Colorado Group Limited Analysis
Colorado Group Limited, a company that existed in Australia for around 150 years, has recently decreased its’ production after going into receivership in the end of March 2011. The company, which used to be a large
After a long period of growth and success, Colorado Group Limited began to loose its’ profits and constantly under-perform over a long period of time, which led to the complex negative consequences described above. The brands owned by Colorado Group Limited were well-known and respected Australian brands with long history, but they still did not manage to maintain stability on the market. The main under-performance is seen in the Colorado brand, while others are more profitable. Among the main problems of Colorado
- Industry issues
The world financial downfall of 2007-08 has left its’ footprint on Colorado Group Limited. Although the company was already an under-achiever, the crisis made an additional “hit” on the company and its’ brands. It is well seen from the fact that Colorado Group Limited was delisted from ASX in 2007 and wasn’t able to return top its’ full strength since. The decreased consumer spending after the crisis has had a significant impact both in Australia and worldwide.
- Organizational issues
The organizational issues are clear from the fact that the company wasn’t able to be an adequate competitor on the market, especially – in the on-line sphere. Therefore, company leadership was not able to foresee the growth of
- Discipline issues
Although at a later stage Colorado Group Limited was headed by Kevin Roberts, the ex-CEO of Adidas, it, in fact, required a strong leader open for change at earlier stages of the company development (Janda, 2011). The lack of leadership that would be open for changes and restructuration was one of the main problems of Colorado Group Limited.
Factor 1: the change in buying behaviors and spending habits
After the global financial crisis of
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Factor 2: the growth of market competition with the focus on on-line shopping
With the limitation of individual spending
Alternative solution 1: turning brands into on-line retails
Instead of closing
Alternative solution 2: re-selling parts of the brands to foreign partners
The company could involve foreign investments, or even introduce foreign partners to the business. Loosing popularity on the domestic market, Colorado Group Limited brands could enter their markets of neighboring countries, such as the states of South-East Asia (Poulsen & Hufbauer, 2011).
It is recommended that Colorado Group Limited strongly enter
Rationale & Justifications
It is clear that the global financial downfall, which has not only shaken the positions of many
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- Colorado Group Ltd. (2014). Ferrier Hodgson. Available at http://www.ferrierhodgson.com/au/publications/specialisation-case-studies/retail/colorado-group
- Colorado shuts the doors on 1042 jobs. (2011). Herald Sun. Available at http://www.heraldsun.com.au/news/breaking-news/plus-jobs-to-go-in-colorado-closures/story-e6frf7ko-1226075162418?nk=f6b0b44ee23984afe4f1ebd9b5744ff1
- Fusion rises from the ashes. (2014). Financial Review. Available at http://www.afr.com/p/business/companies/fusion_rises_from_the_ashes_1E3qSZjCBm3tJX2V7EorsL
- Hampson, D. P., & McGoldrick, P. J. (2013). A typology of adaptive shopping patterns in recession. Journal of Business Research, 66(7), 831-838.
- Janda, M. (2011). Colorado Group for sale. Available at http://www.abc.net.au/news/2011-04-05/colorado-group-for-sale/2627008
- Kadlec, D. (2013).Scared to Prepared: How the Great Recession Changed Our Spending Habits. Time. Available at http://business.time.com/2013/04/03/scared-to-prepared-how-the-great-recession-changed-our-spending-habits/
- Mulpuru, S. (2013). US Online Retail Sales To Reach $370B By 2017; €191B in Europe. Available at http://www.forbes.com/sites/forrester/2013/03/14/us-online-retail-sales-to-reach-370b-by-2017-e191b-in-europe/
- Poulsen, L. S., & Hufbauer, G. C. (2011). Foreign direct investment in times of crisis. Transnational Corporations, 20(1), 19-38.
- Schonfeld, E. (2010). Forrester forecast: Online retail sales will grow to $250 billion by 2014. Available at http://techcrunch. com/2010/03/08/forrester-forecast-onlineretail-sales-will-grow-to-250-billion-by-2014
- Walter, F. E., Battiston, S., Yildirim, M., & Schweitzer, F. (2012). Moving recommender systems from on-line commerce to retail stores. Information Systems and e-Business Management, 10(3), 367-393.
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