Traditionally a vertically integrated brewing company, Whitbread (WB) had to face a new market situation in 1992. Anti-monopoly regulations limited the company’s opportunities to profit from economies of scale and further growth opportunities in the beer industry. As a consequence, WB proactively started to diversify and grow a leisure division that was successfully headed by Dean Thomas, who was appointed CEO in 1997. At that time, it seemed clear to outsiders that the beer business would not be profitable in the long-run. However, Thomas adhered to WB’s legacy and tried to close a huge deal to acquire new pubs. Only after the deal had failed, which triggered a severe company crisis (WB’s stock price crashed, Thomas’ reputation and
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However, he took too much time, did not incorporate for change barriers such as cultural, emotional and environmental blocks so that in 2004, WB still suffered from numerous internal problems: e.g. professional brand positioning and consumer research measures weren’t implemented and the organization had not been rebuild, yet, to complement its inside-out with a market-oriented outside-in perspective. The failure to anchor this brand perspective in the corporate culture and the attitudes and behaviors of the staff cannot only be ascribed to a missing vision, but also to the lack of skills and performance-based incentive and reward systems.
WB’s change process was triggered by a company crisis and affected the overall company so that the top-management, foremost the CEO, has direct responsibility for its success. Thomas’ successor will be faced with a series of challenges. He should be aware of the various socio-psychological barriers to change and develop strategies to circumvent them in order to transform and freeze WB in a truly brand-led firm. As a start, he should analyze the effectiveness of the change process, needs for changes in HR and organization and determine specific objectives for both the group, divisions and top managers. Unlike Thomas, he should act in a transparent way and communicate his vision and strategic direction very clearly both to