Page 120 - Crisis Communication Practical PR Strategies

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Reorganization and Restructuring 101
company; 80–90 per cent of the people being dismissed did not
have any qualifications. An estimated 15 per cent were non-
Dutch.
The departments that did remain in The Netherlands were
customer relations, finance and control, marketing departments
and management (about 55 people). The aim of the firm was to
reorganize the distribution in such a way that the customers
would not notice any change or disruption.
Reasons and risks
The Dutch division of the company had produced good results
over the past years. It was not a question of bringing the opera-
tion into profitability but more an issue of logistics profitability at
a European level. In a stagnating European context, big groups
have to restructure to maintain and improve their competitive-
ness. The distribution centre had to be moved to Germany
because the Dutch plant was not large enough to absorb the
German activity; the German site was chosen to absorb the
Dutch activities.
Within the company there had been a long-term market
decline for The Netherlands operation. Many players were
picking up in the market in 2005. In The Netherlands the firm
and its brand were losing market share because the brand
seemed to be a little old-fashioned for Dutch consumers. To
make the brand more appealing, there had to be investment in
the internet and a drive to improve awareness and attractiveness.
The reorganization happened in parallel with another devel-
opment within the firm, namely the closing of several shops in
The Netherlands. Eventually the plan was to keep only seven to
eight shops – out of 23 in total – in the large cities in The
Netherlands. The reason for closing the other shops was the
fierce competition and rising costs. Shop density is much higher
in The Netherlands than in the surrounding countries, leading to
scarcity and rising rents, especially in the most preferred loca-
tions. In 2005 the company had experienced varying fortunes
with its shops, in particular some of them encountered very diffi-
cult trading. In December 2005, franchisees had been informed
about these developments and were offered the chance to termi-
nate their contracts.
Another market development was that many other companies
were reorganizing their activities in 2006. Beiersdorf in The
Netherlands dismissed 170 out of 240 employees. At NedCar