Case Study Description of Lakshmi Projects: Sales Structure Dilemma
In July 2014, the managing director of Lakshmi Projects in Delhi, India, finds himself struggling with the marketing and sales strategy for the year ahead. Founded in 1997, the company specializes in offering turnkey solutions for bulk material handling systems for industries in the fast-growing infrastructure segment of the Indian economy; its two main product categories are elevator and conveyor systems. Yet, the company was failing to meet its sales targets, largely due to an overextended and underachieving salesforce. What was the right structure for the sales, after-sales and quality teams in the organization? An additional concern was that a sales strategy for the company's new product, set to launch in October 2014, had not yet been decided. Fluctuating industry dynamics, financial strains, field sales and service requirements meant that this was a complex decision that held larger consequences for the company's future.
Authors :: Sandeep Puri, Mehmet Begen, Akshay Nangia, Arjit Rawal
Swot Analysis of "Lakshmi Projects: Sales Structure Dilemma" written by Sandeep Puri, Mehmet Begen, Akshay Nangia, Arjit Rawal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lakshmi Sales facing as an external strategic factors. Some of the topics covered in Lakshmi Projects: Sales Structure Dilemma case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Lakshmi Projects: Sales Structure Dilemma casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, technology disruption,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Lakshmi Projects: Sales Structure Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lakshmi Projects: Sales Structure Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lakshmi Sales, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lakshmi Sales 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 Lakshmi Projects: Sales Structure Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Lakshmi Projects: Sales Structure Dilemma case study
2. Improving business portfolio management of Lakshmi Sales
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 Lakshmi Sales
Strengths Lakshmi Projects: Sales Structure Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lakshmi Sales in Lakshmi Projects: Sales Structure Dilemma Harvard Business Review case study are -
Effective Research and Development (R&D)
– Lakshmi Sales 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 Lakshmi Projects: Sales Structure Dilemma - 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 Lakshmi Sales 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.
Highly skilled collaborators
– Lakshmi Sales 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 Lakshmi Projects: Sales Structure Dilemma HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Lakshmi Sales in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Lakshmi Sales has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lakshmi Sales to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Lakshmi Sales
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lakshmi Sales does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Lakshmi Sales is one of the most innovative firm in sector. Manager in Lakshmi Projects: Sales Structure Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Lakshmi Sales 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
– Lakshmi Sales is present in almost all the verticals within the industry. This has provided firm in Lakshmi Projects: Sales Structure Dilemma 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.
Learning organization
- Lakshmi Sales 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 Lakshmi Sales is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lakshmi Projects: Sales Structure Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Lakshmi Sales is one of the leading recruiters in the industry. Managers in the Lakshmi Projects: Sales Structure Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Lakshmi Sales has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lakshmi Sales 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.
Weaknesses Lakshmi Projects: Sales Structure Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lakshmi Projects: Sales Structure Dilemma are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lakshmi Projects: Sales Structure Dilemma, is just above the industry average. Lakshmi Sales 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 Lakshmi Sales is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Lakshmi Sales needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lakshmi Sales to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Lakshmi Sales 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lakshmi Projects: Sales Structure Dilemma, in the dynamic environment Lakshmi Sales has struggled to respond to the nimble upstart competition. Lakshmi Sales has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Sales has relatively successful track record of launching new products.
Lack of clear differentiation of Lakshmi Sales products
– To increase the profitability and margins on the products, Lakshmi Sales needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Lakshmi Sales 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.
Aligning sales with marketing
– It come across in the case study Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Projects: Sales Structure Dilemma can leverage the sales team experience to cultivate customer relationships as Lakshmi Sales is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Lakshmi Projects: Sales Structure Dilemma, it seems that the employees of Lakshmi Sales 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 Lakshmi Projects: Sales Structure Dilemma, 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.
Interest costs
– Compare to the competition, Lakshmi Sales 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.
Opportunities Lakshmi Projects: Sales Structure Dilemma | 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 Lakshmi Projects: Sales Structure Dilemma are -
Better consumer reach
– The expansion of the 5G network will help Lakshmi Sales to increase its market reach. Lakshmi Sales 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
– Lakshmi Sales 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.
Using analytics as competitive advantage
– Lakshmi Sales 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 Lakshmi Projects: Sales Structure Dilemma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lakshmi Sales to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lakshmi Sales 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 Lakshmi Sales to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lakshmi Sales 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, Lakshmi Projects: Sales Structure Dilemma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Lakshmi Sales 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.
Loyalty marketing
– Lakshmi Sales 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.
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. Lakshmi Sales can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Lakshmi Sales 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.
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. Lakshmi Sales 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. Lakshmi Sales 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.
Creating value in data economy
– The success of analytics program of Lakshmi Sales has opened avenues for new revenue streams for the organization in the industry. This can help Lakshmi Sales to build a more holistic ecosystem as suggested in the Lakshmi Projects: Sales Structure Dilemma case study. Lakshmi Sales can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Lakshmi Sales 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.
Buying journey improvements
– Lakshmi Sales can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lakshmi Projects: Sales Structure Dilemma 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.
Threats Lakshmi Projects: Sales Structure Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lakshmi Projects: Sales Structure Dilemma are -
High dependence on third party suppliers
– Lakshmi Sales 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.
Shortening product life cycle
– it is one of the major threat that Lakshmi Sales is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Lakshmi Sales business can come under increasing regulations regarding data privacy, data security, etc.
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. Lakshmi Sales can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lakshmi Sales 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 Lakshmi Projects: Sales Structure Dilemma .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lakshmi Sales 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.
Increasing wage structure of Lakshmi Sales
– 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 Lakshmi Sales.
Stagnating economy with rate increase
– Lakshmi Sales 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.
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 Lakshmi Sales in the Sales & Marketing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lakshmi Sales with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Lakshmi Sales 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.
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. Lakshmi Sales needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Projects: Sales Structure Dilemma 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 Lakshmi Sales needs to make to build a sustainable competitive advantage.
