Introduction To The Oddbins Commerce Essay


Odd bins are a United Kingdom-based wine and alcohol retail chain, established in 1963 by Ahmed Pochee.  It was also the year Odd bins first opened its doors and the UK's adventures in wine began in earnest. In 1963, entrepreneur Ahmed Pochee starts up a small business delivering bin-ends and oddments of wine to the restaurants and clubs of London's West End. Odd bins introduce Britain to the wines of Portugal and the South of France. The company expands into Scotland, the West Country and the North West with wooden floors and wacky blackboards. Ten years later, in 1973, Nick Baile and Dennis Ing bought the company, but it was not until the early 1980s that the company discovered its distinctive style when Ralph Steadman was asked by then marketing director, Gordon Kerr, to produce 10 drawings similar in style to his illustrations for Fear and Loathing in Las Vegas. Steadman continued working for Odd bins for the next 12 years.. in the eighties Odd bins, opened 100 stores, becoming the first company to bring Australian wine and Ralph Steadman onto the UK high street.

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In the late 1980s, Odd bins experienced financial troubles, due to the levels of debt within the business, and was acquired by US drinks distributor Seagram. During this period, the height of the business, it was largely permitted to develop with autonomy, albeit with incentive to strongly promote the Seagram brands. In the 21st century odd bins started their new millennium as they continued their winning streak where they won the Wine Merchant of the Year again in 2000 and 2001.where they celebrated their trend-setting agenda by rediscovering Greek wine. Odd bins continue to win awards and launches to the nation. The estate expands to almost 300 stores in 2006 through acquisition. Odd bins launch their own brand wine "Odd bins Own" which sells over 1 million bottles in 9 months.

In early 2011 Odd bins closed a third of its branches, taking the number open to under 100, and proposed to enter a Company Voluntary Arrangement Company Voluntary Arrangement In April 2011 Odd bins went into administration, following the breakdown of talks over the Company Voluntary Arrangement after objections from HMRC, which is owed nearly half of the chains' total debt of £20 million On 26 April, Whittalls Wine Merchants, part of Raj Chatha's European Food Brokers (EFB) Group, bought 37 of the shops from the Administrators in a move that saved 200 jobs & acquired the exclusive rights to the name. The remaining 48 shops were closed by the Administrators.

Economic conditions of United Kingdom

The UK, a leading trading power and financial center, is the third largest economy in Europe after Germany and France. The economy of the United Kingdom is the seventh-largest national economy in the world measured by nominal GDP and eighth-largest measured by purchasing power parity (PPP). Over the past two decades, the government has greatly reduced public ownership and contained the growth of social welfare programs. The British economy comprises (in descending order of size) the economies of the countries of England, Scotland, Wales and Northern Ireland.

Britain's economy enjoyed the longest period of expansion on record during which time growth outpaced most of Western Europe. In 2008, however, the global financial crisis hit the economy particularly hard, due to the importance of its financial sector. Sharply declining home prices, high consumer debt, and the global economic slowdown compounded Britain's economic problems, pushing the economy into recession in the latter half of 2008 and prompting the government to implement a number of measures to stimulate the economy and stabilize the financial markets.

The U.K. is ranked 5th out of 43 countries in the Europe region, and its overall score is much higher than the world average. Struggling to emerge from the severe economic slowdown of the past three years, the British economy continues to underperform, with average annual growth of less than 1 percent over the past five years. Restoring the soundness of public finances remains the most critical issue and will require a sustained commitment to downsizing government spending.

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U.K. Gross Domestic Product decreased by 0.7 per cent in the second quarter of 2012. The most significant contribution to this fall came from the construction sector; there was, however, also weakness in both the production and services sectors. Output of the production industries decreased by 1.3 per cent in Q2 2012 compared with Q1 2012, following a decrease of 0.5 per cent between Q4 2011 and Q1 2012.

United Kingdom Industrial Production

Industrial Production in the United Kingdom decreased 1.6 percent in May of 2012. Historically from 1949 until 2012, the United Kingdom Industrial Production averaged 1.6400 Percent GBP reaching an all time high of 22.6000 Percent GBP in February of 1973 and a record low of 12.9000% GBP in February of 2009. Industrial production measures changes in output for the industrial sector of the economy which includes manufacturing, mining, and utilities. Industrial Production is an important indicator for economic forecasting and is often used to measure inflation pressures as high levels of industrial production can lead to sudden changes in prices. This page includes a chart with historical data for the United Kingdom Industrial Production.C:\Documents and Settings\user\Desktop\chart (1).png

United Kingdom Unemployment Rate

The unemployment rate in the United Kingdom was last reported at 8.1 percent from March to May of 2012. Historically, from 1971 until 2012, the United Kingdom Unemployment Rate averaged 7.2500 Percent reaching an all time high of 12.0000 Percent in February of 1984 and a record low of 3.4000 Percent in November of 1973. The unemployment rate can be defined as the number of people actively looking for a job as a percentage of the labor force. This page includes a chart with historical data for the United Kingdom Unemployment Rate.

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U.K. unemployment rate was 8.1 per cent of the economically active population, down 0.2 on the quarter. There were 2.58 million unemployed people, down 65,000 on the quarter. The employment rate for those aged from 16 to 64 was 70.7 per cent, up 0.3 on the quarter. There were 29.35 million people in employment aged 16 and over, up 181,000 on the quarter. The inactivity rate for those aged from 16 to 64 was 22.9 per cent, down 0.2 on the quarter. There were 9.21 million economically inactive people aged from 16 to 64, down 61,000 on the quarter. Total pay (including bonuses) rose by 1.5 per cent on a year earlier, up 0.1 on the three months to April 2012. Regular pay (excluding bonuses) rose by 1.8 per cent on a year earlier, unchanged on the three months to April 2012.

United Kingdom Inflation Rate

The inflation rate in the United Kingdom was recorded at 2.4 percent in June of 2012. Historically, from 1989 until 2012, the United Kingdom Inflation Rate averaged 2.8200 Percent reaching an all time high of 8.5000 Percent in April of 1991 and a record low of 0.5000 Percent in May of 2000. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes a chart with historical data for the United Kingdom Inflation Rate.

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U.K annual inflation stands at 2.4 per cent in June 2012, down from 2.8 per cent in May. This is the third month in a row that the annual rate has fallen. It is now at its lowest since November 2009, when it was 1.9 per cent. The largest downward pressures to the change in CPI annual inflation between May and June came from clothing & footwear, transport and food & non-alcoholic beverages. The largest upward pressure to the change in CPI annual inflation between May and June came from recreation & culture where prices, overall, for audio-visual equipment has risen on the month

Odd bins Business With The Economic Condition In UK

On 4th April 2011 Oddbins Ltd, a UK national wine merchant chain, went into administration owing over £22 million including £8.6 million in tax and excise duty & its business process in UK is under a tremendous pressure where they are expected close down their outlets which are running at a loss. Oddbins stores were enjoyable places to visit, where you could happily browse the shelves, get some advice, and pick up a vinous gem until it all went sour. Sold to French drinks company Castel Group in 2002, the best located Oddbins stores were turned into Castle's Nicolas brand, which sells only French wine. The Oddbins shops that remained were starved of investment, staff became demoralized, and the range of bottles they sold dramatically cut. Very quickly, the reasons for going to Oddbins disappeared. And with the big supermarkets greatly increasing their range and quality of wines - at the same time as opening smaller convenience outlets - Oddbins started to be gunned down. Bought in 2008 by Simon Baile, the son of a previous owner, Oddbins limped on with its number of outlets falling to 85 from 250 at its historic peak. Oddbins avoided going bust like rival First Quench Retailing, the owner of Threshers and Wine Rack, but without sufficient investment to turn around the business, its losses mounted, Until in April of this year when it was forced to go into administration, owing HM Revenue & Customs £8.5m. Oddbins went into administration, and now only 37 of the original 128 stores survive. One of the major downfall what I think is the odd bins company chose to offer significant discounts for buying a dozen bottles or more, while putting a high price on smaller purchases. This was later reduced to a discount on six bottles this policy might have worked if the shops had good car parking facilities along the lines of the Majestic Wine Warehouse model. However, the majority of the Oddbins stores were on the high street with no parking facilities, so few people could take advantage of the discounts. Inevitably customers felt they were paying well over the odds for single bottle purchases. Another major mistake I see is Oddbins failed to embrace the net, leaving the field open to more nimble and switched on operators like Naked Wines. I suspect that Baile just did not understand its potential. Soon after the Baile-Young takeover the Oddbins' the majority of the wines shown on the Oddbins' site were listed as unavailable, which immediately gave the impression, rightly or wrongly, that the company was having problems sourcing stock.

Change management practice

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Change management is a systematic approach to dealing with change, both from the perspective of an organization and on the individual level. A somewhat ambiguous term, change management has at least three different aspects, including: adapting to change, controlling change, and effecting change. A proactive approach to dealing with change is at the core of all three aspects. For an organization, change management means defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities.

Three phases of change

Phase 1 - Preparing for change (Preparation, assessment and strategy development)

Phase 2 - Managing change (Detailed planning and change management implementation)

Phase 3 - Reinforcing change (Data gathering, corrective action and recognition)

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What can happen if the change is effectively managed?

Employees have a solid understanding of why change is happening.

Employees engage in both the solution and the change.

Training is used to build knowledge after employees have made the personal decision to support the change.

Resistance is identified and dealt with early in the process.

Senior leaders demonstrate their own and the organization's commitment to the change.

Communications are segmented and customized for different audiences, answering the questions that they care about.

Momentum is built throughout different areas and levels within the organization.

Changes are less painful to the organization and to the employees.

A coalition of support among senior leaders and managers creates momentum throughout the organization.

Probability of meeting project objectives is increased.

The organization begins to build a history of successful change, creating a better 'backdrop' for the next change initiative.

Why change management in Oddbins?

Change management as a discipline has grown tremendously over the last five years. Successful change management procedures allow a company to move forward with less hesitation, giving mid-sized firms the ability to be more agile, like startups, because they have more confidence that they can absorb changes without disaffecting staff. Since successful change management brings all affected parties onboard and requires them to participate in making changes successful, it helps inter-departmental teambuilding, so that there is buy-in from employees across an organization. Below I will write the changes which should be implemented in odd bins for a competitive advantage and to long last until the recession ends in London

The most important change management practice is to do the employee training & it is the acquisition of knowledge and skills in order for a person to carry out a specific task or job. Training benefits employees in several ways. As we saw the United Kingdom is suffering after the recession the Olympic games which will be held in London will bring more foreigners and guests to London so training employees and empowering them with more knowledge and skills will increase the sales and it can bring more revenue to the company.

It increases their sense of ownership in the business.

They become more organized, productive and flexible and are better able to meet the needs of internal and external customers.

New skills and abilities in areas such as decision-making can empower staff, which makes them more effective.

The second change I would want to bring in Oddbins is bringing more varieties of wines will bring more customers & consumers will have a large amount of selections to choose, so it gives the customers of multiple choice & it can also make the same customer to try different tastes, so instead of buying two bottles of wine the customers might ends up with buying more than one. Six months after it collapsed with debts of £20million, Oddbins returns this week as a champion of the "Old World" wines it helped to eclipse as the brand is re-launched by its new owner, wine distributors EFB Group, at 19 sites across London. One of the biggest changes the company has done in recent times is bringing more varieties into the company. Almost two thirds of the new Oddbins wines will be from Europe. There will be none of the heavily discounted supermarket brands that helped drive chains such as Threshers, Unwinds - and Oddbins itself - to the wall. The re-launched London branches include Balham and Stoke Newington. Innovations will include "pricing democracy" under which staff will be guided by how much customers say they will be prepared to pay in blind tastings. Oddbins' new managing director Ayo Akintola said: "The Old World is beginning to change and do things differently. There's still a level of discovery to be done.

More and frequent changes

Change is occurring at an incredible pace in organizations today. The sheer quantity of changes is increasing, and changes are happening more frequently and faster than ever before. With such large amounts of change happening, organizations need a better and more structured way to manage the individuals in the organization impacted by all of these changes.

Value system of empowerment

Over the last fifty years, value systems have shifted in many organizations. Old values of control and predictability have been replaced by new values to push decision making, authority and responsibility down into the organization. While this shift has delivered many benefits, it has also made top-down changes more difficult and increased the resistance they face. Organizations with empowered workforces need to manage the human side of change more effectively than they did in the very hierarchical structure of the past.

Competitive advantage

Many sources of competitive advantage have eroded as information moves more quickly and across the globe in seconds. In upcoming years, speed and agility will be a central differentiator in the market place. And organizations that do not use change management cannot build their internal competency to quickly and effectively implement change. Strong change management competencies within an organization are a key source of competitive advantage in coming years


This is assignment is all about Managing Change in Theory & Practice, the task of this assignment is to Select an organization of my which is currently operating in Europe & by giving the current conditions, I will have to write an essay critically evaluating what change management practices need to be implement to eliminate potential losses.

According to the task of this assignment I have selected Oddbins the wine company which is operating in United Kingdom & one of the major reason which pushed me to select that company was, that it was already running at a loss and the successful company might tend to close down all its outlets or declare bankruptcy in the near future. But being a business management student I took it as a challenge to find out even the minimal points which was in sources & foreign news papers.

First of all I have given the introduction of the company for the viewer to know the basic information of the company & along with that I have given the current economic condition in uk, so it will give a further idea for the viewer to know business procedures and difficulties for business in UK. After identifying the problems I have stated the changing process which should be implemented within the company to have a competitive advantage. Besides the body of this report I will attach an appendix page to support my arguments & justifications of this report.