Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products

The Namaste case is a story of how Kellogg alumni couple Gary and Denise Gardner grow their Namaste-branded hair care line from production at the family's kitchen table into a formidable $80 million empire within a 14-year period. The Gardners come from a longtime hair care business lineage, the Soft Sheen dynasty, started by Gary's father decades earlier. Soft Sheen was ultimately sold to hair care giant L'Oreal for over $100 million. The Gardners claim Namaste's growth occurred through listening to the needs and desires of customers for healing hair care products that reminded them of nourishing household remedies. The hair care line became a leader in its industry but faced the dilemma of how to expand sales in new markets, especially international markets such as South Africa and Nigeria.

Authors :: Cheryl Mayberry-McKissack, Tracey Robinson-English

Topics :: Sales & Marketing

Tags :: Race, Sales, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products" written by Cheryl Mayberry-McKissack, Tracey Robinson-English includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hair Namaste facing as an external strategic factors. Some of the topics covered in Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products case study are - Strategic Management Strategies, Race, Sales and Sales & Marketing.

Some of the macro environment factors that can be used to understand the Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products casestudy better are - – technology disruption, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hair Namaste, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hair Namaste 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products can be done for the following purposes –
1. Strategic planning using facts provided in Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products case study
2. Improving business portfolio management of Hair Namaste
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hair Namaste

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Strengths Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hair Namaste in Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products Harvard Business Review case study are -

Cross disciplinary teams

– Horizontal connected teams at the Hair Namaste are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Diverse revenue streams

– Hair Namaste is present in almost all the verticals within the industry. This has provided firm in Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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.

Sustainable margins compare to other players in Sales & Marketing industry

– Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products firm has clearly differentiated products in the market place. This has enabled Hair Namaste to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Hair Namaste to invest into research and development (R&D) and innovation.

Analytics focus

– Hair Namaste 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 Cheryl Mayberry-McKissack, Tracey Robinson-English 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.

Operational resilience

– The operational resilience strategy in the Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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.

Superior customer experience

– The customer experience strategy of Hair Namaste in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– Hair Namaste has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hair Namaste to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Effective Research and Development (R&D)

– Hair Namaste has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that Hair Namaste has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Organizational Resilience of Hair Namaste

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hair Namaste does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Learning organization

- Hair Namaste 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 Hair Namaste is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Ability to lead change in Sales & Marketing field

– Hair Namaste 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 Hair Namaste in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products are -

Need for greater diversity

– Hair Namaste 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.

Lack of clear differentiation of Hair Namaste products

– To increase the profitability and margins on the products, Hair Namaste needs to provide more differentiated products than what it is currently offering in the marketplace.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products, in the dynamic environment Hair Namaste has struggled to respond to the nimble upstart competition. Hair Namaste has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring

– The stress on hiring functional specialists at Hair Namaste has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products, is just above the industry average. Hair Namaste 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 star products

– The top 2 products and services of the firm as mentioned in the Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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 Hair Namaste has relatively successful track record of launching new products.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products, it seems that the employees of Hair Namaste don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

No frontier risks strategy

– After analyzing the HBR case study Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.

High cash cycle compare to competitors

Hair Namaste 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.

Capital Spending Reduction

– Even during the low interest decade, Hair Namaste has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

Products dominated business model

– Even though Hair Namaste has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products should strive to include more intangible value offerings along with its core products and services.

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Opportunities Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products | 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 Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products are -

Better consumer reach

– The expansion of the 5G network will help Hair Namaste to increase its market reach. Hair Namaste will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Low interest rates

– Even though inflation is raising its head in most developed economies, Hair Namaste 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.

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 Hair Namaste 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hair Namaste can use these opportunities to build new business models that can help the communities that Hair Namaste operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.

Building a culture of innovation

– managers at Hair Namaste 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 Sales & Marketing segment.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Hair Namaste can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Hair Namaste is facing challenges because of the dominance of functional experts in the organization. Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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.

Developing new processes and practices

– Hair Namaste can develop new processes and procedures in Sales & Marketing 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.

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 Hair Namaste in the consumer business. Now Hair Namaste can target international markets with far fewer capital restrictions requirements than the existing system.

Learning at scale

– Online learning technologies has now opened space for Hair Namaste to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Hair Namaste in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Hair Namaste has opened avenues for new revenue streams for the organization in the industry. This can help Hair Namaste to build a more holistic ecosystem as suggested in the Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products case study. Hair Namaste can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– Hair Namaste can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

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Threats Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products are -

Stagnating economy with rate increase

– Hair Namaste 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 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. Hair Namaste needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that Hair Namaste is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Hair Namaste 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 Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products .

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Hair Namaste in the Sales & Marketing industry. The Sales & Marketing 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.

High dependence on third party suppliers

– Hair Namaste 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.

Technology acceleration in Forth Industrial Revolution

– Hair Namaste has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Hair Namaste needs to keep up with the evolution of technology in the Sales & Marketing 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 Hair Namaste in the Sales & Marketing sector and impact the bottomline of the organization.

Environmental challenges

– Hair Namaste needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Hair Namaste can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.

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. Hair Namaste 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.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Hair Namaste.

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Weighted SWOT Analysis of Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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 Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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 Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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 Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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 Entrepreneurial Sales Strategies: Namaste Laboratories Pursues New Markets for Hair Care Products 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 Hair Namaste needs to make to build a sustainable competitive advantage.

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