Posted: April 24th, 2022

Full Report essay

INTRODUCTION
Background of the issue
This paper is about a study on change management of Padini Holdings Berhad (Padini, n.d.). Change management is defined as an organisation’s methods and procedures for defining and implementing change in both internal and external operations (American Society for Quality, n.d.). In this paper, we will discuss the internal and external factors that contribute to the change management of Padini, and the action taken by Padini to respond to the changes, as well as the impact towards Padini’s performance. The reason of this study was conducted using Padini Holdings Berhad as a base company is, despite of being local brand, Padini Holdings Berhad has successfully entered many countries around the world, and this shows that its products quality is comparable to international brands. We have prepared the comprehensive background of Padini in the next subsection to make sure we gain a complete understanding of the nature of Padini.

Background of the company
History
Padini Holdings Berhad is a Malaysian listed company based in Shah Alam’s Hicom Glenmarie Industrial Park. Padini began as a small business of women apparel and wholesaling in 1971. Under the name of Hwayo Garments Manufacturers Company, they manufactured, trade, and provide garments to shops and wholesalers, servicing Malaysian department stores. Thereafter, they believed that the future of the world of fashion necessitated the creation of their very own brand. Shortly, in 1975, the Padini brand was launched, and they began to branch out into the retailing industry by creating their own brands that targeted to certain customer segments, all driven by its vision (Padini, n.d.).

Padini Holdings Berhad was successfully transformed to a public company limited by shares in 1995 and was quickly placed on the Second Board of the then Kuala Lumpur Stock Exchange. Padini Holdings Berhad was promoted to the Main Board of KLCI Bursa Malaysia in 2005 (Wikipedia, 2021).

Padini’s nine diverse brands, Padini, Seed, Padini Authentics, PDI, P&Co, Vincci, Vincci Accessories, Tizio, Miki Kids, and Brands Outlet, cater to fashion-conscious consumers of all genders and ages. Every one of those brands has its own unique philosophy and offers a wide selection of offerings that cater to its target demographic.

In Malaysia’s multibillion-dollar textiles and apparel business, Padini Holdings Berhad is now a leading company. In Malaysia and around the world, their family brands are distributed in 330 standalone retail, franchised outlets, and consignment booths. Their brand names prominently carry the “Made in Malaysia” mark in Bahrain, Brunei, Cambodia, Egypt, Indonesia, Kuwait, Morocco, Myanmar, Oman, Pakistan, Philippines, Qatar, Saudi Arabia, Syria, Thailand, and the United Arab Emirates (Padini, n.d.). Their brands are also accessible online at Padini.com, their e-commerce portal, and Padini mobile app that was launched recently.

Milestone
Below are the milestones of Padini Holdings Berhad after being listed on the Second Board of Bursa Malaysia:

Figure 1 Timeline of Padini’s milestones

Mission
Padini Holdings Berhad’s mission, “to exceed customers’ expectations and our brands’ promise,” is meant to produce reputable products which not only satisfy yet significantly exceed their intended consumers’ expectations.

Figure 2 Padini’s mission

Vision
Padini Holdings Berhad’s vision is “to be the best fashion company ever”. Its means, They will achieve their goal via hard work, determination, and creativity. In the long run, they will keep extremely outstanding style and production standards, along with their cost-effectiveness. They’re also trying to broaden the company on a global level. They are currently expanding their footprint in their bordering countries, and it is anticipated that there is substantial potential for growth.

Figure 3 Padini’s vision

Value
The value of “PADINI caring from the heart” indicates that each of the member of the Padini’s team must serve consumers with love and kindness; employees must care for their customers by giving the best services possible.

Figure 4 Padini’s core value

Board of Directors
As shown in figure 5 below, Padini’s Board of Directors currently has 10 members, with four Independent Non-Executive Directors and six Non-Independent Executive Directors. As stated in Malaysian Code on Corporate Governance (MCCG), code 5.2, for large companies, the independent directors should be the majority of the board (Securities Commision of Malaysia, 2021). The current Padini’s Board of Directors did not comply with MCCG as the number of four out of ten directors are considered as minority. However, in the Listing Requirements, a listed company only required to comprise minimum 2 directors or 1/3 of directors (whichever is higher) as independent directors (Bursa Malaysia, 2015). Which means, it only requires Padini to have at least 3 independent directors. As Padini has 4 independent directors, therefore, it complies with the Listing Requirements. Padini reported that the adoption of MCCG 2021 will be reported in the next financial year.

Padini considers the benefits of having several elements of diversity, such as gender, professional background, talents, and experience for its Board. Padini now has four female members on the Board, representing more than 33% of the total Board Members, in line with the Government’s goal of having at least 30% women representation in decision-making positions of Malaysian public companies. The figure below shows the list of Padini’s Board of Directors.

Figure 5 list of Padini’s Board of Directors

Products
Padini sells clothing for men and women, children, maternity wear, babies, accessories, shoes, bags, and purses. The figure below shows the products offered by Padini’s family brands.

Figure 6 Padini’s products offered by brands

Internal and external environment analysis of the company – SWOT Analysis
As change management involves in both internal and external operations, SWOT analysis will be the best method in Helping the study of change management. SWOT analysis is a remarkable technique to analyse the environmental factors associated with a company. SWOT analysis examines internal (strengths and weakness) and external (opportunities and threats) environment of the company.

Strengths
1. Malaysia’s most well-known brand

Padini is a well-recognized name in Malaysia. Padini’s brands come in a variety of designs and price points. By having high and low-price points, it can be concluded that Padini are targeting both high- and lower-income customers. This is a wise strategy of Padini to widen their target market, and this, in turn, make Padini’s brands become more well-known among various demographics of customers. Padini, for instance, provides brands like Tizio, P&Co, Miki Kids (Padini, n.d.), and others that are both stylish and modest, make them ideal for a broad selection of customers.

2. Wide range of product segmentation

Padini not only offers women clothing, but also clothing for men, children, maternity wear, and babies (Wikipedia, 2021). Padini’s also ensures that their products suited for all ages of consumers and can be use on any occasions. It means they are not limiting their product range for example, only for women clothing. This will give the customers a numerous option to choose, while attracting customers from various type of demographic.

3. Numerous retail outlets

In Malaysia and around the world, Padini’s family brands are distributed in 330 standalone retail, franchised outlets, and consignment booths (Padini, n.d.). Customers in different places can have access to its physical store and Padini brands spread together with the increasing number of Padini retail outlets. This ensures that Padini are completely dominant for their competition by having a large number of outlets.

4. High-quality products.

Generally, consumers always seek for high-quality product despite the price. To make sure they are in line with their mission, Padini strictly guarantees that their products quality is always become their main concern. That is why Padini’s product always guaranteed to be a high-quality product. So, they can provide the product which exceed their consumers expectations is accomplished. Therefore, high-quality product’s of Padini become one of their strength.

Weaknesses
1. Lack of digital operational expertise

Since Padini slowly started to involve in digital retailing, the demand for digital expertise grows significantly within Padini Holdings Berhad. They have put a lot of effort to grow their online channels. As a result, all of the directors have to attend the in-house training program for digital marketing as stated in Padini’s annual report.

2. New to online shopping channels

Based on Padini’s annual report, Padini just launched their own mobile apps in a middle of the year 2021. Since they are new in online shopping channels, they lack experience in handling the online shopping platform.

Opportunities
1. Internet facilities improvement by the government

The Ministry of Communications and Multimedia announce that the government is striving to improve internet connection across the country so that everyone can take advantage of e-commerce opportunities (Haziqah, 2021). So, this is an opportunity for Padini to grow their online business as the potential customers will be increased by the improvement of internet connection.

2. Consumers relied more on online channels to purchase during pandemic

Due to the pandemic, many customers rely on online stores to shop and Padini already launched their own mobile apps in a middle of the year 2021. Because of that they are able to grow, and it also showed that the business was able to reach a new geographical area via the digital retail platform.

Threats
1. Duplicate products with lower prices but low quality can be found easily

Customers are always seeking for a cheaper product. With the evolving in technology, the customer can easily get the cheapest product from overseas, such as China, through the various online shopping platform.

2. Customers are hesitant to go to physical stores due to the Covid-19 situation

Some of the customers want to have more cautious about their health so they were hesitant to go to a physical store to shopping. This will make the physical store of Padini not going well especially in terms of their profits. Padini still need to pay all the costs incurred to open the physical store, but if the store was not going well, Padini could possibly face losses.

3. Low purchasing power among the customers

Most of Malaysian citizen loss their jobs and some were reduced their salary due to the pandemic as the employment rate increased. Not everyone may be able to buy from Padini as the purchasing power is still low. It may take some time until people are stable enough to start buying again.

SWOT Matrix
Table 2 SWOT analysis of Padini Holdings Berhad

Strengths

Weaknesses

· Malaysia’s most well-known brand

· Wide range of product segmentation

· Numerous retail outlets

· High quality products

· Lack of digital operational expertise

· New to online shopping channels

Opportunities

Threats

· Internet facilities improvement by government

· Consumers relied more on online channels to purchase during pandemic

· Duplicate products with lower prices but low quality can be found easily

· Customers are hesitant to go to physical stores due to the Covid-19 situation

· Low purchasing power among the customers

Brief contents of the report
This paper contains eight main sections. The first section is introduction which covers background of the issue and background of Padini Holdings Berhad. The second section covers the background of the change which explains the detail changes that occurred in Padini Holdings Berhad. Next, the objective of the study has been covered in the third section in this paper. Whereas the fourth section is about the brief literature review which review the definitions of change management, change management model, and impact of change management. Moreover, the fifth section is methodology which explain the method in gaining the data and the background of the company. Next, the discussion on the data and results of the study is covered in the sixth section, which is findings and discussion. The seventh section covers recommendation related to findings and future research. The last section is conclusion that conclude the overall results of the study. Finally, the purpose of this study is to fulfil the BKAM3073 requirement.

BACKGROUND OF THE CHANGE
To begin with, Padini Holdings Berhad is one of the biggest fashions and clothes company in Malaysia. Padini Holdings Berhad has been at the forefront of the market for decades. The business was founded in 1971 by Yong Pang Chaun, who started as a mere textile merchant in Singapore. After returning to Malaysia, he starts to set up Padini’s first subsidiary. But even Padini originated in Malaysia, most of sales and production are likely relied on and being made in China, since it is the biggest retailer country. Padini Holding Berhad has been gone through many kinds of internal and external changes since then. The organization has to use change management tactics to withstand certain incidents. There are 2 factors that lead changes of management in Padini Holdings Berhad which is external environment and internal changes.

External Environment Assessment
The first point that might relate to the external environment Assessment was competitors. Padini started by operating in its own home country. The domestic company had been forced to reach a stage by local competition and competition by global competitors. As for Padini’s market in China, there are two main competitors that might be a threat for Padini, which is Peacebird from China and Uniqlo from Japan. Peacebird is also branded company that manufactures similar categories of fashion and clothing product (Peacebird, 2020). Uniqlo is very good in employing geographical marketing strategy very well. For example, they offer different size ranges in Asia and America (Uniqlo, 2020). That is why Padini needs to collaborate with the local Chinese manufacturers and designers to come out with clothing design and innovation that are deemed to be trendy and help to overshadow Padini’s other competitors. Competitors is clearly one of the external environment that affect Padini’s changes, since they do need to find ways in beating other competitors.

Moreover, since Padini has been growing a lot since entering China’s market, Padini could not avoid the changes in term of culture. China is the world most populous country, with a large number of 1.42 billion population and they really do appreciate their ‘mother tongue’ since many of them could not talk in any language other than Chinese language. As a result, Padini must consider using Chinese as their primary communication language. For better understanding, labelling concern is properly translated instruction on every product (S. Mueller and G. Szolnoki, 2010). In China, care must be employed in meeting the local labelling requirement and printed in mandarin language for better understanding and to attract them in looking for those instructions in language that they familiar with. Also, Chinese people do believe that red colour is associated with good luck. This kind of culture is quite important for Padini to change and adapt to it, in order to gain more potential customer in China.

Other than culture, the climate also one of the reason for Padini to make a huge changes that need to be done since China is a four seasons country which is obviously different from Malaysia which has only sunny and rainy season. The trendy clothes that might be huge sales in Malaysia might not be suitable for China’s seasonal environment. Padini need to make changes and modification to fill the different needs of China’s people such as by selling a fashionable winter clothes (M. W. Peng, 2012).

Another external forces that made Padini Holdings Berhad make changes to their products was on the lower material cost and lower labour cost that can be achieve in China (N. Resnick, 2020). Padini can locally produce all its clothing products as it provides opportunities to hire those inexpensive labour and lower raw material prices but still with a good quality materials. Since China is biggest retailer country, it is easier for Padini to find any suppliers that able to provide quality materials with low prices. This clearly shows that lower material and labour cost is one of the external forces that might influence the changes being made by Padini.

Lastly, the next point that might relate to the external environment Assessment is on the US-China trade war. Padini may benefit from the trade war between United States and China because 60 to 80 percent of its products are imported from China, but the financial impact is unlikely to be large. Overall, according to AllianceDBS Research, the ringgit has gained strength versus the yuan as the trade battle between US and China escalated. Padini could negotiate the pricing and would enjoy a prolonged rally against the yuan, the financial impact will depend on the negotiation power of the group itself.

Internal Changes
One of the most recent internal improvement that being made by Padini Holdings Berhad is on the communication strategy, which will help company to communicate better with customers. Padini promotes items using internet platforms, sales promotions and public relations. By doing that, Padini will be able to effectively cultivate client connections as well as in engaging new targeted customers. Padini also uses digital marketing platforms as a major component for companies looking to reach the China market. It will helps to boost their brand, connect with customers and enhance business performance. Padini can use famous social media platform that usually being used by China’s people such as ‘WeChat’ and ‘Douyin’ and also e-commerce platform by creating company’s personal website mainly to promote Padini’s product (M. Wade and J. Shan, 2017).

Besides that, channel choices also internal changed by Padini Holding Berhad to ensure a better business-to-customer sales. It is best for Padini to focus on physical stores and online-selling platforms as its channels of distribution when entering China. When doing so, Padini should be able to choose a suitable location full of potential customers. Also, Padini can create its own website to communicate with customers and conduct sales operations directly. As a result, Padini will be able to contact customers in different regions who live far away from their physical stores. According to statistics, this group of consumers have a high tendency and preference for shopping at shopping malls (Y. Zhang, C. Sirion and H. Combs, 2011). This shows that channel choices is one of the internal forces that affect the changes made by Padini.

Also, Padini Holdings Berhad has internally change the product concept. This is to ensure that customers could differentiate Padini’s product from any other competitors’ product. Buyers will prefer products with superior performance, quality, and features over any other standard products (D.N.P. Murthy, 2006). Padini falls into the category of shopping products, which sells clothes, shoes, bags and accessories. For a product to be well-to-do under this concept, Padini should stand apart from numerous competitors. Hence, Padini’s product concept marketing strategy should not only keep up with shifting trends, but also adapt to and suit the needs of its customers (S. Surendran, 2020). This can be accomplished by putting in place a system to track China’s shopping habits. Product concept is clearly one of the internal forces that might affect the changes that being made by Padini Holdings Berhad.

Other than that, product pricing also one of the internal forced that affect changes made by Padini Holdings Berhad. Padini is implementing low pricing techniques and focusing on middle-class customers in China because of the high consumption rate of middle-class customers (P.G. Walters and S.Samiee, 2003). Padini uses international pricing techniques because of the pricing decision were vary by country. First is the geocentric pricing, where Padini can set prices in order to maximize profits in each of the national markets. Second is adaptation pricing, where it allows businesses to price their product diversely in numerous countries in order to satisfy local conditions. Next is penetration pricing, which is the fastest way to gain market share by setting a low price to attract customers to purchase from them. Padini will be able to accomplish high sales volume utilising this method since they will be aware of their economies of scale and low marginal cost. Padini need to choose and make decision internally on ways that can be used in choosing the product pricing, this shows that product pricing is also affecting changes made by Padini.

OBJECTIVE OF THE STUDY
The main objective of this project is to observe the change management in the Padini Holdings Berhad. Specifically, the objectives of this project are as follows:

1. To determine what are the factors that influence the changes in Padini Holdings Berhad.

2. To examine how Padini Holdings Berhad responds toward the changes.

3. To discuss the impact of changes towards the performance of Padini Holdings Berhad.

LITERATURE REVIEW
CHANGES IN MANAGEMENT
A systematic technique to dealing with the transition or transformation of an organization’s goals, strategies, or technologies is known as change management. Change management strives to put in place methods for bringing about change, controlling change, and Helping people in adjusting to it. A methodical strategy for seeking a change, as well as tools for responding to and following up on requests, are examples of such approaches.

To be effective, the change management process must analyze how a change or replacement will affect the organization’s processes, systems, and workers. There must be a mechanism in place for planning and testing change, communicating change, scheduling and implementing change, documenting change, and assessing its repercussions. Documentation is an essential component of change management, not only for maintaining an audit trail in the event that a rollback is required, but also for ensuring compliance with internal and external controls, including regulatory compliance.

Four principles underpin change management. Understanding the concept of change is the first principle. It implies that before implementing a change, a company must first outline the goals and benefits that will be realized if the new management style is adopted. This concept could help a company understand the risks of not making the change. Change in plans is the second principle. Effective change does not happen by chance, and any strategy developed by a company must be tailored to the company’s needs. Depending on the business, change initiatives can be handled in a number of ways. Some change methods are very rigorous, whereas others are more open and flexible.

The third principle is to implement the adjustments. An organization must ensure that everyone involved in the change is aware of what must occur throughout implementation. Communication regarding change is the last principle. Change management can be a game changer when it comes to communication. Employees must understand what the organization expects of them and why they must comply, thus the desired change must be obvious and relevant. However, the organization must also set the appropriate tone in order to elicit the desired emotional response.

There are various change management models that have been used by an organization in order to implement change management in the company. The model will guide an organization a step to begin with in order to ease their process towards the changes. In this change management study, Padini Holdings Berhad had implemented Kotter’s approach for their change management. Padini Holdings Berhad uses the Kotter 8-step model because it provides an easy-to-follow roadmap for change managers, even if they are new to change. Besides that, each stage outlines precisely what must occur in order to keep a change project on schedule. The 8-step approach of John Kotter focuses on the passion that must be generated, particularly among the firm’s leadership, in order to bring about change. This model is suitable for Padini Holdings Berhad because it will guide the firm for every step that they needed to take in order to make employee change management in their organization.

KOTTER’S APPROACH TO CHANGE MANAGEMENT
John Kotter, a Harvard Business School professor of leadership and change management, revealed his groundbreaking 8-Step Change Model. The model, which is based on Kurt Lewin’s work, lays out the eight main aspects of the change process, suggesting that missing any of them will result in the failure of the entire project (Praveen Gupta, 2011).

This model can be divided into 3 categories which are the first three steps regarding creating the right climate for change. In these steps, an organization should focus on establishing, forming, and creating. The first three phases are crucial because they can help the organization generate initial motivation to get things moving. Companies should know their main objectives to change management. They need to create a clear vision for a change. Hence, it will be easier for companies to take an initial step to implement the changes.

Next, for step 4 up to 6, this step is about establishing a relationship to the organization’s change. During this stage, the organization should work to gain employee support and acceptance. This can only be achieved by sharing the new vision with employees as often as possible and taking their concerns, reservations, and anxieties seriously. The new vision must be fully integrated throughout the organization.

In the final category, steps 7 and 8, the emphasis is on execution and consolidation of the change. During this stage, a company must continue to seek improvements in order to achieve long-term transformation. Only after a number of successes can it be confirmed if the change is paying off. Change, on the other hand, will only become part of the corporate culture after it has been instilled in the organization’s core values.

Many businesses have adopted John Kotter’s 8-step transformation model because it is straightforward and easy to implement. It lays out in detail what should occur at each stage of the change process. The focus of this paradigm is on the employees’ commitment and well-being. Since Padini Holdings Berhad wants to change the employee management, the company has decided to follow Kotter’s approach. This is because the first two parts of John Kotter’s 8-step transformation model are the most powerful characteristics of the model, and they will Help the organization in seamlessly changing employee management. According to the paradigm, the project’s resolution and success are critical. After completing all of Kotter’s 8-Step Change Model steps, John Kotter recommends adopting the new vision as a beginning point for recruiting and hiring new employees. This is equally true for (current) staff training.

MCKINSEY 7-S CHANGE MANAGEMENT MODEL APPROACH TO CHANGE MANAGEMENT
This paradigm was created in the early 1980s by two consultants from McKinsey Consulting, Robert Waterman and Toms Peters. Because this model is a useful tool for measuring and analyzing changes in an organization’s internal condition, it is extensively employed by organizations. Other change management strategies are not constructed in the same way as the McKinsey 7S model of organizational management. It is made up of seven components that must be balanced in order for a business to be healthy and competitive. McKinsey’s change management strategy emphasizes both “hard” and “soft” organizational components that must be taken into account while driving or implementing change. (Mohammad Mehdi Ravanfar, 2015).

It consists of strategy, structure, and systems for the challenging elements. According to McKinsey, strategy and organization are “two sides of the same coin.” It signifies that the strategy is focused on how an organization wants to direct its own organization toward its goals while being flexible. When it comes to a change project, the strategy part in the McKinsey 7S example is the precise plan or change management path a business takes to get from their current condition to their desired future state.

Besides that, In the McKinsey 7S framework example, the structure element relates to the traditional organizational structure or chain of command. These kinds of partnerships are often known as authority relationships. It depicts how the company’s many units and divisions are organized, who reports to whom, and how tasks are divided and integrated. A company’s structure could be hierarchical or flat, centralized, or decentralized, autonomous or outsourced, specialized or integrated, and so on.

The next topic is systems. The physical systems with which the organization’s workforce interacts, as well as the processes and workflows in place, are referred to as systems. These are the primary and secondary activities that the organization performs on a daily basis. Systems include both core processes such as product development and support functions such as human resources and accounting.

Meanwhile, the soft elements have four components: common values, style, staff, and talents. Shared values, also known as superordinate, aims, are the concept’s core component. The collective value system, which is crucial to organizational culture, is comprised of the company’s norms and conventions, attitudes, and values.

Style is the second factor for soft elements. This pertains to the management style of the company’s leadership. It includes their actions, manner, and interactions. Because style is so individual, enhancing people’s managerial styles entails Helping them in becoming more self-aware; this is one of the most difficult components of the McKinsey 7S research to master.

Furthermore, human resources, or staff, are an organization’s most valuable strategic asset. This section addresses the number of employees, recruitment, employee growth, remuneration, and other motivators. To realize economies of scale, a company must ensure that its workforce is well-balanced and diverse. At the start of a transformation endeavor, stakeholder analysis can help a company understand where everyone stands.

Finally, there are skills. The skill set and capabilities of an organization’s human resources are referred to as skills. Employees’ core abilities or talents are intangible, but they are crucial in achieving long-term competitive advantage. A corporation wants to ensure that their staff have the skills necessary to remain competitive. And, if they are working on a change project, a firm must ensure that their personnel are appropriately taught to handle the new way.

METHODOLOGY
A research methodology is a way for gathering all sorts of data and information about a topic. Under this research study, in order to achieve objectives of current study, secondary data is used to gather the information regarding change management at Padini Holdings Berhad. Secondary data sources may be referred to as data that is not originally gathered by the study and help in some way to arrive at a conclusion for the study. The secondary data that are used in this study are:

1. Journal Articles

A journal is a compilation of articles published on a regular basis over the year. Journal articles are produced by specialists and provide up-to-date information and present the latest research. We have done some research on a few journal articles that related to change management. Such information from various literature will help us to better describe the change management at Padini Holdings Berhad.

1. Books

Books are one of the most traditional ways of collecting data. For this research, the main book that we refer to is CIMA (2017). Strategic Management, CIMA Official Study Text, UK: Kaplan Publishing. We use textbooks as our main references to find information on change managements models and the different of each of them.

1. Websites

One of the most popular ways of collecting secondary data is using the internet. There are many sources of relevant data and information available in the websites that can be collected and used. By inserting the keywords of the study, the related documents were easy to find and obtained via online library and academic website and we ensured that the information is valuable, appropriate, and related to the study. Through websites, we have found information related to change management at Padini Holdings Berhad. From the reading and citation of secondary data, our group were able to study change management and the different models.

Findings and Discussion
Factors that influence the changes in Padini Holdings Berhad
Climate
Since China has four climatic seasons, Padini has to make changes in its products based on the customers’ needs and interests during each season. A season is a period of year that is distinguished by distinct climate conditions. There are four seasons in a year in particular countries which are spring, summer, fall, and winter. The change of seasons will affect the customer demand and interest to purchase clothing products. According to studies, brain activity is at its greatest during the summer and, predictably, at its worst during the winter. People tend to spend more money during summer than colder periods of the year. In the fashion industry, designers from throughout the world make clothing for the four major seasons, in a variety of designs and fabrics. Retailers usually shift gears, stocking the stores’ shelves with sweaters and jackets when the season moves into the colder months (M. Taylor, 2020). This clearly indicates that seasonal change or climate has an impact on the clothing production of Padini.

Production cost
Padini Holdings Berhad would be able to achieve lower production costs such as lower material cost and lower labour cost in China (N. Resnick, 2020). Due to that advantage, Paini could provide a higher supply of its clothing products. The quantity of supply that firms are willing and capable to sell at a specific price will increase when the cost of production like raw materials, labour and equipment cost reduces. Businesses with lower costs always have the ability to supply more of their product for the same price compared to those with higher costs (T. Gorman, 2003). Besides, a company’s profits will rise if the company’s production costs are reduced while the prices for the goods or services it produces remain the same. The increase in profits will encourage the firm to generate more output since it will gain more profits when it produces more. Thus, it shows that the increase in supply is influenced by the reduction in production costs.

Relationship with customers
Customer relations is the process by which companies interact with their customers and develop long-term connections with them. A good relationship with customers will allow a company to engage on a much more instinctive level with its customers. The company will be more likely to grasp its target audience’s demands, solve their problems, and build a sense of mutual understanding if it makes a deep connection with them (R. Soni, 2021). The change that has been made by Padini related to this factor is communication strategy, where it uses internet platforms, sales promotion, public relations, and digital marketing platforms to have better communication with its customers. One of the strategies that can also help Padini to enhance its customer relationship is by establishing a customer feedback culture. The benefit is that the company can increase the satisfaction of its customers. Padini can easily measure its customers’ needs and demands by collecting feedback from them on a regular basis. The company can quickly assess their satisfaction with its services, staff, or overall experience with the company. Customer satisfaction levels inevitably rise when customers interact with a brand that values their comments and strives to enhance their experience (J. Cornell, 2021).

Competitors
Padini Holdings Berhad has changed its product concept internally to ensure that Padini’s products can be differentiated by the customers from the product offered by any other competitors. Competitors usually aim to gain market share by reducing costs, increasing efficiency, lowering prices, and innovating by developing new products and services or upgrading on existing ones. To put it another way, competition will likely provide consumers with higher-quality goods and services at cheaper costs. In order to compete with its rivals, Padini has established a competitive advantage by using a differentiation strategy. A differentiation strategy distinguishes a company’s products or services from those of its competitors. This can be accomplished through providing customers with high-quality products or services, or by developing new products or services. If a corporation is effective in differentiating itself, it will be able to set a premium price for its products or services to the customers without lowering the company’s product quality. Thus, it can be said that competitors did influence Padini to make changes of its product concept in order to gain competitive advantage.

Customer demand
Customer demand will influence the pricing strategy used by a company. Meeting inventory and service demands used to be the emphasis of customer demand. However, the customer demand nowadays is where the company has to satisfy and exceed the customers’ expectations which when the customers expect for customer experience and service. The company must make an effort to meet customers’ needs, when and where they desire (S. Hyken, 2016). Therefore, the company needs to use different types of pricing strategy based on the demand of its customers. In order to increase the demand of its customers, Padini Holdings Berhad has made changes in its product pricing where it uses other pricing strategies. In 2012, since the pricing decisions differ by country, Padini applied the international pricing techniques such as geocentric pricing, adaptation pricing, and penetration pricing. Meanwhile, the company changed its pricing strategy where it used low pricing strategies and focused on the middle-class customers in China due to the high consumption rate of middle-class customers.

How Padini Holdings Berhad responds toward the changes
There are various change management models that have been used by an organization in order to implement change management in the company. The model will guide an organization a step to begin with in order to ease their process towards the changes. In this change management study, Padini Holdings Berhad had implemented Kotter’s approach for their change management. Padini Holdings Berhad uses the Kotter 8-step model because it provides an easy-to-follow roadmap for change managers, even if they are new to change. Besides that, each stage outlines precisely what must occur in order to keep a change project on schedule. The 8-step approach of John Kotter focuses on the passion that must be generated, particularly among the firm’s leadership, in order to bring about change. This model is suitable for Padini Holdings Berhad because it will guide the firm for every step that they need to take in order to make employee change management in their organization.

To begin with, Padini Holdings Berhad is one of the world’s famous fashion companies. The company was founded in 1971 by Yong Pang Chaun and has gone through various internal and external changes since then. For Padini Holdings Berhad, change management is really important because it will help the company to continuously improve the business. Market pressures and new competitors that have likely impacted the business have been the primary drivers of change at Padini Holdings Berhad. For example, there are newcomers entering the Fashion industry, and that makes Padini Holdings Berhad a must to compete with them. They have to compete in terms of price, consumer preferences, brands and others. If Padini Holdings Berhad does not take action to compete with all its competitors, it will make the company unable to strive in line with their competitors and this will leave the company behind. However, the worker is the individual closest to the customer. “Good People Make Good Business”. (Padini, n.d.) This statement has become one of the factors that influenced the change of employee management in Padini Holdings Berhad.

Furthermore, Padini Holdings Berhad is aware that the employee will have an impact on the business’s operations because employee performance is aligned with the company’s goals. Employees understand exactly what is expected of them and the outcomes. As employees strive to provide a better experience for their consumers, customer experience is a vital component of their values. As a result, one of the foundations of the company’s growth strategy is to maximize the potential of its employees. They think that in order to realize their vision and achieve their growth objectives, they must rapidly and successfully develop their people, culture, and key organizational strengths. Padini Holdings Berhad company wants to be an irresistible place to work, where employees are heard, valued, supported, and encouraged to reach their greatest potential. One of the ways that has been implemented by Padini Holdings Berhad for this change management is by conducting Employee Engagement Surveys.

Impact of changes towards the performance of Padini Holdings Berhad
Financial Performance
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—-INTRODUCTION

The problem’s history
Padini Holdings Berhad conducted a study on change management in this paper (Padini, n.d.). The processes and procedures used by an organization to define and implement change in both internal and external operations are referred to as change management (American Society for Quality, n.d.). We will explore the internal and external elements that influence Padini’s change management, as well as the actions taken by Padini to adapt to the changes and their impact on Padini’s performance, in this paper. The reason for adopting Padini Holdings Berhad as a basis firm for this study is that, despite being a local brand, Padini Holdings Berhad has successfully invaded numerous nations throughout the world, demonstrating that its products are equivalent in quality.

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