Reference no: EM133243123

FashionSia

FashionSia is one of the fashion companies operating in Saudi Arabia. It has been a leader in the fashion industry for more than 30 years. FashionSia manufactures and sells clothes and shoes for all types of customers. The company has pursued a low-cost strategy in order to sustain its success. It sells a limited number of clothes and shoes designs and has held costs low through manufacturing efficiency and standardized operations. However, the past years have been a struggle at FashionSia. The fashion market has seen a rise in the availability of low-cost imported clothes and shoes that has threatened FashionSia's competitive position. As a result, company executives have decided it is time for a strategy shift.

FashionSia executives have done extensive market research and determined that many niche athletic clothes and shoes markets exist where athletes are willing to pay more for clothes and shoes designed to meet the unique needs of their sport. There are very few competitors in these niche athletic clothes and shoes markets, and most do not have FashionSia's past experience in keeping control of manufacturing costs. FashionSia has determined that with talented clothes and shoes designers in place, they can manufacture athletic clothes and shoes to meet the needs of the niche markets using their current manufacturing facilities and employees.

By designing clothes and shoes that have features that differ from competitors and meet the specific needs of a new group of customers, FashionSia believes the company can create a competitive advantage. Further, while their products will not be as low cost as they were in the past, they will likely be able to sell their products for less than market competitors and still make a healthy profit. Therefore, FashionSia has decided to shift from its current low-cost strategy to a differentiation strategy and will begin production to make specialty athletic clothes and shoes. FashionSia must now make many tactical decisions in various functional areas of the company to support its decision to shift its overall business strategy.

Its first priority is to restructure the product development function. As it will need to understand the needs of the niche markets and design clothes and shoes to meet those needs, it will need to hire and retain talented clothes and shoes designers. The company will also need to hire operations specialists to transit its manufacturing operations to produce the new clothes and shoes designs. Beyond hiring new staff, FashionSia also must consider the implications for current employees to help them successfully transit to their new work requirements. Therefore, there are several considerations the company must address in the area of human resource management.

1. Following FashionSia's shift in competitive strategy, what are some considerations for thecompany's human resource management practices?

2. As a Human Resource practitioner, propose a holistic approach towards designing the compensation and benefits program at FashionSia.