Every company has a unique history that explains its trends and strategies that has assisted its development from the time of establishment to it becoming a global icon in the modern business world. In the development process, a combination of different approaches and techniques are used amongst these, the research and development leading to product innovation, marketing strategies, and staff empowerment. In this respect, this paper will describe the development of Pandora Group towards becoming a global icon. In doing this, the piece identifies the strategies the company can apply to remain competitive in the changing business environment.
Pandora group was established in 1982 by a couple-Per and Winnie-as a jewelry shop at a modest place in Copenhagen in Denmark (The Pandora Story). The couple sourced their products from Thailand, and due to the rising demand for jewelry, they started selling them in wholesale to retail clients in Denmark. In 1987 the retail business was closed, and the company moved to a larger premise. Pandora started its unique jewelry manufacturing industry in Thailand and recruited an in-house designer in 1989 (Tang). In 2000 the famous Pandora ‘s charm bracelet was introduced to the Danish market. This concept allowed customers to choose from a wide range of bracelets made of different materials including Sterling Silver, Murano Glass, and 14k Gold. Consumers welcomed the idea, and in the following years, Pandora began its journey of investing in the international gloabl market thanks to the growing demand for their products.
The company entered its first international market, the United States, in 2003. Pandora expanded its market territories by first shifting from a Scandinavian platform to a more sale oriented global marketing strategy driven by third-party distributors and its capability to mass produce in Thailand (The Pandora Story). Distribution was mainly done in gift shops and later introduced in the jewelry stores. To increase its production capability, Pandora opened a fully-owned six-story manufacturing facility in Thailand in 2005 which was then followed by three more facilities opened before the year 2010 to strengthen their setup of producing their unique products. In 2007, the Pandora concept stores were launched where shops were opened to sell Pandora’s jewelry exclusively (Tang). The first store was opened in Charlotte in North Carolina, and expansion has been achieved with the firm operating in more than 100 countries all over the world to date. Axcel owned sixty percent of Pandora in 2008, and by 2010 the company was listed in the NASDAQ OMX Copenhagen stock exchange.
Pandora Group’s main goal is to provide high-quality modern jewelry to consumers at an affordable price. The company has a wide range of targeted consumers who included men and women in love with diamonds in both upper and middle-class segments. The company has over 5500 employees; most of who are located in Thailand with its headquarters in Denmark. Pandora’s success is attributed to many business aspects that helped the firm achieve its primary goal.
Having a sturdy governance structure is one of the company’s development and competitiveness strategies. Pandora has a strong belief that strong governance results in accountability, transparency, and ensures that the firm meets all of its key stakeholders’ expectation to its best atop maintaining longtime value creation. Pandora’s management responsibilities are shared between the board of directors and executive management (Corporate Governance). The primary duties of the board are to ensure there is efficient asset management and to install strong bookkeeping for records.
It is also falls as the duty of the board to oversee Pandora’s financial development, company risk management strategies, internal control, and related planning and reporting systems. Through well-organized management the enterprise can allocate resources for product innovation and conducting follow-ups.
Pandora is focused on the technological and innovation areas. It operates on a vertically integrated model by controlling the entire value chain including design, production, sales, and distribution of their jewelry products. This helps the company to benefit from scalability and flexibility of maintaining a complete and clear overview of its operation and allow the company to develop products that meet their customer expectations in the changing business environment. Besides, the company offers a conducive and attractive store environment which are stocked with high-quality products and provide an excellent customer experience in the shopping process.
Quality development is strengthened by hand-finishing every product using highly skilled craftsmen. Combination of scalable and high standard modern techniques with experienced craftsmanship allowed the company to produce 91 million pieces of jewelry in 2014. To reduce the cost of production of these labor-intensive products, the company set up a facility in Thailand due to the favorable wage brackets and to take advantage of the country’s traditional experience on silver jewelry production.
In Thailand, Pandora’s raw material purchasing power was strong giving the company a cost advantage that enabled them to sell high-quality products at lower prices making bulk sales which in turn increased the returns for the company (Material Sourcing). The company also accepted returns which were melted down and reused to produce more quality fast moving pieces of jewelry (Bhasin). Deutsche Bank estimated that the re-melting the jewelry had an estimated cost of about five percent of the jewelry’s price which is more economical compared to discounting aimed at clearing the old stocks. The introduction of an internal data management system assisted the company’s management in monitoring sales on a daily basis mostly in the Pandora concept stores but also the company is launching the system in other stores dealing with Pandora products. Through the use of the system, essential information on consumer preference and product demand is collected which is then used to adjust the production and distribution of the products.
The company is continually inventing new products to cater to changing consumer preferences. Pandora has developed a target of having seven annual product launches as a method of product promotion to drive customer attention and attract an increase in customer base in its stores. These launches allow the operating stores to stock new product assortments to keep the business mood high even in the low business seasons. Although charms and bracelets remain the primary firm’s products, Pandora is also making necklaces, earrings, rings, and pendants to diversify its product portfolio that will attract a large number of different customers.
To make the products relevant throughout the year the enterprise is venturing into more innovative cultural oriented products that vary with different seasons and occasions. Pandora’s management is also increasing the frequency of product launching and promotion. The company has set up more innovation centers in Thailand to enable it to develop new product designs in less than four months. This will help Pandora to adapt to the fast changing trends and grab emerging market opportunities. To reach out to the existing customers and attract new ones to purchase the newly developed products in a Pandora context, the company is working on using social media influence to create public relation and draw compliments and critics from the customers. Pandora is facing competition from other companies in the same field of production. To remain competitive, the enterprise is gradually adjusting its marketing technology to maximize product awareness in six continents where their stores are located. In 2014, Pandora teamed up with Walt Disney which gave Pandora’s product a presence in Disneyland Resort and also in Walt Disney World Resort through sponsoring of some programs as part of its public relation approach (Bhasin). To add on that the two companies are developing a collection of beautifully developed Disney themed jewelry products that are expected to be launched in all its jewelry retail stores.
Pandora’s best model of remaining competitive and increasing customer trust entails eliminating the social vices that exist in society such as condemning gender inequality and empowering women. In this case, Pandora applied this mechanism by partnering with the Dress for Success organization which empowers women as they prepare for an upcoming job interview. Providing such support helps women acquire the necessary attires for that specific occasion which are complemented with high quality and attractive Pandora jewelry. Having dressed to their satisfaction boost their self-confidence in the whole interview process and in a situation where they secure the job they return to the organization for an entire week’s complete job attires. Through such voluntary practices, Pandora strengthens its brand bond with the society which eliminates any competitor.
Inter-professional collaborations are an essential factor in product innovation. During product development, the initial plan originates from the design specialists. In case of an introduction of new materials, the designer must consult to understand the environmental and social impact of the material to avoid the use of harmful materials in the production of the jewelry (Pandora Ethics Report). In addition to that, interprofessional interactions are crucial because the designers must work together with the manufactures to make sure the actual product matches the designed one. The innovative development center in Bangkok assists the designers and the manufacturers to come up with new competitive and appealing production techniques and help the Thai colleagues to work and invest in the frontline of the company as a return to the community. Pandora’s employees are highly skilled in the field of jewelry due to the training from the company’s innovation center in the event helping Thailand to become a prominent world jewelry center.
To ensure that the gold used in the production of jewelry in the company are original, they exclusively source it from reputable companies which are certified according to RJC’s code of practices. According to “Pandora Ethics Report,” like other companies, the challenges of counterfeit goods have emerged with fake jewelry branded Pandora flooding the market. These products have caused problems related to customer’s trust. In order to address the issue of counterfeits, the firm has employed all possible mechanisms of restraining any entry of fake merchandise related to their brand name. Some of the techniques used include the global surveillance and registration of control programs. To make customers aware of the firm’s special features that differ from counterfeits, Pandora has availed all relevant information in customer platforms to enable them to differentiate fake from original products. These types of information include product specifications, stamps, care, and maintenance information on the products.
The dominance of the Pandora Group in the jewelry market is attributed to the qualified workforce involved in the production of these products. In return, it is the responsibility of the company to ensure the maintenance of the wellbeing of its staff through vigorous training and employee empowerment. In addition to the team, the enterprise also needs good customer relationships that will strengthen the bond between the consumers and the company’s products (Pandora Ethics Report). to accomplish its public relations goal, Pandora has heavily invested in its human resource department deploying more than 29000 people who passionately engage in selling their products all over the world. Pandora’s Group Training Department organizes training programs that ensure it instills the critical marketing and public relation techniques in the firm’s stores and also reaches out to the staff selling their products via a partnership. In most cases, the empowerment program’s objectives are to offer face to face training, coaching, and to provide e-learning to the staffs located far from the company’s reach.
The training scope entails training in Pandora’s values, history, material and jewelry expertise, production processes and also excellent sales skills and techniques through 55 in-house trainers. The e-learning program is availed in 19 languages, and about 380,000 online training sessions were completed in 2014. The CSR e-learning program was launched in 2014 to equip company’s staff with information on the responsible material sourcing practices, the working conditions in the crafting facilities, and also informing them on how to combat counterfeit jewelry. Also, Pandora ensured that its staff is knowledgeable and informed on the ethical initiatives and programs (Bhasin). The objective of informing the employees on the ethical and company’s initiatives is to ensure rhyme with the company’s ethics and initiatives and can explain them to the customers and as they engage them in the Pandora’s values and responsibly crafted products
When developing a product strategy, the main aim is to make the product more competitive and outdo other companies operating within the same industry. Pandora’s success is also associated with great marketing, advertising, and promotion strategies (Bhasin). The enterprise has a unique behavior that differentiates Pandora from other jewelry companies by adopting a brand fashion concept rather than just being a jewelry distributor (Bhasin). More so the firm’s outlets attractiveness is addressed through strong bright candy colors that add personality and energy as well as communicate a new message of positivity to the customers. The approach has marked a company product awareness shift from product driven advertisement approach to a style oriented approach. This adds an aspect of fun to the company’s brands and personality.
Bright candy colors also help Pandora’s outlets stand out from those of competitors making them more approachable as compared to the stodgy competitor’s outlets. To diversify on the market portfolio, the company has changed the mentality associating jewelry products to romantic relationships to a more focused perception where feminine ethics and codes are accorded more attention. Pandora marketing success and increased revenue are also as a result of its improvement in communication strategies where the customers can now feel free to interact with the more diverse but robust workers. The employee mix is made up of individuals from other fashion industries, for example, beauty, technology, sportswear, and fashion to break jewelry culture monotony in the stores to promote a more diversified culture. The combination of experience from these fields helps the customer in brand selection to ensure they buy products which will fit perfectly as per their expectations.
From the study, I would recommend that for the company to develop it need to have a strong value chain. Vertical integration should be considered as the main focus in the course of development, and the company’s management should diversify the product portfolio to enjoy the benefit of economies of scale. According to the study, Pandora Group started as a single shop that targeted individual customers. Per showed some aspect of vertical integration because he used to ship his product at a lower cost from Thailand and sold them as a wholesaler in Denmark. After noticing an increase in demand, the company opened a production site to ensure the quality of their products and also meet the market demands. By doing this, the company enjoyed the benefits of economies of scale. Having an idea of cost minimization, Pandora started to conduct product research on its own, introduce product in-house designers and craftsmen, and marketing their products through their outlets among other channels. By combining all of these aspects under one roof, Pandora strengthened its complete value chain approach.
The second recommendation is that the enterprise should have reliable and goal-oriented management. Pandora’s running and operations are closely monitored through the collaboration of the board of governors and the executive management. A competent management power attracts investors and inventors to the company, and as a result, the firm’s capital base is strengthened and new production technologies introduced. Research and development strength of a business is essential in ensuring the company’s competitive power. This is evident from the Pandora Group where a research center was set in Thailand to allow for more invention of new products that meet the consumer expectations. Market research is also crucial even before the commencement of production to forecast demand and identify changes in the market trends.
Also, the company should consider their marketing strength before a product is developed. Such an approach will help the enterprise determine the marketing channels the product will follow to reach the targeted market and market segment consumption capacity to ensure there are no over or undersupply. Other marketing factors considered together with market research are marketing personnel strength and experience which can be perfected through training and human resource empowerment programs. For example, in our case study, Pandora Group is distributing its products through company-owned outlets and also through a partnership with other firms. Besides, Pandora is investing a lot in human resource and also in the staff training programs through the firm’s training department. In making training possible in stores located far away, an online training program was developed and became successful.
More so, companies should be societal oriented in the product production process. Being in good terms with the society by participating in the community empowerment programs as a return to the community strengthens the bond between customers and the company. A good example is where Pandora partnered with the Dress for Success organization whose main aim was to develop women’s confidence during the job interview. When those women find a job and become financially independent, they will remain loyal to the company and as a result, becoming longtime customers and excellent ambassadors of the firm’s name in the society.
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