Reference no: EM133419432

Case Study: Change at Tiger Boots

Tiger Brand Boots has been manufacturing high-quality leather boots and shoes primarily for use in the skilled trades and heavy construction work markets since 1935. Tiger Boots are built tough, to withstand potentially dirty and demanding working conditions, and last for years. In addition to being tough, Tiger Boots must be comfortable to wear and work in all day long. Tiger Boots is one of only three boot/shoe companies in the United States that still performs all manufacturing activities in the United States. This adds the distinct benefit of a made-in-America label to a boot that has built a solid reputation as being among the best work boots available. Tiger currently sells its footwear through retailers of work and safety clothing and goods, as well as its own nine factory-owned retail stores and an online store within the United States. With 250 factory workers, 50 corporate employees, 30 workers in distribution, and 45 retail employees, Tiger generates roughly $200 million in revenues yearly.

While the cost of American labour is much higher than the labour rates available to the majority of the boot and shoe manufacturers who use overseas manufacturing, the cost disadvantage is partly offset by the fact that Tiger Boots has its own tannery. The animal hides used in the production of leather boots and shoes must be put through a lengthy treatment process before being dyed and then used to make boots or shoes. This ancient art is performed in tanneries, of which there are only a few remaining in North America. With so few tanneries in the world and the importance of high-quality leathers in the production of boots and shoes, tanneries can have a strong influence on the price and quality of leathers available to manufacturers. Thus, Tiger Boots' tannery is an important resource to the firm. Tiger Boots are priced at the top end of the market for work boots and shoes. The average price for a pair of Tiger Boots is around $300, with a range from $250 to roughly $450 for the company's products, whereas many of its competitors in the boot/shoe industry price their products at $100 or less. However, Tiger Boots claims that many of their boots that were purchased five years ago or more are still being worn today, and that with proper care and maintenance, a Tiger boot has an indefinite lifespan. To support this claim, Tiger's website shows many of the aspects of the company's production methods, which involve a high degree of highly skilled hand-crafted work and include a recrafting service. Once the sole wears out of the boots or shoes, owners of Tiger Brand Boots can return their footwear to the company where the boot will be completely stripped down and rebuilt with a new sole and refinishing the leather on the equipment used to originally produce the boot, all for a modest fee (around $125).

The market for work boots has been steady over the past 25 years, and production can be forecast relatively easily using economic indicators of growth in the construction and skilled trades industries. Tiger Brand Boots has a very strong brand name in these markets and its market share has remained steady at around 10 percent. However, while 80 percent of its production is purchased in the construction and skilled trades market, the other 20 percent of production goes to the casual menswear fashion market, and this trend is increasing. It seems that young men are increasingly wearing high-quality leather boots and shoes as part of current fashion trends, and Tiger Brand's cachet in the construction and skilled trades market gives it added value as a choice of menswear. Tiger does not have the manufacturing capacity or organizational capabilities to adequately serve the growing casual menswear market without making changes, and management is at a crossroads. Dave Davenport, the CEO, believes that this represents a tremendous opportunity for Tiger Brand Boots to create a new market and become a bigger company. Preet Gupta, the head of operations is not so convinced; she points out that in order to develop this market, Tiger will need to adopt an entirely new marketing strategy, deepen relationships with popular retailers like Aldo and The Gap, to say nothing of the differences in boot and shoe design between the construction market and the casual menswear market. Do buyers in the casual market really want a steel-toed dress shoe? New designers will need to be hired, and the manufacturing needs of the as-yet-unknown boot and shoe designs will need to be assessed. On top of all this, the cost of leather is increasing due to the increased global demand for leather goods. Tiger's boots are currently double the cost of the average buyer's boot/shoe. As the cost of production continues to increase, will Tiger have to price itself out of the market altogether, or cut its quality to better compete with the lower end of the market? Finally, expanding into this market would require hiring and training another shift of workers. Given that Tiger uses skilled workers, training will take more than a month to bring a new employee to the point of being self-sufficient on the production line.

Dave has countered that this expansion would take advantage of Tiger's tannery, which would protect Tiger from many of the effects of the increase in the price of leather. Dave also believes that these other required capabilities can be developed quickly, or that Tiger could consider producing a new "economy" line of boots and shoes for the casual menswear market that uses the same leathers as the premium footwear, but is glued together rather than hand-stitched, and so cannot be recrafted. This line of footwear would not require the level of skilled production of the premium line, but would retain much of the Tiger look and feel that customers have come to appreciate. Cecily Wan, head of marketing, bristles every time she hears this suggestion, and warns that such a line of economy boots would threaten Tiger Boot's value proposition and threaten Tiger's strong brand value. However, she is excited by the possibility of expanding into a new market, and the enormous opportunity that an expansion could hold for Tiger Brand Boots.

At the most recent corporate meeting, senior management agreed that this expansion is worth the risk. However, they are not certain how to introduce this idea to employees, or how to proceed with the change. Some of the questions and concerns even among senior management are not yet fully answered or addressed, and the line employees are likely to raise many issues as well, especially around the ways in which their jobs may be affected as a result of the proposed changes. Although they are not unionized, the employees are highly skilled and Tiger Boots holds its long-standing employees in very high regard.

QUESTION:

Would you recommend that Tiger Boots take a planned approach, emergent approach, or blended approach to this change effort? If you think the company should take a blended approach, what portions of the change should be planned and what should be emergent?

Explain your choice of approach with a draft of your change plan.