation can be viewed as another reason for concern. It is strongly recommended that the financial processes conducted in the company should be more tightly supervised. Therefore, it is recommended that the MBO strategy should be used as an exit tool. As a result, opportunities for debt financing can be created. The maturing debts that Cooley Distillery is facing currently will be addressed in a fast and efficient manner, and the financial risks associated with the specified liabilities can be avoided.
One might argue that transitioning from being a part of the company’s management team to the ownership of the firm could create certain problems. Indeed, it is crucial to make sure that managers should be able to develop the relevant leadership skills that will help them lead the organization successfully. This can be addressed directly by reconsidering the existing system of values and corporate philosophy with the following change in the leadership framework, and the introduction of training sessions. Thus, managers will be able to acquire the skills that will help them guide Cooley Distillery to rise again within the AB industry.
Recommended Strategies
As the analysis carried out above has shown, Cooley Distillery has been experiencing a crisis since it has stopped using its strengths to its advantage. In order to make sure that the firm remains competitive in a market where new companies appear to offer innovative products, Cooley will have to redesign its quality management system so that it can be more improvement-oriented (Nanda, 2016). For this purpose, the DMAIC tool, as the means of updating product quality on a regular basis, is recommended.
Furthermore, Cooley Distillery will also need to reconsider its current attitude toward shareholders. The target audience will have to be provided with more opportunities and benefits; only then financial stability will become possible (Chen, 2014).
The principles of strategic management, as well as the elements of transformational and laissez-faire leadership styles, will have to be incorporated into the firm’s new design. The former will serve as the tool for forecasting and avoiding risk, whereas the latter will engender responsibility among staff members, encouraging them to make strategically sound company-related decisions. The transformational leadership style, in its turn, will be necessary to enable the implementation of these changes throughout the company (Nongard, 2014).
References
Chen, J. (2014). Regulating the takeover of Chinese listed companies: Divergence from the West. New York, NY: Springer.
Evans, J. R. (2016). Quality and performance excellence. Boston, MA: Cengage Learning.
Joseph, J. (2016). Financial structures of Swiss SMEs in the manufacturing industry: A mixed research approach. Berlin: GRIN Verlag.
Nanda, V. (2016). Quality management system handbook for product development companies. Chicago, IL: CRC Press.
Nongard, R. (2014). Transformational leadership how to lead from your strengths and maximize your impact. New York, NY: Lulu.com.
Pyzdek, T., & Keller, P. (2014). The Six Sigma Handbook (4th ed.). New York, NY: McGraw-Hill Education.