Why sales dry up at Superdry stores?

As an MBA Global Business student in Coventry university London, I am fascinated by the role played by organisational culture in an organisation. In this blog, I will answer the question Can cultures be managed within Superdry? Superdry Plc, a company which has remodeled from an entrepreneurial business to a magnificent multinational business. After a decade, the company faced a downfall due its flaw in the organisational culture. I will use the frameworks and models to support my stand that how the change in culture will have a positive impact on company’s performance. I hope to suggest a change in culture to boost more sales in their stores because the current culture does not work anymore.

What is organisational culture?

Organisational culture is the assemblage of traditional beliefs, policies, attitudes and values that compose an extensive context for the work done in an organisation. And to know if the way of work done is accepted or not accepted. “The culture of an organisation is also usually related to the personality of an individual” (Laurie J.Mullins, 2016, p.538), Culture helps to guide the employees to decide and behave positively. I prefer culture because it is the key ingredient for the success in an organisation. Group parameters (e.g. language, concepts, boundaries, ideology) and by normative criteria that provide the basis for allocating status, power, authority, rewards, punishment, friendship and respect (Schein, 1991) can define and circumscribe organisational culture. Culture determines what a group pays attention to and monitors in the external environment and how it responds to this environment. Therefore, as Bate (1994) notes, for those who take an anthropological stance, organisational culture and organisational strategy are inevitably linked and interdependent.

“A web without a spider has no strength”

Why is organisational culture important?

Organisational culture is an important asset for any organisation because it influences the performance. An organisation will perform effectively if it has a strong culture. According to Reigle culture matters in innovation, job satisfaction, organisational success, technology implementation,, team performance and mergers. Culture is what stands behind and guide behaviour rather than the behaviour as such (Bate 1994; Geertz 1973).

In 2003, Julian Dunkerton joined hands with James Holder to set up Superdry Plc. Since then the company grew its presence and popularity both inside UK and overseas. Superdry produces premium branded apparel to the global marketplace. They sustain in business by being responsive to the market trends and demands. Combination of market-leading quality and design delivered at an affordable price is core to the brand DNA. Superdry is a genuine British success story.

Partnering with regional retailers to globalise

Superdry leads by signing distribution agreement with various mega retailer of luxury brands across the world. These retailers are strong in their regional trade. Hence this is the most important strategy for Superdry to globalise their brand and sell its products efficiently. For example, Superdry partnering with Reliance retail brands in India and Demsa in turkey. And in the southeast Asia with F J Benjamin, a company which holds an impeccable track record in building brands in Asia. (SuperGroup PLC, 22 July 2013). Supergroup signs a franchise agreement with Al Khayyat Investment in UAE to roll out 13 stores. (SuperGroup PLC, 14 June 2010).This strategy helped the brand to stand out from their competitors. Superdry has a wide range of products and is the most capable in the world to enter any market place.

Their products have a casual look with a sporty twist, Superdry is blending the classic American style with innovative Japanese cool to make their apparels stand out. Be it with a bold polo shirt, or finish jeans and jacket combo with the fabulous graphics of a printed Superdry T-shirt.

Best-selling products of Superdry: Jackets, Coats, Hoodies and Sweatshirts.

‘We create the clothes…You create the stories’.

Superdry

Handy’s framework

Superdry adopts Power Culture, where all the strategic decisions is taken by the members of the board. This type of culture will exhibit dominance by a small group of individuals. There is less bureaucracy and rules in a Power culture. One of the advantage of Power Culture is that decisions taken at a faster pace.

Julian Dunkerton remains Superdry’s largest shareholder, with an 18.4% stake, whereas co-founder, Holder, who resigned from the business in 2016, only has 9.7% in comparison. Superdry has paid a heavy price for not looking for a change in its culture. The board has many misunderstandings with Dunkerton over strategy. According the board Dunkerton is not a good fit within the open minded collaborative culture.(Annie May Noonan,2019)

The Organisational Iceberg model

The above iceberg model displays some aspects on the top while there are also some aspects which are bottom and hidden. As most of the iceberg lies below the surface of water, it’s important that we don’t miss any covert aspects of an organisation when changing the culture. We all know what happened to the ship which ignored the iceberg.

Coming back to Superdry, a company that has strong values and high commercial success faced a downfall when Mr.Dunkerton stepped down, citing other demands at that time. Ever since the CEO stepped down, the sales at Superdry stores were pretty dry. Misguided strategy, fall in Sales, fall in Shares, Profit warnings were the consequences when the company is not paying attention to its organisational culture and values. On adopting Power culture, the company failed miserably because of boardroom fights, which not only affected the sales but also created a disruption in the organisational culture.I strongly suggest the transition of culture from Power culture to Role culture will help Superdry gain back its momentum in the marketplace.

“Problems cannot be solved with the same mindset that created them” -Albert Einstein

McKinsey’s 7S framework

Strategy:-

Superdry 5.0 is their strategy to become a global digital brand with iconic products and category ownership, to have a relentless innovation up to 5000 designs per annum, World market opportunity by expanding the digital reach to 148 countries, Operational excellence through best breed of IT.

Structure:-

Superdry’s structure completely relies on the board of members. It consists of 17 main executives. All the major policy and strategic decisions are the responsibilities of executive committee.

Systems:-

Superdry sells premium branded apparels at affordable prices. Its products have impeccable quality with best finishing. Sustainability is their one of the brand values they do it by protecting our planet by using resources sustainably.Supedry’s brand positioning is centered on producing finest clothing. Now they added lifestyle categories such as Sport and Snow to the existing range.

Style:-

Superdry’s CEO Mr.Julian Dunkerton leadership style is Autocratic style. ‘Do as I say’ is a proper phrase to define Autocratic style. By following this style, he damaged the organisational culture by having many misunderstandings and boardroom battles.

Shared values:

Sharing work attitude and principles leads to stronger social connections at work. Superdry employees experience this fellowship and stay loyal to the company.

Staff:-

Having a diverse employees population of 4650 across 16 different countries. Superdry’s employees are connected in online network irrespective of their location so they feel part of the Superdry family.

Skills:-

Superdry hires people who are compatible to their cultural fit. They equipped with excellent communication skills and customer service skills.

Conclusion:

Strong organisational culture is required for an organisation to be a success. Adopting the right culture is the most significant step to a leader. Choosing an incorrect culture will affect the whole organisation by hindering its growth. In Superdry, cultures can be managed by adopting Role culture. Because this culture is seen as a Greek Temple and it works by leaders and employees being rational and logical. Role culture is truly considerable along the lines of making people work jointly so that together the strength will grow and so will the organisation.

References:

Laurie J. Mullins. (2016), Management and Organisational Behavior (11th edition). Pearson.

Superdry careers. Culture & Values. https://careers.superdry.com/about-us/culture-and-values#

Alvesson, M. and Sveningsson, S. (2008). Changing Organizational Culture: Cultural change work in progress. London: Routledge.

Superdry. [Product images] Superdry Plc. https://www.superdry.com/

Torben Rick. (2015). [Image of iceberg] Meliorate.  https://www.torbenrick.eu/blog/change-management/iceberg-that-sinks-organizational-change/

Kishau Rogers. (2017) The Iceberg model for Problem solving. https://bigthinking.io/the-iceberg-model-for-problem-solving/

Batuhan Kocaoglu. (2019) McKinseys 7S Framework [Image oh McKinseys 7S model] https://www.researchgate.net/figure/McKinseys-7S-Hard-and-Soft-Strategies-Ravanfar-Analyzing-Organizational-Structure_fig1_334901504

Annie May Noonan. (2019) What happens when a founder can’t le go? https://realbusiness.co.uk/julian-dunkerton-superdry-what-entrepreneurs-can-learn/

Organisational Behavior Notes. Oragnisational behavior https://www.myorganisationalbehaviour.com/role-culture/

Jasper Jolly. (2018, 22 December) Co-founder takes swipe at Superdry business model. https://www.theguardian.com/business/2018/dec/10/co-founder-takes-a-swipe-at-superdry-business-model-julian-dunkerton

BBC. (2019 12 March) What went wrong with Superdry?   https://www.bbc.co.uk/news/business-47524589

McCalman, J. and Potter, D. (2015). Leading Cultural Change: the theory and practice of successful organizational transformation. London: Kogan Page.

Essays, UK. (November 2018). Organisational Culture. Retrieved from https://businessteacher.org/lectures/hrm/cultural-management/lecture.php?vref=1

Superdry careers. (2017, 23 May) Night is on [Video] YouTube https://youtu.be/TgSNmymk2oc

Published by Vimal Raj

I am an MBA student in Coventry University London.

20 thoughts on “Why sales dry up at Superdry stores?

  1. Wow…it’s written very well..

    What I am confused after going through the post is that which culture should I choose if I am going to launch my own start-up.

    Liked by 1 person

    1. Thanks for your comment. For Startups, Power culture will be the most suitable culture. It is concentrated among few people it will also enable faster decision makings. This culture heavily depends on you, You influence others to get the jobs done. But I would strongly suggest that you change the culture once your company grows, as one person cannot expand much.

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    1. Hi Shipa, Thanks for commenting. Since organizational culture is partly shaped by the national culture (see House et al., 2004), innovative organizational cultures are likely to be high in societies characterized by certain values such low UA and high intellectual autonomy

      Like

  2. Hello vimal,

    I read your blog, it’s very impressive and you described it well. Am also a fan of superdry company and I purchased a lot from them. They provide the best quality. I loved it.. And I have a question What is the main reason for Superdry’s loss?

    Liked by 1 person

    1. Thanks for your comment. Misguided strategy and weak culture are the major reasons for the Superdry’s downfall. Moreover, there was a boardroom battle between Julian Dunkerton and the board members. He wanted the company to focus on best-selling products like Jackets and Hoodies and offer more variations on the website. Retailers on the other hand reduced the stocks both in stores and online. This created a huge misunderstanding and finally when Mr.Dunkerton stepped down, the company’s shares fell over 70% in that year.
      https://www.bbc.co.uk/news/business-47524589

      Like

    1. Superdry is a British success story, It is one of few brands to be expand drastically in the global market at a short time. By selecting this company, it would enable my viewers to understand why the selection of right culture is crucial for a business.

      Like

  3. I am a Business student, I find your blog very useful to understand the Organisational culture. Is innovation a part or related to Organisational culture?

    Liked by 1 person

    1. Thanks for the comment.
      The relationship of organizational culture and innovation has been subject to extensive research over the last decades. The multitude of cultural variables under investigation has led to a fragmented concept of culture for innovation, and an inclusion into management theory is still missing. Further, managerial practice requires an underlying structure in order to decide what culture should be implemented in order to foster innovation, and to assess if a specific culture is an effective and efficient coordination instrument
      Abdullah, N. H., Shamsuddin, A., Wahab, E., & Hamid, N. A. A. (2014). The relationship between organizational culture and product innovativeness. Procedia-Social and Behavioral Sciences, 129, 140-147.
      Deshpandé, R., & Farley, J. U. (2004). Organizational culture, market orientation, innovativeness, and firm performance: an international research odyssey. International Journal of Research in Marketing, 21(1), 3-22.

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  4. you used “McKinsey’s 7S framework” to analyse the organizational culture. I think it’s useful and to make easy understand. Handy’s framework and iceberg also are emerged in your blog, that method I also used it in my blog.
    I feel comfortable to read your blog , because I learned knowledge and the logical from it.

    Liked by 1 person

    1. Thank you, Jeevansong. I strongly suggest the McKinsey’s 7s framework and Ice berg model to the companies which need a change in organisational culture or to achieve organisational success.

      Like

    1. Hi Vinisha , I can give you 5 reasons to support the importance of culture in an organisation.

      1) It defines your organisation’s internal and external identity.
      Here’s a thought exercise: write down on a piece of paper five attributes that best describe your organization’s culture. You might write something like “good work-life balance” or “lots of meetings” or maybe “team-oriented.”

      Now, spend a few minutes thinking about why each of those attributes is important to your organization in particular. Why is it significant that your company has a good work-life balance? What makes these culture attributes valuable to your people and customers?

      Peter Ashworth explains that your organizational culture “defines for you and for all others, how your organization does business, how your organization interacts with one another and how the team interacts with the outside world, specifically your customers, employees, partners, suppliers, media and all other stakeholders.”

      In other words, your organizational culture will reverberate across all aspects of your business because it represents the way you do business. It’s simultaneously your identity and your image, which means it determines how your people and customers perceive you.

      2) Culture is all about living your organisation’s core values.
      Your culture can be a reflection (or a betrayal) of your company’s core values. The ways in which you conduct business, manage workflow, interact as a team, and treat your customers all add up to an experience that should represent who you are as an organization and how you believe a company should be run. In short, your culture is the sum of your company’s beliefs in action.

      But if your espoused values don’t match your culture, that’s a problem. It could mean that your “core values” are a list of meaningless buzzwords, and your people know it.

      A strong organizational culture keeps your company’s core values front and center in all aspects of its day-to-day operations and organizational structure. The value of doing so is incalculable.

      3) Your culture can transform employees to advocates (or critics)
      One of the greatest advantages of a strong organizational culture is that it has the power to turn employees into advocates.

      Your people want more than a steady paycheck and good benefits; they want to feel like what they do matters. And when your people feel like they matter, they’re more likely to become culture advocates—that is, people who not only contribute to your organization’s culture, but also promote it and live it internally and externally.

      How do you achieve this? One way is to recognize good work. A culture that celebrates individual and team successes, that gives credit when credit is due, is a culture that offers a sense of accomplishment. And that’s one way to turn employees into advocates.

      Then again, if your company culture doesn’t do this, you may be inviting criticism.

      4) A strong organisational culture helps you keep your best people.
      It should come as no surprise that employees who feel like they’re part of a community, rather than a cog in a wheel, are more likely to stay at your company. In fact, that’s what most job applicants are looking for in a company.

      Ask any top performer what keeps them at their company and you’re bound to hear this answer: the people. It’s because a workplace culture focused on people has profound appeal. It helps improve engagement, deliver a unique employee experience, and makes your people feel more connected.

      One way to attract top performers that are natural culture champions is to hire for cultural fit.

      5) A well-functioning culture assists with onboarding
      Organizational culture also has the potential to act as an aligning force at your company. This is particularly the case with new hires who, more often than not, have put some considerable thought into the type of culture they’re entering into.

      The culture at your organization is essentially a guiding force for them, so it’s important that it starts with onboarding.

      Writing in Forbes, George Bradt explains further: “People fail in new jobs because of poor fit, poor delivery or poor adjustment to changes down the road. Assuming you’ve aligned the organization around the need for your new employees and acquired them in the right way, your onboarding program should accommodate their needs (so they can do real work), assimilate them into the organization (so they fit culturally) and accelerate their progress (so they can deliver and adjust).”

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  5. Amazing Blog ☺️, Keep up the great work. What I find interesting in the blog is the company and the way you have applied theories to explain. In which environment Task culture can be adopted?

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    1. Thanks for the comment. A Task culture is suitable in an environment which involves problem solving. Here the power derives from the expertise as long as the team requires expertise. Finally, the individuals have a large degree of control over their work.

      Like

  6. Hello Vimal, I buy Superdry products. They have a wide variety of clothing but less collection in some products. Can a strong organizational culture solve that problem?

    Like

    1. Yes, it can solve their problems
      The organization culture brings all the employees on a common platform. The employees must be treated equally and no one should feel neglected or left out at the workplace. It is essential for the employees to adjust well in the organization culture for them to deliver their level best. Role culture will allow more bureaucracy, which will enable the retailers to manage the stock without any reduction in stock.

      Like

    1. Thanks for commenting. Since organizational culture is partly shaped by the national culture (House et al., 2004), innovative organizational cultures are likely to be high in societies characterized by certain values such low UA and high intellectual autonomy.

      Like

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