Case Study – Harrybaker Group

Background
Harrybaker Group’s mission is to establish world-class companies in the spheres of Consumer Goods and Digital
Services – a business consortium with interests in financial services, manufacturing, management training &
consultancy, and technology development and marketing. Its vision is to be a company aligned with its values. Its
values are: Trust, Respect, Commitment, Courage and Humility.

Harrybaker employs 121,700 staff across all divisions. They have recently outsourced most of their delivery functions
to national transport contractors and to local delivery companies.

Last year Harrybaker made a profit of $500m which pleased the directors as they had invested heavily in the business.

Harrybaker’s head office is in Europe, and this is where all the members of the Corporate Board are located.
Manufacturing plants and distribution centres are located in Europe and the United States and will soon be
developed in the Far East.

Award Winners
Recently Harrybaker Marmalade arm won the special “Orange d’Or” award at an international marmalade festival in
France and the publicity this created has led to a significant rise in orders and enquiries. Everyone at Harrybaker has
been very excited about the award and the directors of Harrybaker have decided that they can harness the staff
enthusiasm to set another target with a deadline in 6 months’ time: to get Harrybaker listed on the “100 Best Food
Websites” which is a very popular national television (TV) programme. Achieving this could double the demand for
Harrybaker Marmalade within months, (specifically Harrybaker would aim to double sales within 2 months following
the TV programme)

Strategic Objectives
Harrybaker Group operates in a highly dynamic industry with the development of new services, emergence of new
competitors, and opportunities in emerging markets. At the same time, the regulatory regime is changing.
Harrybaker Group has recently expanded its operations via a series of mergers and acquisitions.

The strategic objectives of this expansion were to:

▪ Secure cost savings from economies of scale in business operations
▪ Realize savings from more efficient operations by standardizing systems and processes
▪ Increase turnover through cross-selling services to new and existing customers
▪ Gain access to new markets for existing, and planned, products and services.

As a result, A team of internal Business Analysts and external consultants have been engaged to carry out business
audit. Specific issues identified include:
• Harrybaker has not made full use of the potential for on-line sales – competitors have grown such sales to
more than 25% of total business, whereas Harrybaker’s on-line sales remain below 10% due in part to the
increased marketing activities of its competitors.
• In one of the divisions, 10% of customers have not re-ordered in this financial year and staff morale is poor. A
number of skilled staff have left as a result and replacement staff have not been recruited due to the
reduced operation
• Staff, including those who deal with customers face-to-face, have insufficient knowledge about the
company’s products and how they compare with those of their competitors.
• Recent market research has indicated that among potential customers the company’s brand image is weaker
than those of its competitors

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 • Overhead costs have grown at the same time as sales turnover has fallen so profit margins and overall
profitability have declined
• Each directorate has focused on its own objectives rather than on their contribution to corporate-level
strategic objectives

Key priorities for the business are to grow sales income (both in-store and on-line), whilst at the same time bringing
costs under control to protect and enhance profit margins. Additionally, cross organizational working to achieve
corporate goals needs to improve. These objectives are relatively stable and unlikely to change in the near to
medium term.

Grants & Constraints

Currently, EU commission is encouraging businesses by giving grants to the companies that manufactures in Europe.
Harrybaker may benefit to the tune of $2m.
However, there are some constraints on the use of the funding:
▪ It must be used within three years of the date on which it was approved by the National Government
▪ It must be used to improve manufacturing research and training
▪ It must not be used to upgrade internal facilities (unless the public will also gain from the improvement)
▪ It must not be spent on IT or related technical items.

PMO, in collaboration with Strategy department with approval from Senior Management have identifies a few
Programs.

PMO
Here is the current structure of Harrybaker’s PMO and how it works with strategy department

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100Best Program
If Harrybaker goes forward with the idea of being listed in the “100 Best Food Websites” the current work they have
identified are:

• 20% discount for all repeat customers

• A promotional calendar as a free Christmas gift - would target current and prospective customers and the
benefits would last into a second year
• A significant upgrade to the existing website (or even a new website) in order to offer more advanced features
to engage with their customers
• A complete rebranding of the Harrybaker Marmalade image
• Creation of a larger office by moving from the current office: from their small farm building to one of the much
larger ones.
• Recruitment of 60 more staff to help with the increased workload
• A marketing campaign to take advantage of the success of the recent award

From initial research done it seems that Harrybaker could rebrand for $200,000. The office move and refit would cost
$350,000. A recruitment campaign including a local recruitment event would cost $180,000 (assuming a percentage
fee to be paid for 60 staff, based on an average salary of $20,000 per annum). A local company would be engaged for
the recruitment.

Costs for the website are $124,000 to build, plus a support contract of $4000 per month. Initial estimates suggest that
the profit from increased sales could pay for the cost of the website within a few months.

It is critical that the efficiency of the existing website, processes and systems are not affected while any changes are
made.

The priority for marketing department is to create a promotional calendar for next year for all its current and
prospective customers. This decision is in support of its market expansion and deeper relationship strategy. The end
product of this project will be a prepared calendar pack, ready for printing. The Marketing Director will be funding
the project from the business marketing budget. She believes that the effect of a good company image portrayed by
a successful calendar would last into a second year. She has forecast the same increase in orders for a second year
and predicts that the annual employee satisfaction survey will show a measurable improvement in staff morale.

In financial terms, there were a total of 1,500 orders in the last financial year, each with an average
profit of $2,000. The Marketing department believes that sending a promotional calendar to the
company's current and prospective customers would increase orders by at least 10%, with a minimum
of 10 further orders from the list of prospective customers within 12 months from the date of
distribution.

The design of the calendar will be similar to one sent out previously, and must reflect the company image as
described in the existing corporate branding standards. Another project is currently producing a new company logo
which is to be printed on each page of the promotional calendar. The prepared calendar pack will consist of:

• Design for each month - correctly showing all public holidays and new company logo
• Selected photographs - 12 professionally produced photographs, showing different members of staff
• Selected paper and selected envelope - for printing and mailing the calendar
• Chosen label design - a competition to design a label will be held as part of this project
• List of customers - names and addresses of customers to whom the calendar will be sent.

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The project is currently in initiation and will have two further stages:

Stage 2 will include the activities to:

• create the customer list using information from the Accounts and Marketing departments
• confirm compliance with the Data Protection Legislation
• create a design for each month - this will be done by the internal creative team
• select and appoint a professional photographer
• gather photograph design ideas from previous project and agree photographic session schedule
• prepare a production cost forecast
• select paper and envelope.

Stage 3 will include the activities to:

• produce and select the professionally taken photographs
• hold the label design competition and choose the label design
• assemble the prepared calendar pack.

It is now 05 October and the prepared calendar pack must be delivered to the print company by 30 November, to
enable printing and distribution of the calendar in time for Christmas. The cost of the activities to develop the
specialist products and the cost of the project management activities are estimated to be $20,000. There is a project
time tolerance of +1 week / -2 weeks and a project cost tolerance of +$6,000 / -$6,000. A change budget of $500 has
been allocated but there is no risk budget. The project manager has been made aware of the requirement to comply
with ISO 27001 and corporate branding standard.

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Training Program
Objectives and Benefits
The Training Programme will completely re-design training provision over the next three years. An
objective is for Harrybaker to be recognized as one of the top five internal training providers in its industry
sector. This will ensure that all staff can benefit from greatly enhanced training and development. It is
anticipated that this approach will deliver market-leading customer service. As a result, it is hoped
that this will lead to increased customer satisfaction and more sales. The idea is to introduce new
training delivery methods, including distance learning, and to reduce residential training as much as
possible. This will be done by establishing smaller, more local training facilities in nine new centres
around the country, resulting in a total of ten centres including Northtown.

Benefits are anticipated in the following areas: an increase in the proportion of staff receiving training,
improved personal development, and increased customer satisfaction - all leading to lower staff
turnover costs and more sales.

Project 1 (Outsource Specialized Training)

Objectives:
▪ To decide which courses will be outsourced
▪ To select and contract with a suitable supplier.
Dependencies:
Communications with Project 2 (Training Design) need to be managed well. This will ensure that
any outsourced courses are still part of the overall training requirement.

Project 2 (Training Design)

Objectives:
Stage 1: Review Prospectus
▪ To decide whether to retain, combine, delete or replace courses by new training delivery methods (for
example, distance learning).
Stage 2: Update Material
▪ To update all classroom-based course material
▪ To publish a revised training prospectus with full details of each course.

Project 3 (New Training Methods)

Objectives:
▪ To investigate requirements
▪ To develop new training delivery methods, including distance learning.
Dependencies:
This project is dependent on Stage 1 of Project 2 (Training Design).

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Additional Information
Governance
The Corporate Board consists of the following individuals:

▪ Chief Executive Officer (CEO): He started the company 25 years ago and knows his job very well. He injured
his leg two years ago which has restricted his visits to the engineering area. As CEO he has an overall
perspective of the business strategic requirements and the authority to commit resources as required. He is
responsible for establishing and delivering the primary goals of the Corporate Board
▪ Chief Financial Officer: responsible for mergers and acquisitions, and for corporate support
▪ functions such as human resources and IT
▪ Development Director: responsible for business transformation programmes and projects
▪ Operations Director: responsible for the day-to-day running of the businesses, including retail,
▪ distribution and manufacturing
▪ Marketing Director: responsible for worldwide marketing and sales. She has been with the company for
three years, following a successful career with a publicity company. She has the ability to represent the
needs of the business, particularly as this is a marketing project. She has the authority to commit the annual
business marketing budget, from which the project will be funded, as she sees appropriate. She will be
responsible for monitoring
the expected benefits of the calendar, in particular the improvement of the company's image.

Other Members
▪ Head Sales: Sets sales strategy, align the sales structure with the strategy, manage people and implement
process.
▪ Head Marketing: Sets the marketing agenda for the company based on the overall company objectives.
▪ HR Business Partner: Works closely with leaders and management teams to help build organisational and
people capabilities. Works with the organisation to shape and implement effective HR strategies and
programmes, drawing on their unique knowledge as people professionals
▪ Engineering Manager: He has been responsible for many engineering innovations in the company
and is still as keen and energetic as the day he started. Whilst he will not be part of the project team,
his staff will feature in the photographs for the promotional calendar.
▪ Central Records: This group of five staff looks after all company records and document control. They
now maintain all project files.
▪ Bright Lights: This is the local office supplies company. It supplies all the stationery and office
equipment needs of the company and will supply the stationery for this project.
▪ Portraits Ltd: This is a professional photographic company with a number of excellent
photographers and a history of successful work. This company has been selected to take the
photographs for the company calendar. It has yet to be decided which of the photographers to use.