Swot Analysis of "Chilli Beans: Peace, Love, and Sunglasses" written by Jose B. Alvarez, Robert Mackalski, Andrew Otazo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chilli Sunglasses facing as an external strategic factors. Some of the topics covered in Chilli Beans: Peace, Love, and Sunglasses case study are - Strategic Management Strategies, Design, Entrepreneurship, Financial markets, Growth strategy, International business, Leadership, Manufacturing, Organizational culture, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Chilli Beans: Peace, Love, and Sunglasses casestudy better are - – increasing energy prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, technology disruption, increasing commodity prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Chilli Beans: Peace, Love, and Sunglasses
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chilli Beans: Peace, Love, and Sunglasses case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chilli Sunglasses, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chilli Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses can be done for the following purposes –
1. Strategic planning using facts provided in Chilli Beans: Peace, Love, and Sunglasses case study
2. Improving business portfolio management of Chilli Sunglasses
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 Chilli Sunglasses
Strengths Chilli Beans: Peace, Love, and Sunglasses | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chilli Sunglasses in Chilli Beans: Peace, Love, and Sunglasses Harvard Business Review case study are -
Diverse revenue streams
– Chilli Sunglasses is present in almost all the verticals within the industry. This has provided firm in Chilli Beans: Peace, Love, and Sunglasses 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.
Operational resilience
– The operational resilience strategy in the Chilli Beans: Peace, Love, and Sunglasses 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.
Strong track record of project management
– Chilli Sunglasses 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
– Chilli Sunglasses 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 Chilli Sunglasses in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Chilli Sunglasses 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.
Training and development
– Chilli Sunglasses has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chilli Beans: Peace, Love, and Sunglasses 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.
Superior customer experience
– The customer experience strategy of Chilli Sunglasses in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Chilli Sunglasses has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chilli Sunglasses 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.
Innovation driven organization
– Chilli Sunglasses is one of the most innovative firm in sector. Manager in Chilli Beans: Peace, Love, and Sunglasses Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Chilli Sunglasses digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chilli Sunglasses 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.
High switching costs
– The high switching costs that Chilli Sunglasses 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Chilli Beans: Peace, Love, and Sunglasses firm has clearly differentiated products in the market place. This has enabled Chilli Sunglasses to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Chilli Sunglasses to invest into research and development (R&D) and innovation.
Weaknesses Chilli Beans: Peace, Love, and Sunglasses | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chilli Beans: Peace, Love, and Sunglasses are -
Workers concerns about automation
– As automation is fast increasing in the segment, Chilli Sunglasses 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.
Interest costs
– Compare to the competition, Chilli Sunglasses has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Chilli Beans: Peace, Love, and Sunglasses HBR case study mentions - Chilli Sunglasses 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.
Low market penetration in new markets
– Outside its home market of Chilli Sunglasses, firm in the HBR case study Chilli Beans: Peace, Love, and Sunglasses needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Jose B. Alvarez, Robert Mackalski, Andrew Otazo suggests that, Chilli Sunglasses 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Chilli Beans: Peace, Love, and Sunglasses 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 Chilli Sunglasses 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Chilli Sunglasses is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Chilli Sunglasses needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chilli Sunglasses to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Chilli Sunglasses 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Chilli Beans: Peace, Love, and Sunglasses, is just above the industry average. Chilli Sunglasses 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chilli Sunglasses is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chilli Beans: Peace, Love, and Sunglasses can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chilli Beans: Peace, Love, and Sunglasses, in the dynamic environment Chilli Sunglasses has struggled to respond to the nimble upstart competition. Chilli Sunglasses has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Chilli Beans: Peace, Love, and Sunglasses | 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 Chilli Beans: Peace, Love, and Sunglasses are -
Building a culture of innovation
– managers at Chilli Sunglasses 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.
Loyalty marketing
– Chilli Sunglasses 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chilli Sunglasses 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 Chilli Sunglasses in the consumer business. Now Chilli Sunglasses 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 Chilli Sunglasses 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chilli Sunglasses can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Chilli Beans: Peace, Love, and Sunglasses, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Chilli Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chilli Sunglasses to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Chilli Sunglasses 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.
Creating value in data economy
– The success of analytics program of Chilli Sunglasses has opened avenues for new revenue streams for the organization in the industry. This can help Chilli Sunglasses to build a more holistic ecosystem as suggested in the Chilli Beans: Peace, Love, and Sunglasses case study. Chilli Sunglasses can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Chilli Sunglasses to increase its market reach. Chilli Sunglasses 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.
Developing new processes and practices
– Chilli Sunglasses 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.
Buying journey improvements
– Chilli Sunglasses can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chilli Beans: Peace, Love, and Sunglasses 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chilli Sunglasses 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 Chilli Sunglasses to hire the very best people irrespective of their geographical location.
Threats Chilli Beans: Peace, Love, and Sunglasses External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chilli Beans: Peace, Love, and Sunglasses are -
High dependence on third party suppliers
– Chilli Sunglasses 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chilli Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses .
Shortening product life cycle
– it is one of the major threat that Chilli Sunglasses is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Chilli Sunglasses
– 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 Chilli Sunglasses.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chilli Sunglasses 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 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. Chilli Sunglasses needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Chilli Sunglasses business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Chilli Sunglasses in the Sales & Marketing sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chilli Sunglasses can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Chilli Sunglasses has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Chilli Sunglasses 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Chilli Sunglasses with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Chilli Beans: Peace, Love, and Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses 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 Chilli Beans: Peace, Love, and Sunglasses 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 Chilli Sunglasses needs to make to build a sustainable competitive advantage.