As Sir Anthony O'Reilly, Chairman of Waterford Wedgwood, noted in a recent speech that they are operating against a "backdrop of unprecedented broad-based economic uncertainty."
This economic uncertainty has had a global impact. From the high rates of business bankruptcies in the United States, to the financial collapse of one of the previously richest countries in the world -- Iceland, to the 11.2 million percent inflation rate of Zimbabwe, no corner of the globe is untouched by the massive liquidation cycle in which the global economy appears to be.
Consumer confidence has declined. Banks have lost faith in one another. Currencies around the world, such as the American dollar, weakened considerably.
And, despite Waterford Wedgwood's more than two hundred years of setting industry standards, the organization must now operate in an economic environment that appears to work directly against their primary products -- luxury lifestyle items.
Yet, despite these trying times, O'Reilly is optimistic about the future mission of the organization. O'Reilly surmises that Waterford Wedgwood has both the right team and the right brands, in place to succeed in their current objectives. These objectives include remaining "the world's leading marketer of premium branded products for tabletop, gifting and home and retain (their) number one or two market positions in the U.S., UK, Canada, Australia, Germany, Ireland, and Japan."
In addition to maintaining and developing their industry leadership position in their selected geographic markets, Waterford Wedgwood's other objectives include maintaining their highest levels of quality, as well as providing the strongest customer relations, in the industry.
Current funding strategies for the company are developed to ensure that Waterford Wedgwood has adequate liquidity to meet these objectives. "As a result of (their) growth, acquisitions and consolidation, (they) have become one of the leading designers, manufacturers and marketers of high quality crystal and ceramics, and one of the world's leading luxury lifestyle goods companies."
New Vision Statement and Mission Statement:
Waterford Wedgwood does not have a current explicit vision statement. Waterford's original vision of creating the finest quality crystal can be expanded, however, to develop a new vision statement appropriate for the multi-divisional, multi-branded lifestyle item conglomerate. The organization's new vision statement should mimic these original thoughts, but with an inclusion of the varied product lines the company now carries. In addition, the current economic environment must be taken into consideration when developing the new vision for the organization, as well as the globalized nature of the industry.
Manufacturing and designing of the finest quality lifestyle products will be an important part of this new vision statement. In addition, the continued partnering with leading designers and celebrities (something not envisioned two centuries ago) should also be part of this vision, as it is one of the aspects that has set Waterford Wedgwood apart from their competitors, in an increasingly competitive marketplace. Lastly, as mentioned, the current economic turmoil experienced and the globalized nature of today's industry must also be included when developing the new vision statement for the company, with a notation of the value a Waterford Wedgwood piece holds.
With these factors in mind, a new vision statement that can be a guiding light for Waterford Wedgwood into the future can be developed. This new vision statement should state:
Waterford Wedgwood plc strives to design and manufacture the finest quality crystal, ceramics, and luxury lifestyle products to beautify the home and provide long lasting value to their customers around the globe. With the partnership of leading designers and celebrities and the highest commitment to customer service, Waterford Wedgwood stands apart from its competitors.
Waterford Wedgwood's current mission statement is, "To continue to be the world's leading portfolio of luxury lifestyle brands with particular emphasis on tabletop, gifting and the home"
as mentioned. A new mission statement should take a variety of components into consideration in its development. These include: Waterford Wedgwood's customers, their products, the market, technology, future growth and profitability, the company's philosophy, their self-concept, concerns regarding the company's public image, and concerns for their employees. Without this mission statement, Waterford Wedgwood will be missing an important tool used to formulate, implement and evaluate their strategic activities. The following matrix demonstrates which critical components of a mission statement that Waterford Wedgwood is currently including or missing in their current mission statement.
Mission Statement Component:
Is it Met in Current Mission Statement? (Yes/No)
Future Growth & Profitability
Public Image Concerns
Analyzing Waterford Wedgwood's current mission statement for these critical components helps in the development of a new mission statement. In the current mission statement, there is no mention of who the company's customers are, which is a key directional component in strategy formulation. The products the company provides are overviewed adequately, however. The geographic market in which the company operates is missing completely, as is any mention of the company's technological capabilities. Waterford Wedgwood's concern for growth and profitability is addressed in their stated desire to remain the world's leading provider in their industry; however, the corporate philosophy (the soul of the company) is missing. Their self-image is shown in their belief that they are a luxury lifestyle goods manufacturer, and clearly this is a public image concern they have, yet there is no mention of their concern for the people who have made their company a success that has spanned centuries -- their employees. With these in mind, the missing components need to be developed for the new mission statement.
Waterford Wedgwood's customers are those who appreciate the quality and fine design of a luxury lifestyle piece that will beautify their home. The company operates globally with a strong presence in the United States, the United Kingdom, Canada, Australia, Germany, Ireland, and Japan.
The company employs manufacturing technology that ensures the highest level of quality in all of their products. In addition, Waterford Wedgwood's company philosophy centers on creating high-end pieces that provide a lasting value that customers will be proud to display in their homes and give as gifts. Lastly, Waterford Wedgwood realize the importance of their employees to their continued success. As such, working conditions are provided and maintained to be a safe and healthy environment. In addition, employees are motivated and kept informed on matters that concern them through consultative procedures.
With these missing factors in mind, Waterford Wedgwood's new mission statement should read:
To continue to be the world's leading portfolio of luxury lifestyle products with particular emphasis on tabletop, gifting and the home, for global customers who appreciate the quality pieces to beautify their home. Manufacturing processes and technology are employed to ensure the highest levels of quality, to create high-end pieces that provide a lasting value. To this end, Waterford Wedgwood employees are the lifeblood of the organization and will be provided an environment in which they are motivated, informed and can work in a safe and healthy environment.
The External Factor Evaluation (EFE) matrix is used to assess business conditions affecting the organization. It can be used to prioritize the opportunities and threats which Waterford Wedgwood faces.
Restructuring to improve profitability
Brand repositioning to increase market share
New product development to increase market share
Potential partnerships with other companies
Merger of other complimentary companies
Declines in luxury goods demand due to economy
Increased competition in the luxury gifts sector
Falling value of the American dollar
Reduced availability of credit due to economy
Reduced trader confidence due to economy
Poor (1), below average (2), above average (3), superior (4)
TOTAL WEIGHTED SCORE
The weighted score of 2.73 indicates that Waterford Wedgwood's current strategies are about average when addressing the external factors affecting the organization, their profitability, and their growth. The most important opportunity factors in this matrix were: restructuring to improve profitability and new product development. The company has taken significant strides to restructure by shifting production of their Johnson Bros. line to China and new product development has been a mainstay of the organization's success. Both of these factors can have a significant impact on the company through a better bottom line and increased revenues. Merger with complimentary companies too is of significant value as it allows the company to enter new markets with increased efficiency and efficacy. Potential partnerships, as the company has done previously with the likes of Versace, Emeril, etc., can have a positive effect; however, the significance with partnering with known designers and celebrities doesn't address the challenges of the current economic challenge. Lastly, brand repositioning may be a possibility; however, Waterford Wedgwood brands are known as luxury brands and repositioning these as anything else may negatively impact the company as entry into medium-grade or lower quality lifestyle goods is…