Case Ready Foods Company
Ready Foods is a regional packaged food company that makes and sells food products in supermarkets. The company’s most popular brands have traditionally been nonperishable foods that are easy to prepare, often with little regard for nutritional value. For the last 20 years, these brands have made the company highly profitable and its employees have become accustomed to big paychecks and generous benefits, including a three-week annual paid holiday, a well-funded retirement program, and college tuition reimbursement for children of employees. However, in recent years, company sales and profits have declined because consumer preferences have shifted to favor fresher, healthier foods not currently provided by the company.
Bruce Berry has been the CEO of the company for five years, and the shift in customer preferences to healthier options has been his major management problem. Over the past few years Bruce has made incremental changes to the company’s products, but none of these changes have reduced the decline in sales and profits. He knew that for the company to survive, it would be necessary in the coming year to make more significant changes in the company’s products and marketing strategy.
After considerable marketing research, Bruce determined that the company needed to expand its offerings and invest in a program to develop and offer fresh, organic foods to support the healthier lifestyle of many potential customers. However, this program would require funds that would not be available as the company’s profits continued to decline. Bruce did not like the idea of employee layoffs as a means of securing the necessary funds, and he decided instead to cut some employee benefits that seemed excessive and unnecessary for his type of company. He assumed that most employees would be willing to lose these benefits to enable the company to pay for the new fresh foods program without having to lay off any employees. However, he did not try to explain the need for his decision or seek the suggestions and support of employees. Bruce believed that he had the responsibility and authority to make this type of decision, and that it was why he was paid more than most CEOs of similar companies.
When the changes were announced, many employees were very upset that their benefits were being cut. Most employees believed the fresh foods program was unnecessary. They saw it as an overreaction to a temporary change in customer preferences, and they believed company sales and profits would recover to the levels achieved for many years without such a program. Many employees believed the cut in benefits was excessive and felt like the company did not value their years of service. This resentment caused some employees to seek employment elsewhere, and others found ways to delay the development and implementation of the fresh foods program. It took months to find qualified replacements for the employees who left and to regain employee trust. Meanwhile, the lack of healthier options continued to hurt company performance.
Written by Daniel P. Gullifor and William L. Gardner
Read Case Ready Foods Company (end of Chapter 5)
In 500 words, answer the following questions:
1. Why did Bruce fail to successfully implement the changes?
2. What could Bruce have done differently to plan and implement the new program more successfully?
