Case study: Laburnum Group
Background: Laburnum Group
Laburnum Group was established as Victorian Farmers’ Cooperative in 1920, now it has grown into one of the largest listed companies of Australia having headquarters in Victoria, Australia. The business model of the company is very diversified covering home improvement, office supplies, chemicals, energy, industrial and safety products and clothing. The company has diversified its business model to earn high returns and provide maximum satisfaction to its shareholders by addressing the requirements and needs of all the stakeholders of the company. All the operations of the diversified business are required to be monitored and controlled provided its scale and scope in the market. The company has to take various decisions related to each segment and operations of the company to formulate an appropriate corporate strategy. So, the business can be operated profitably and meet the expectations of all stakeholders. The effective strategy can be formulated if the management monitors all the operations critically and understand the impact of each operation on the overall business model. The major part of the diversified portfolio of Laburnum Group is constituted of Energy and Clothing. Thus, while formulating the corporate strategy the major consideration is provided to these segments of the company. These two segments are not operating well these days, many inefficiencies and challenges have been recorded by the management of the company. As these segments affect the overall business and returns of the group of business. The company is motivated to re-examine the systems, processes, and strategies of the company acquired for different products.
The investigation and assessment of energy and clothing segment of the company show that the major cause of inefficiencies and challenges faced by the company are in procurement and supply chain management decisions. All the operations and activities performed under these categories will be analyzed by the cross-functional team. These two segments ‘Energy' and ‘Clothing' has a major impact on other business models of Laburnum Group, the shareholders get influenced with the returns of these segments to ensure the safety and returns of their investment. The management has set up a cross-functional team to evaluate and identify measures to improve the situations. The quantitative and qualitative analysis of different facets of the business model will be evaluated to evaluate the causes and impacts of inefficiencies and challenges of these areas. The Energy business model of Laburnum Group is named as ‘Sapphire Energy’ and Clothing segment is named as ‘Auscotton’.
The students are required to study the business operations of Sapphire energy and Auscotton segments of the company. Causes and impact of inefficiencies and challenges of these two segments of the company will be critically evaluated and formulate a report to address the questions of top management of the company to provide better solutions of these issues.