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Organizational Failure and Renewal

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The cosmetic company XX was highly successful and had shown steep growth in the previous 5 years. But in recent times, the new products of the company repeatedly failed to garner customer support and struggled in the market. The various products not only were of low quality but their defective packaging became a critical element for their failure. The faulty lid and the non-working products that failed to deliver made the company a laughing stock in the competitive market. The managerial indifference to the falling market credibility was also an important aspect that contributed towards the company’s downfall.

The company was a high revenue cosmetic company that had a niche Market position. The lack of funds due to the recent downtrend in the world economy and recessive trend might have contributed to low business to some extent. But major factors that were responsible for the failure of new products were the company’s lack of leadership initiatives that failed to anticipate the changing demands of the customers and introduce the corresponding changes within the work culture. The managerial leadership, under the stewardship of an engineering manager who was responsible for new product development, was found to be hugely lacking in various spheres of management.

The manager did not apply his extensive experience in studying the changing requirements of the consumers, while at the same there were no precise guidelines and strategy for new product development. The teamwork lacked a coordinated approach because of a lack of requisite information and communication amongst themselves and with other departments like manufacturing, quality control, marketing, and sales, etc. that were intrinsically linked to the success of the new products. This had created a huge gap in the knowledge about the changing market trends, advancing technology and how it can add value to the products and finally the usefulness of the new product. The consumers had also no prior information about the new products before its launch, so they were not particularly enthusiastic about its use.