Hindustan Lever (B): The Reality Check SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hindustan Lever (B): The Reality Check
The B-case of this three part series shows how performance lagged behind expectations. Women dropped out of the scheme, sales decreased during the harvest season, and the system risked losing momentum. HLL needed to decide whether to wait for the system to eventually take off, or to implement changes to the complex system of interdependent variables and players. This case shows how a mere innovation, as outlined in the A-case, is insufficient to create a sustainable model. Learning, facing reality, and giving the system time to evolve are key success factors.
Authors :: Ulrich Steger, Aileen Ionescu-Somers, Wolfgang Amman
Swot Analysis of "Hindustan Lever (B): The Reality Check" written by Ulrich Steger, Aileen Ionescu-Somers, Wolfgang Amman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that System Reality facing as an external strategic factors. Some of the topics covered in Hindustan Lever (B): The Reality Check case study are - Strategic Management Strategies, Marketing, Sustainability and Organizational Development.
Some of the macro environment factors that can be used to understand the Hindustan Lever (B): The Reality Check casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, there is backlash against globalization, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, geopolitical disruptions,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of Hindustan Lever (B): The Reality Check
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hindustan Lever (B): The Reality Check case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the System Reality, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which System Reality operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hindustan Lever (B): The Reality Check can be done for the following purposes –
1. Strategic planning using facts provided in Hindustan Lever (B): The Reality Check case study
2. Improving business portfolio management of System Reality
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of System Reality
Strengths Hindustan Lever (B): The Reality Check | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of System Reality in Hindustan Lever (B): The Reality Check Harvard Business Review case study are -
Training and development
– System Reality has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hindustan Lever (B): The Reality Check Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– System Reality has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. System Reality has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– System Reality is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ulrich Steger, Aileen Ionescu-Somers, Wolfgang Amman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- System Reality is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at System Reality is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hindustan Lever (B): The Reality Check Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Organizational Development industry
– Hindustan Lever (B): The Reality Check firm has clearly differentiated products in the market place. This has enabled System Reality to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped System Reality to invest into research and development (R&D) and innovation.
Ability to lead change in Organizational Development field
– System Reality is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled System Reality in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Hindustan Lever (B): The Reality Check Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of System Reality
– The covid-19 pandemic has put organizational resilience at the centre of everthing that System Reality does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– System Reality is present in almost all the verticals within the industry. This has provided firm in Hindustan Lever (B): The Reality Check case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– System Reality is one of the leading recruiters in the industry. Managers in the Hindustan Lever (B): The Reality Check are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– System Reality is one of the most innovative firm in sector. Manager in Hindustan Lever (B): The Reality Check Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– System Reality is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Hindustan Lever (B): The Reality Check | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hindustan Lever (B): The Reality Check are -
High cash cycle compare to competitors
System Reality has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, System Reality is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hindustan Lever (B): The Reality Check can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– System Reality has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hindustan Lever (B): The Reality Check HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though System Reality has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Hindustan Lever (B): The Reality Check has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract System Reality 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hindustan Lever (B): The Reality Check, is just above the industry average. System Reality needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of System Reality supply chain. Even after few cautionary changes mentioned in the HBR case study - Hindustan Lever (B): The Reality Check, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left System Reality vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, System Reality needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Hindustan Lever (B): The Reality Check HBR case study mentions - System Reality takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Hindustan Lever (B): The Reality Check, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, System Reality has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. System Reality even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Hindustan Lever (B): The Reality Check | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hindustan Lever (B): The Reality Check are -
Loyalty marketing
– System Reality has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. System Reality can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. System Reality can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for System Reality to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for System Reality to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, System Reality can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for System Reality in the consumer business. Now System Reality can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects System Reality can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help System Reality to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. System Reality can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, System Reality is facing challenges because of the dominance of functional experts in the organization. Hindustan Lever (B): The Reality Check case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– System Reality can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hindustan Lever (B): The Reality Check suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– System Reality can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– System Reality can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at System Reality can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Threats Hindustan Lever (B): The Reality Check External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hindustan Lever (B): The Reality Check are -
Shortening product life cycle
– it is one of the major threat that System Reality is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, System Reality can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hindustan Lever (B): The Reality Check .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for System Reality in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. System Reality will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. System Reality needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Increasing wage structure of System Reality
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of System Reality.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– System Reality can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– System Reality high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents System Reality with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– System Reality has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, System Reality needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for System Reality in the Organizational Development sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Hindustan Lever (B): The Reality Check Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hindustan Lever (B): The Reality Check needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hindustan Lever (B): The Reality Check is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hindustan Lever (B): The Reality Check is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hindustan Lever (B): The Reality Check is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that System Reality needs to make to build a sustainable competitive advantage.
