Online Case Study: HRM and Competitive Strategy

You have been asked to advise the three companies outlined below – Panda Bear, Caribou and Grizzly Bear – on an appropriate approach to HRM. You have been asked to put together a brief management report on the approach that you would advocate for each company. In doing so, you should consider the business strategy adopted in each company, the objectives of an appropriate HR strategy, the employee behaviours and attitudes that should be encouraged or discouraged, the required skills and the necessary supporting human resource practices (for example, recruitment, promotion, pay and benefits, training and development, work organisation and job design).

Panda Bear Toys

Panda Bear is a family-run business which produces high-quality wooden toys such as train sets, abacuses and ‘developmental’ toys such as shape-sorters and puzzles. Panda Bear has recently celebrated its 50th birthday and continues to produce many of the toys that the founder produced when the business first began trading. The company seeks to produce toys that appeal not only to children but also to parents by evoking nostalgia for ‘simpler’ toys and ones they might remember from their childhood. Indeed, a central theme of Panda Bear’s marketing is to remind parents that they would have played with these toys as children and to emphasise their durability and quality. Panda Bear products are, however, at the more expensive end of the toy market and tend to be sold in up-market toy retailers and department stores, but are increasingly stocked in high-volume toy superstores as the market for such products grows. Despite recent sales growth and the need to produce higher volumes, management continues to stress the importance of maintaining consistent high quality through use of the best materials and an explicit focus on minimising defects, supported by high-quality customer service. Given its ‘nostalgic’ focus and production of ‘old-fashioned’ toys, Panda Bear does not focus greatly on developing new products but recognises the need to continually improve on its existing ranges.

Caribou Toys

Caribou Toys is a small but growing ‘workshop’ company producing high-quality, exclusive toys – principally, rocking horses, stuffed teddy animals and doll houses and accessories – often made to order by a limited number of customers. As many of the orders are bespoke, most of the products are unique or manufactured in small quantities. They are often either hand-made or hand-finished. Consumers order directly from the company and are typically either toy enthusiasts or collectors, or buying a present for a special event (for example, a christening). As part of its offering, Caribou offers a ‘consultancy’ and design service to meet the exact requirements of its customers. Specialisation ranges from teddy bears embroidered with special messages or markings to doll houses designed to the exact specification of a customer’s home or a cherished building. The high-quality, custom-made nature of the products, the length of the design and manufacture process and the high level of customer service provided, often mean that products are very expensive, often running into several thousand pounds. Whilst Caribou’s products appear traditional, senior management are constantly looking for new avenues in which to take their business and new products – particularly those that are not being offered in the wider market – whilst adhering to their central business model and philosophy. Similarly, although many of the techniques used to produce the toys are based on traditional craft skills, Caribou often invests in new production technology and the development of improved design and materials to meet the exacting standards of its customers.

Grizzly Bear Toys

Grizzly Bear Toys is a UK-based toy manufacturer producing a limited range of low-price toys, for example die-cast toy cars and cheap plastic toys such as hula-hoops, yo-yos and dolls. In order to compete with low-cost suppliers from overseas and having so far resisted the pressure to move production abroad, Grizzly Bear needs to sell its products as cheaply as possible and to maximise both production and sales volumes. Marketing its toys explicitly as ‘pocket money’ toys, Grizzly Bear seeks to get its products into as many specialist toy retailers and supermarkets as possible and to exploit the ‘pester power’ of young children. In order to maintain supply contracts, however, Grizzly Bear must meet basic standards in respect of safety, quality and (limited) durability. Grizzly Bear’s primary business imperative in a highly competitive market is to keep costs as low as possible, and product design is kept as simple as possible to minimise production costs. Given its relative success in winning and maintaining supply contracts with a number of large retailers, Grizzly Bear expends very little effort on developing new or improving existing products, rather seeking to lower production costs further and to refresh its lines by altering minor details which do not require further investment.