Organisational Behaviour & Management BMA4001

Choose any one case study for this assessment.

1. ZARA CASE STUDY

ForthesecondassessmentofmoduleBMA4001OrganisationalBehaviour&Management,youare required to write an essay of 2,500 words (+/- 10%). Youmust chooseoneofthreepossiblescenarios,whenwritingyouressay.

Youshouldchooseonescenariofromthelistbelow.Foryourchosenscenario,usingmoduleconceptsasthebasisofyouranalysis,writeanessaydiscussingthe following:

• HowthechangeofstrategywillimpactMarketing,HumanResources,OperationsManagement, Information Systems, and the Finances within the organisation (worth up to 80%ofthemarks)
• The remaining marks will be awarded for how well your report is written, critical discussion and evidence of wider reading is expected. (worth up to 20% of the marks)
• Scenario1:Zara aims to become a brand that is recognised for their climate change action.
• Scenario2:Zara chooses to offer franchise opportunities to entrepreneurs seeking to buy a franchise.
• Scenario 3:Zara aims to open 12 new bricks and mortar stores in 3 different continents (4 stores per continent Asia, Australasia, South America) in accordance with a multi-national strategy.

BMA4001-20EssayCaseMaterialA(2022)

CaseStudybackground:Zara:ABetterFashionBusinessModel

Zara is one of the most well-known brands in the world and is also one of the largest international fashion companies. They are the third largest brand in the garment industry and are a unit of Inditex. Their flagship range of chain stores are headquartered in Spain. Zara opened its first outlet in Spain in 1975. The headquarters of the company is based in Galicia. There are more than 2600 stores across 73 countries in the world. The Zara clothing line accounts for a huge bulk of its parent groups revenues. There are other brands of clothing owned by Inditex such as Kiddy s Class (childrens fashion), Pull and Bear (youth casual clothes), Massimo Dutti (quality and conventional fashion), Bershka (avant-garde clothing), Stradivarius (trendy garments for young woman), Oysho (undergarment chain) and Zara Home (household textiles). Inditex owns all Zara outlets except forplaces where they are not allowed ownership of stores (thats where Franchises step in).

Zara is renowned for coming up with products on a short timescale instead of taking a long time. They are known for taking around 2 weeks to develop products and have been known to come up with around 10,000 new designs every year (which is an industry record). They have bucked the trend by making productions in Europe instead of shifting their entire production to lower income and middle-income countries. However, some of their clothes are manufactured in parts of Asia due to the fact that they have a longer shelf life. They make most of their own products inside Spain or other European Countries as they own a large number of factories in both Spain and Portugal. They also dont have to depend on anyone else as they can get everything done by themselves.

Source: Inditex.com (2022)

ZarasFastFashionBusinessModel

Zaras business model is based on the principle that it can sell medium quality fashion clothing at affordable prices. Zara is unique in the way that it does not spend money on marketing and instead concentrates on opening new stores instead. Their brave experiments have led them to be labelled as one of the most innovative retailers in the world.

Zara started out with low priced products which were pale imitations of high-end fashion products. This move led to Zara being a smashing success and allowed them to expand by opening more stores in Spain. The company management also managed to reduce the time it took to create new designs and came up with the term instant fashionwhichallowedthemto quickly capitalise on new trends. Zara is known to use teams of designers instead ofindividuals.

Vertical integration and the ability to come up with a quick response is a key factor to Zaras successful business model. The process for Zara has been designed in such a way that it has the various functions within the business system such as designing, sourcing, and manufacturing, distribution, and retailing. They do all of these themselves and that is one reason why their growth rate has been so good. However, what goes up must come down and Zara is not immune to being impacted by the problems we are facing in the world today.

Source: Inditex.com (2022)

ProblemswithZarasBusinessModel

Zara is facing a few issues which can cause them a number of problems in the future, despite the fact that Zara has a consistent business system which gives them a competitive advantage. Zaras greatest advantage is their ability to successfully leverage economies of scale and they have been able to ramp up their distribution system as a result. The continued growth is good for them in every way. They have been helped a lot by their expansion in international markets. However, their continued growth in international markets will be curtailed due to the reason that Zara has a very centralised logistics model. Zara has its main distribution centre in Spain, and it wont be easy trying to expand as they have their base in Spain alone. This is presently affecting any plans that they have to go international and to target more regions.They cant simply survive with a European presence alone. Zara needs to come up with a strategy so they can compete globally.Formoreinformation,pleaseseehttps://www.inditex.com/

2. MASTER CARD CASE STUDY:

For the second assessment of module BMA4001 Organisational Behaviour & Management, you are required to write an essay of 2,500 words (+/- 10%). You have approximately 2 weeks, to write your essay, concerning how the change of strategy will impact the main business functions. You must chooseoneof three possible scenarios, when writing your essay.

You should chooseonescenario from the list below.For your chosen scenario, using module concepts as the basis of your analysis, write an essay discussing the following:

How the change of strategy will impact Marketing, Human Resources, Operations Management, Information Systems, and the Finances within the organisation (worth up to 80% of the marks).

The remaining marks will be awarded for how well your report is written, critical discussion and evidence of wider reading is expected (worth up to 20% of the marks).

• Scenario 1:MasterCard decides to go green in payments. They pledge to switch100% of payments to green payments by 2030, in-order to reduce first-use PVC plastic in card manufacturing.
• Scenario 2:MasterCard agree to merge their company with the Visa group (https://www.visa.co.uk/about-visa/our_business.html).
• Scenario 3:MasterCard decides to roll out its Enabling SMEs initiative to ensure all micro, small, and medium sized UK enterprises have access to credit and other financial services before the end of 2023.

BMA4001-20BusinessEssayCaseMaterialB(2022)

CaseStudybackground:MasterCardsBusinessModel

What exactly does MasterCard do? It provides credit, debit, and prepaid cards from over 25,000 financial institutions. However, MasterCard is primarily a credit card company and specialises in the innovation of these cards throughout the world. It is also a payment solutions company and through its three-tiered business model as franchisor, processor and adviser, the company has developed a new world for its card holders and merchants. The company provides marketing, approval, and transaction services for a variety of payment products in more than 210 countries and territories across the globe.

Source: Mastercard.com (2022)

Regardlessofthetypeofcard,allofthemactunderthefour-party payment system. Under this system there are four types of people, the card holder, the issuing bank, the merchant, and the acquiring bank. First, the issuing bank provides their customer with a card that they market and issue throughout their locations. Then the now card holder buys a good or service. But before there are even cardholders buying goods or services at this said business, the merchants bank (or acquiring bank) must first enrol the merchant in a program that accepts MasterCard (Cirrus or Maestro) cards. The merchant (or the salesperson) then (can and does) accepts the MasterCard payment in exchange for that good or service instead of cash. The transaction is over, the card holder receives the good or service and the merchant receives the cash a few days later. MasterCard manages a few payment card brands, including MasterCard, Maestro, and Cirrus. MasterCard generate revenues from the fees that it charges its customers for providing transaction processing and other payment-related services operations fees, and by assessing its customers based on the dollar or pound volume of activity on the cards that carry its brands.

MasterCardHistory

Source: Mastercard.com (2022)

MasterCard was established in the late 1940s when several US banks began exploring alternatives to cash transactions. In 1951, the Franklin National Bank in New York created the first formalcredit card, and through the 1950s, the system expanded. Later, in 1966, a group of banks under the name Interbank Card Association entered the business. Instantly this company spread and went global. In the 1970s it changed its name to MasterCard.

MasterCard was the first to introduce a few things. This included a goldbankcard program in 1981, the use of laser holograms to prevent fraud in 1983, andby1987wasthefirstcredit cardcompany to penetrate the Chinese market. MasterCard took several key steps during the 1990s. The company launched Maestro in 1991, a partnership with counterpart Europay International, which was the worlds first global online debit program. The first coast-to-coast national online debit transaction in the US was completed by Maestro in 1992. In 1996, it introduced the MasterCard Global Service, the first program to offer customers telephone access to core emergency and special services around the world. MasterCard merged with European counterpart Europay in 2002, to facilitate the merger transaction with Europay. Europay was integrated into the global organization as MasterCards Europe region. In 2004, the company announced plans to become a public company in 2005. MasterCard made its initial public offering on the New York Stock Exchange (NYSE) in May 2006. In the same year, MasterCard introduced new corporate name, MasterCard Worldwide, and adopted a new corporate signature and tagline, The Heart of Commerce. These two new concepts were established to express the global nature of MasterCard.

InternationalisationofMasterCard

It has already been stated that MasterCard is a global digital economy. Two years after MasterCard, or Interbank Card Association, was founded (1968) they entered the global market by making their presence known in the Mexican, Japanese, and European markets. In 1987 they entered the Chinese Market. This was very special for MasterCard because this was the first ever payment card accepted there. A year later, in 1988, MasterCard entered the Soviet Union. Now, MasterCard is in any geographical area that one can think of and with the help of the other cards it owns (like Maestro) it has dominated most of its competitors in all areas.

Master Card recently reported that it generates half of its revenue outside the US, making its revenue sources more geographically diverse than those of major competitor like Visa. Part of MasterCards gain came from the gradual conversion of some European debit cards to Maestro over the past five years. Now, MasterCard currently has 37% of card payment transactions in Eastern Europe. This is a huge percentage because the company is up against American Express and Visa as well as other lesser-known European credit card companies. It does this by taking advantage of its strong Maestro position in Western Europe. Although MasterCard is doing quite well in the European market it is having some issues with its Maestro brand. This is due to their late entry into the European market. It now has to compete with well established brands like Germanys ec-Karte card.Both are almost identical in use, so it is hard to market Maestro over these cards.

Master Card has more cards/card holders than its competitors in the fast- growing South Asian markets including Indonesia, Malaysia, and the Philippines. Although MasterCards card payment transaction value share is higher only in the Philippines, growing card usage in South Asian markets will translate into greater value share for MasterCard in the long term, particularly in the Philippines and Malaysia.

Master Card also has great stakes in the Latin American region. It has almost 50% of debit transactions in Brazil. This is due to its recent conversion from its partners debit cards (Redecard) to its Maestro debit cards. MasterCard is also one of the biggest card issuers today in Colombia. They see great potential in this market due to increasing use of theircredit cards. In Mexico, MasterCard is dominating the prepaid card industry.

Source: Mastercard.com (2022)

All in all, MasterCard, Internationally, is huge competitor. It has first movers advantage in some areas, specialty advantage in other areas, and even preference advantages in the remaining areas. With more advertisement and understanding of the countries they work in; MasterCard will fully dominate the plastic card industry.For more information, please see:

https://www.mastercard.com/global/en/vision/who-we-are.html

Submission Details:

Please ensure your report is uploaded into Turnitin by the deadline. You will receive detailed feedback and your mark within 3 weeks of this date. Late submissions (up to one week late) will be capped at 40%, if more than one week late these submissions will fail. If you are unable to complete your report by the submission deadline and feel you have grounds for an extension, please contact Module Co-ordinator about your request, and before the deadline date.

Marking Criteria: BMA4001-20, Assessment 2

A Business Case Essay of 2,500 words (+/-10%) 60% of the module marks