Managing change

Use Lewin’s force field model to analyse why VBM is making major changes now.

Read the information below and then answer the questions that follow.

Soundcheck plc

Soundcheck plc offers a streaming service enabling users in more than 160 countries to play a variety of content, such as music and podcasts, on electronic devices. The company initially offered its services free to consumers and earned revenue from advertisers. An additional, paid service was introduced in 2022. Paying subscribers benefit from better quality audio, no adverts, and playlists made by celebrities. Exclusive podcast content also provides paying subscribers with an enhanced experience which justifies a paid subscription model.

Since its launch in 2006, Soundcheck plc has grown to become the market leader. It now employs nearly 4000 staff globally. A stock market flotation has funded huge investment in building a high-quality technology platform, strong brand and a skilled workforce. However, Soundcheck plc has not regularly made an operating profit. Its costs have been rising significantly in recent years and in 2023 it lost £26 million as a global economic slowdown began.

In 2023, Soundcheck plc reached an agreement with trade unions about pay rates and ways of working. The agreement guaranteed starting salaries of at least £36 000 to many staff. This is significantly higher than the industry average. However, there is a global shortage of skilled software engineers and marketing staff so labour turnover rates remain high. In addition to competition for staff, new competitors are attracted to the growing market, including large rivals who are well established in other streaming markets. Other new entrants have also targeted the ‘free’ sector of the market. Some of these rivals have a competitive advantage because they own the rights to music or other content and so have lower costs than Soundcheck plc.

When introducing its paid service, Soundcheck plc changed its positioning strategy from position 1 to position 4 on Bowman’s strategic clock.

Analyse why Soundcheck plc decided to change its positioning strategy.

Soundcheck plc has set a corporate objective to achieve an annual profit in 2024.

Analyse the difficulties Soundcheck plc may experience when attempting to turn its 2023 loss into a profit in 2024.

Soundcheck plc’s management has had good relationships with trade unions and its staff have been supportive of strategic change.

To what extent does consultation with trade unions enable all businesses to overcome resistance to strategic change?

A business starts to use ‘kaizen’.

This should lead to

Read the information below and then answer the questions that follow.

Simply Bake plc

Palm oil is a cheap oil ingredient used in the manufacture of many everyday items. Production of palm oil often involves farmers clearing rainforests. The destruction of this habitat has led to the loss of many animal species, including half of the world’s orangutans.

Powerful campaign groups with many members, such as Greenpeace and the World Wildlife Foundation, have highlighted the issue. As a result, consumers are increasingly aware of the environmental impact of using palm oil.

Simply Bake plc is a supplier of cakes to supermarkets, who then retail them as their ‘own brand’ products. For many years, palm oil has been an important ingredient in Simply Bake plc’s products, allowing it to meet the demand for cheap food.

In 2018, a small campaign group, Action against Palm Oil (APO), criticised Simply Bake plc. APO had carried out a survey using a sample of 100 of its 400 members to represent the views of UK consumers. The survey found that 67% of respondents wanted the government to ban the use of palm oil.

High-profile media campaigns have increasingly drawn attention to the issue of palm oil production. By 2019, supermarkets had noticed increasing numbers of enquiries from their customers about palm oil and environmental damage.

Finding alternative ingredients is difficult and expensive, but in 2020 Simply Bake plc announced that it will have changed all its recipes to remove palm oil by 2025.

Explain why APO’s survey findings may not represent the views of UK consumers.

Explain how stakeholder mapping would help Simply Bake plc decide how it responds to criticism from APO.

Simply Bake plc decided to remove palm oil from its products.

With reference to Lewin’s force field analysis, analyse why this decision was made.

‘Businesses will never act in a socially responsible way unless they are forced to do so by governments.’

To what extent is this true for all businesses?

Businesses using flexible employment contracts can be criticised for being unethical.

To what extent should businesses avoid the use of flexible employment contracts?