Case Study Description of Rana Plaza: Workplace Safety in Bangladesh (A)
To maximize their effectiveness, color cases should be printed in color.On April 24, 2013 the Rana Plaza factory building collapsed in Dhaka, the capital of Bangladesh. Over 1,100 people were killed in the worst industrial accident since the Union Carbide plant gas leak in Bhopal, India. Most of the victims worked for garment factories, whose primary clients were European, US and Canadian firms. Export contracts to such firms had helped Bangladesh become the world's second largest clothing exporter. Rana Plaza was not the first tragedy to occur in Bangladesh's garment industry, and without intervention, more might follow. International brand owners, domestic and foreign governments, labor unions and non-governmental organizations (NGOs), stepped up to discuss their responsibilities for improving conditions for Bangladeshi garment workers.
Swot Analysis of "Rana Plaza: Workplace Safety in Bangladesh (A)" written by John A. Quelch, Margaret Rodriguez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rana Plaza facing as an external strategic factors. Some of the topics covered in Rana Plaza: Workplace Safety in Bangladesh (A) case study are - Strategic Management Strategies, Entrepreneurship, Government, International business, Marketing, Organizational culture, Personnel policies, Social responsibility and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Rana Plaza: Workplace Safety in Bangladesh (A) casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing transportation and logistics costs, technology disruption, increasing government debt because of Covid-19 spendings, increasing commodity prices,
increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Rana Plaza: Workplace Safety in Bangladesh (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rana Plaza: Workplace Safety in Bangladesh (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rana Plaza, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rana Plaza 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 Rana Plaza: Workplace Safety in Bangladesh (A) can be done for the following purposes –
1. Strategic planning using facts provided in Rana Plaza: Workplace Safety in Bangladesh (A) case study
2. Improving business portfolio management of Rana Plaza
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 Rana Plaza
Strengths Rana Plaza: Workplace Safety in Bangladesh (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rana Plaza in Rana Plaza: Workplace Safety in Bangladesh (A) Harvard Business Review case study are -
Learning organization
- Rana Plaza 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 Rana Plaza is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rana Plaza: Workplace Safety in Bangladesh (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Rana Plaza
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rana Plaza does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Rana Plaza is one of the most innovative firm in sector. Manager in Rana Plaza: Workplace Safety in Bangladesh (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Rana Plaza: Workplace Safety in Bangladesh (A) 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.
Highly skilled collaborators
– Rana Plaza has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Rana Plaza: Workplace Safety in Bangladesh (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Rana Plaza digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rana Plaza has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Rana Plaza has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rana Plaza 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.
High switching costs
– The high switching costs that Rana Plaza 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.
Low bargaining power of suppliers
– Suppliers of Rana Plaza in the sector have low bargaining power. Rana Plaza: Workplace Safety in Bangladesh (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rana Plaza to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Rana Plaza in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Rana Plaza is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Rana Plaza 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 Rana Plaza in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Rana Plaza: Workplace Safety in Bangladesh (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rana Plaza: Workplace Safety in Bangladesh (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rana Plaza: Workplace Safety in Bangladesh (A), it seems that the employees of Rana Plaza 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rana Plaza: Workplace Safety in Bangladesh (A), is just above the industry average. Rana Plaza 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.
Increasing silos among functional specialists
– The organizational structure of Rana Plaza is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Rana Plaza needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rana Plaza to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, Margaret Rodriguez suggests that, Rana Plaza is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Rana Plaza 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. Rana Plaza 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rana Plaza is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rana Plaza: Workplace Safety in Bangladesh (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Rana Plaza 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.
Aligning sales with marketing
– It come across in the case study Rana Plaza: Workplace Safety in Bangladesh (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Rana Plaza: Workplace Safety in Bangladesh (A) can leverage the sales team experience to cultivate customer relationships as Rana Plaza is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Rana Plaza: Workplace Safety in Bangladesh (A) 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 Rana Plaza 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Rana Plaza: Workplace Safety in Bangladesh (A), in the dynamic environment Rana Plaza has struggled to respond to the nimble upstart competition. Rana Plaza has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Rana Plaza products
– To increase the profitability and margins on the products, Rana Plaza needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Rana Plaza: Workplace Safety in Bangladesh (A) | 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 Rana Plaza: Workplace Safety in Bangladesh (A) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rana Plaza can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Rana Plaza 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.
Building a culture of innovation
– managers at Rana Plaza 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.
Developing new processes and practices
– Rana Plaza 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.
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. Rana Plaza can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Rana Plaza has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Rana Plaza: Workplace Safety in Bangladesh (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rana Plaza to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Rana Plaza 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rana Plaza 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. Rana Plaza 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rana Plaza 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 Rana Plaza in the consumer business. Now Rana Plaza can target international markets with far fewer capital restrictions requirements than the existing system.
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 Rana Plaza 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.
Loyalty marketing
– Rana Plaza 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rana Plaza 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.
Threats Rana Plaza: Workplace Safety in Bangladesh (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rana Plaza: Workplace Safety in Bangladesh (A) are -
Environmental challenges
– Rana Plaza 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. Rana Plaza can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rana Plaza 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 Rana Plaza: Workplace Safety in Bangladesh (A) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rana Plaza: Workplace Safety in Bangladesh (A), Rana Plaza may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Technology acceleration in Forth Industrial Revolution
– Rana Plaza has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Rana Plaza 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 Rana Plaza in the Sales & Marketing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Rana Plaza 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.
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.
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 Rana Plaza.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Rana Plaza business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rana Plaza with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Rana Plaza is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Rana Plaza 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.
Regulatory challenges
– Rana Plaza needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Weighted SWOT Analysis of Rana Plaza: Workplace Safety in Bangladesh (A) 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 Rana Plaza: Workplace Safety in Bangladesh (A) 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 Rana Plaza: Workplace Safety in Bangladesh (A) 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 Rana Plaza: Workplace Safety in Bangladesh (A) 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 Rana Plaza: Workplace Safety in Bangladesh (A) 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 Rana Plaza needs to make to build a sustainable competitive advantage.