EBS China: Challenges and Strategic Solutions for Growth

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Jun 10, 2024

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EBS in China Case Study Analysis MBA 510 M E G A N T H O M A S M I C H A E L S M I T H K E L LY G I L M O R E

Table of Content • Company Overview • Organizational Culture • Identifying the Problem • Implications of General Solutions for the Organization • Organizational Strategies and Change Management

EBS Company Background • In the safety products and services industry, Environmental & Best Safety (EBS) China was a subsidiary of a mid-sized American company. The company had used a variety of strategies to enter the Chinese market between 2000 and 2015, including exploration and learning of the local market, autonomous local R&D, transferring local knowledge to central research, and returning to localization at different points. The company employs about 900 workers. Over the past five quarters, EBS's global business had continuously declined. Even worse was the situation in China, where sales for EBS were significantly below their initial target, which had been their fastest-growing market for a decade. A decision had to be made about the next step in EBS China's business strategy in 2015 by the global EBS president and the head of EBS China. In order for EBS China to re-position itself within EBS worldwide, the meeting would be crucial (Lu, L., Beamish, P., Jiao, B., & Lu, J, 2016)

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Organizational Culture Employee First” management approach ncouraging employees to solve problems and speak up ithout fear of repercussions ee Exchange of ideas is encouraged and supported nancial performance based on more than accomplishing ask, instead based on doing it right

Identifying the Problem • Product was pulled from the market due to quality issues • EBS China’s competence and loyalty were questioned by Headquarters (Lu et al., 2016) • Conflict occurred between the Global and Chinese R&D (research and development) team • New global R&D strategy for EBS: • Development of at least two new products every year • Adopt a “centralization strategy” • No new product development in China • Chinese market impacted by the centralized product development approach • Frustration with product design and features Recap: The problems that EBB is facing include product recalls, poor customer service, declining sales, and low on-time delivery percentages, the organization needed to implement a series of targeted solutions.

EBS Organizational Issues • There is a conflict between the Chinese and global R&D teams regarding the time to market of new products and project management processes. • In response to market demand, Anne Lee, the Director of Research and Development, violated and bypassed standard project review protocols. • There were some product designs that were not user-friendly. • As a result of moving all R&D activities to the United States, the Chinese market was not able to provide direct and timely feedback. • Over the past few years, EBS has seen very slow growth in new products. Every two years, only one product will be developed.

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Implications and General Solutions for the Organization • Not everyone adhere to the “Employee First” motto • Communication lacking between the Global and Chinese R&D teams • Distrust in the company from both customers (external stakeholders) and employees (internal stakeholders) • Sales decrease after product pulled from the market • Poor on time delivery rate of 46% • Quality Control issues General Solution Overview To address the complex issues of product recalls, poor customer service, declining sales, and low on-time delivery percentages, the organization needs to implement a series of targeted solutions. By implementing these general solutions, the organization can tackle its current challenges holistically, improve operational efficiency, enhance customer satisfaction, and ultimately drive a turnaround in performance.

A general proposal that encompasses various business aspects: Product Recalls 1. Strengthen Quality Control: - Implement Robust Quality Management Systems (QMS): Adopt ISO 9001 standards or similar to ensure consistent quality and continuous improvement. - Regular Audits: Conduct regular internal and external audits to identify and rectify potential quality issues before they lead to recalls. 2. Supplier Management: - Supplier Audits: Perform regular audits of suppliers to ensure they meet quality standards. - Collaborative Relationships: Work closely with suppliers to improve the quality of raw materials and components. 3. Product Testing: - Enhanced Testing Protocols: Implement rigorous testing protocols at various stages of production to catch defects early. - Invest in Technology: Use advanced technologies like AI for predictive maintenance and quality control. Customer Service Problems 1. Training and Development: - Customer Service Training: Provide comprehensive training programs for customer service representatives to improve their skills and knowledge. - Empathy and Resolution Skills: Focus on developing empathy and problem-solving skills. 2. Customer Feedback Systems: - Feedback Channels: Establish multiple channels for customers to provide feedback (e.g., surveys, social media, customer service hotlines). - Action on Feedback: Implement a system to analyze feedback and take corrective actions promptly. 3. Technology Integration: - CRM Systems: Invest in robust Customer Relationship Management (CRM) systems to track customer interactions and improve service efficiency. - Chatbots and AI: Utilize chatbots and AI for handling routine inquiries, allowing human agents to focus on complex issues.

Declining Sales 1. Market Analysis and Strategy: - Market Research: Conduct thorough market research to understand customer needs, preferences, and market trends. - Competitive Analysis: Analyze competitors to identify gaps and opportunities. 2. Product Development: - Innovative Products: Invest in R&D to develop innovative products that meet current market demands. - Customer-Centric Design: Involve customers in the product development process to ensure new products meet their needs. 3. Marketing and Sales: - Targeted Marketing Campaigns: Develop targeted marketing campaigns to reach potential customers effectively. - Sales Training: Enhance the skills of the sales team with regular training and development programs. Low On-Time Delivery Percentage 1. Supply Chain Optimization: - Supply Chain Analysis: Perform a thorough analysis of the supply chain to identify bottlenecks and inefficiencies. - Streamline Processes: Implement Lean principles to streamline processes and reduce lead times. 2. Inventory Management: - Just-In-Time (JIT): Adopt Just-In-Time inventory management to reduce excess inventory and improve delivery times. - Advanced Planning Systems: Use advanced planning and scheduling systems to optimize inventory levels and production schedules. 3. Logistics and Distribution: - Logistics Partnerships: Form strategic partnerships with reliable logistics providers to ensure timely delivery. - Real-Time Tracking: Implement real-time tracking systems to monitor shipments and address delays proactively.

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General Organizational Solutions 1. Cultural Transformation: - Customer-Centric Culture: Foster a culture that prioritizes customer satisfaction and quality. - Employee Engagement: Engage employees by involving them in decision-making processes and recognizing their contributions. 2. Technology and Innovation: - Digital Transformation: Invest in digital transformation initiatives to improve efficiency and responsiveness. - Data Analytics: Use data analytics to gain insights into operations, customer behavior, and market trends. 3. Performance Management: - KPIs and Metrics: Define clear KPIs to measure progress in key areas such as quality, customer satisfaction, sales, and delivery performance. - Regular Reviews: Conduct regular performance reviews and adjust strategies based on data-driven insights. 4. Cross-Functional Collaboration: - Collaborative Teams: Create cross-functional teams to address specific issues, ensuring diverse perspectives and expertise. - Integrated Planning: Integrate planning across departments to ensure alignment and coordination.

Organizational Strategies and Change Management Organizational Communication Strategies Product Recalls 1. Prompt & Transparent Communication: - Open Channels: Establish open channels of communication where employees feel comfortable sharing concerns and suggestions. - Regular Updates: Provide regular updates on the progress of change initiatives through newsletters, town hall meetings, and intranet portals. -Transparency: Provide detailed information about the recall reasons, potential risks, and steps customers should take 2. Customer Communication: - Proactive Customer Service: Communicate proactively with customers about recalls, expected resolutions, and improvements being made. - Feedback Mechanisms: Implement robust feedback mechanisms to gather customer insights and address concerns promptly. 3. Internal Communication: - **Cross-Functional Teams: Create cross-functional teams to ensure diverse perspectives and collaborative problem-solving. - Internal Campaigns:** Launch internal campaigns to promote the change vision and celebrate small wins. 4. Crisis Communication: - Preparedness: Develop a crisis communication plan to address recalls and service issues swiftly. - Consistency: Ensure consistent messaging across all communication channels to maintain trust and credibility 5. Engagement and Motivation: - Recognition Programs: Recognize and reward employees who contribute significantly to the change initiatives. - Employee Involvement: Involve employees in decision-making processes to increase their sense of ownership and commitment 6. Customer-Centric Culture: - Customer-Focused Training: Train employees on the importance of customer satisfaction and how their roles impact the customer experience. - Customer Stories: Share customer success stories and feedback to reinforce the importance of customer-centricity. 7. Media Relations: - Media Statements: Prepare press releases and statements for media outlets to ensure consistent messaging. - Spokesperson Training: Train designated spokespeople to effectively communicate with the media and the public.

Customer Service Problems 1. Training and Empowerment: - Communication Skills Training: Provide ongoing training to customer service representatives on active listening, empathy, and conflict resolution. - Empowerment: Empower frontline staff to make decisions and resolve issues promptly without escalating to higher levels. 2. Feedback Mechanisms: - Surveys and Feedback Forms: Implement regular customer feedback surveys to gauge satisfaction levels and identify areas for improvement. - Real-Time Monitoring: Monitor social media, review sites, and customer service interactions in real-time to address issues proactively. 3. Internal Communication: - Knowledge Sharing: Facilitate knowledge-sharing sessions among customer service teams to exchange best practices and insights. - Regular Updates: Provide regular updates to customer service staff on product changes, policies, and procedures. Metrics and Monitoring 1. Key Performance Indicators (KPIs): - Define KPIs: Establish KPIs to measure progress in areas such as product quality, customer satisfaction, sales performance, and delivery reliability. - Regular Monitoring: Continuously monitor these KPIs to identify trends and make necessary adjustments. 2. Feedback Loops: - Continuous Feedback: Create continuous feedback loops with employees and customers to gather insights and make iterative improvements. - Adaptability: Be prepared to adapt strategies based on feedback and evolving circumstances 3. Performance Reviews: - Regular Reviews: Conduct regular performance reviews to assess the effectiveness of change initiatives and organizational communication strategies. - Adjust Plans: Make data-driven adjustments to plans and strategies as needed.

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Change Management Strategies 1. Leadership Commitment and Vision: - Define a Clear Vision: Leadership must articulate a clear vision for the change, emphasizing the importance of quality, customer satisfaction, and operational efficiency. - Champion the Change: Leaders should actively champion the change, demonstrating commitment through actions and communication. 2. Stakeholder Engagement: - Identify Stakeholders: Recognize all affected parties including employees, customers, suppliers, and shareholders. - Involve Stakeholders Early: Engage stakeholders early in the process to gather input and build buy-in. 3. Assessment and Diagnostic: - Conduct a Thorough Assessment: Evaluate the root causes of product recalls, customer service issues, sales decline, and delivery problems. - Data-Driven Decisions: Use data analytics to identify patterns and areas that need immediate attention. 4. Develop a Comprehensive Plan: - Action Plan: Create a detailed action plan with specific, measurable, achievable, relevant, and time-bound (SMART) goals. - Prioritization: Prioritize initiatives based on their impact and feasibility. 5. Training and Development: - Skill Enhancement: Provide training to employees on new processes, technologies, and customer service best practices. - **Continuous Learning:** Foster a culture of continuous improvement and learning. 6. Process Improvement: - Lean and Six Sigma: Implement Lean and Six Sigma methodologies to streamline processes and eliminate waste. - Quality Management Systems: Strengthen quality management systems to reduce product recalls and enhance product reliability. 7. Technology and Tools: - Invest in Technology: Adopt advanced technologies for supply chain management, customer relationship management (CRM), and enterprise resource planning (ERP). - Automation: Automate repetitive tasks to improve accuracy and efficiency.

Reference Blanchard, K., & Bowles, S. (2017). Raving Fans: A Revolutionary Approach to Customer Service . William Morrow. Crosby, P. B. (2010). Quality Is Free: The Art of Making Quality Certain . McGraw-Hill Education. Davenport, T. H. (2013). Process Innovation: Reengineering Work Through Information Technology . Harvard Business Press. Goldratt, E. M. (2014). The Goal: A Process of Ongoing Improvement. North River Press. Kotter, J. P. (2012). Leading Change . Harvard Business Review Press. Lu, L., Beamish, P., Jiao, B., & Lu, J. (2016, March 6). EBS IN CHINA [Review of EBS IN CHINA ]. Https://Services.hbsp.harvard.edu/Lti/Links/Content-Launch; Ivey Publishing. www.iveycases.com Mumby, D. K., Kuhn, T. R. (2019). Organizational Communication: A Critical Introduction. Sage Publications. Second Edition. •

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