.Management theory & principles November 20, 2011 Bed Bath & Beyond VS.
Linens ‘n Things The two companies I have chosen to research and dissect on why one has had great success and one has had great failure are Bed Bath and Beyond and Linens ‘n Things. When looking at both companies they seem to be similar to one another with the items they sell, the store layout and policies so why it that one failed and one is still standing. Managements job is to oversee others so their activities are completed efficiently and effectively.After looking into these two companies there seems to be some underlying reasons why. Linens ‘n Things was introduced in 1975 and has been providing high quality home textiles, housewares and decorative accessories. In late 2008 the original Linens ‘n Things declared bankruptcy and closed all its physical stores in North America. A new Linens ‘n Things was launched online at www. LNT.
com that provides a one-stop shopping experience for customers with convenience. I am going to be focusing more on what went wrong from a management standpoint with having to close all stores and filing for bankruptcy.I feel that due to lack of planning, and setting goals, establishing strategies and developing plans to coordinate activities that the managers for the company are responsible for the underachievement. When Linens n’ Things numbers where high and everything was running smooth is when the company should have be planning different goals and strategies that would help them gain a completive edge against the competition and set themselves up as a leader in the industry. The second function of management is organizing which is as important as any of the four steps of management.When you organize you have to determine what actually needs to be done and how it will be done and who is to do it.
They should have been setting up ways to stand apart from the competition instead of following them in all ways and don’t to the same standard as Bed Bath and Beyond. Under organizing falls staffing this would have to be cut in order to have more revenue. They could have cut more full-time staff which they have to offer benefits and replace with part-time workers which they could pay minimum wage.
The third function is leading, motivating and dealing with people. When managing the team at a store I would want to motivate my staff to really engage customers and stress customer service to help drive sales. You could also have different employee motivation programs that help the staff grow as an employee thus making a better work force. With leading managers will have to lay off or fire if they have underperforming employees or need to cut back.Forth is controlling which is monitoring activities to ensure that they are accomplished as planned with will hopefully lead to achieving the organizations original purpose. Linen n’ Things needed the leadership to monitor and control how much was been spent for payroll and how much was coming in with revenue.
The problem with Linen n’ Things is that it had been taken private in a leveraged buyout and ended up suffering a crazy amount of debt that they could not manage to get out of while Bed Bath and Beyond has no debt. Bed Bath and Beyond Inc. as founded in 1971 and went public in 1992. The company is counted among the fortune 500 and Forbes 2000. Just from my personal experience Bed Bath always has lots of friendly and informed employees on the selling floor who when asked for the location of an item, will walk you there to make sure you find it.
Just finding help in Linens n’ Things was a work in its self. Also my first job I ever had was a Bed Bath and beyond and I have nothing but good things to say about the company, the way my managers did business and the way I was treated as an employee.I remember that I was paid a dollar over minimum wage as a sixteen year old kid with no experience they had a good training program, also they had great employee motivation programs for example employee of the month, holiday parties, contest and etc. Bed Bath and Beyond and Linens ‘n Things were started within four years of each other and their corporate headquarters were just a mere 16 miles apart such a small world when you think about it.
Although they have significant similarities in the beginning setting, their performance results separate severely.On the surface, both companies were following a similar business-level strategy of cost leadership, but key strategic decisions led them down very different paths. Both companies focused on providing consumers with high-quality houseware goods in a no-frills, value-priced environment, but Linens n’ Things decision to build centralized warehouses that seemed consistent with a cost leadership strategy ended up bringing it into direct competition with Target and Walmart while as you know is a whole different ball game compared o, Bed Bath and Beyond which allowed for greater decentralization in decision making, which made allowing more store-level decision making and greater customization to local shoppers’ tastes.
As a result, Bed Bath and Beyond was able to better tell itself apart from Walmart and Target. Bed Bath and Beyond’s market capitalization was approximately $10. 7 billion, while there stores where open Linens n’ Things had just been acquired for $1. billion by a private equity firm.
Linens ‘n Things has been losing money for years and finally had difficulty keeping up with payments to its lenders and vendors. Some strategies used by Linens n’ Things was a change to bold clearance sales and product promotions. Management wanted Linens ‘n Things to go back to “every day, low price”(LNT.
com) model it had followed during its earlier years as a public company.It also hoped to improve the quality of its merchandise and to keep shelves stocked in timely fashion but unfortunately they did not have time so save there company, all their employees and stores. The Chicago Tribune says Bed Bath & Beyond is “in outstanding financial health, with strong cash flow to fund the opening of new stores and no long-term debt. Although it has reduced its expansion plans to 50 or fewer new Bed Bath & Beyond stores this fiscal year because of the economy, it is expected to emerge from the recession in dominant fashion. ”