JSW Shoppe - A Unique Distribution Model for Branded Steel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of JSW Shoppe - A Unique Distribution Model for Branded Steel
Organized Steel retailing was not a very popular concept among steel manufacturers in India. There were very few initiatives undertaken by the Indian players, and the most prominent one was the JSW Shoppe concept promoted by Jindal Steel Works (JSW). JSW, a manufacturer of various grades of steel, sold its products through a large network of dealers. However, the management was concerned with building a brand image for its products, increasing its market penetration beyond its current market of builders and fabricators and attracting the attention of end users who, in turn, would drive up the sales. The company felt that the current distribution model would not serve the purpose, and designed the unique concept of JSW Shoppe - a franchising model wherein the company would partner with the existing, as well as, new dealers to achieve their objectives.Set in 2010, the case study deals with the issues and challenges of transforming from a transactional distribution model to a relationship-based distribution model for franchising. Through the analysis of the case study, students can try to find the execution flaws in the company's transformation, and seek the best way to address the issues related to this transformation. The case demonstrates the importance and role of a sales person and the problems and issues that arise when the distribution model is changed - both from the dealers' and the company's perspectives. Highlights of the case include the presentation of the challenges of franchising a specialty product, the evaluation of dealers using a balanced scorecard and the preparation of an elaborate training module for the sales force.
Swot Analysis of "JSW Shoppe - A Unique Distribution Model for Branded Steel" written by V. V. Gopal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jsw Shoppe facing as an external strategic factors. Some of the topics covered in JSW Shoppe - A Unique Distribution Model for Branded Steel case study are - Strategic Management Strategies, Branding, Change management, International business, Sales, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the JSW Shoppe - A Unique Distribution Model for Branded Steel casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing energy prices, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
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 JSW Shoppe - A Unique Distribution Model for Branded Steel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in JSW Shoppe - A Unique Distribution Model for Branded Steel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jsw Shoppe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jsw Shoppe 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 JSW Shoppe - A Unique Distribution Model for Branded Steel can be done for the following purposes –
1. Strategic planning using facts provided in JSW Shoppe - A Unique Distribution Model for Branded Steel case study
2. Improving business portfolio management of Jsw Shoppe
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 Jsw Shoppe
Strengths JSW Shoppe - A Unique Distribution Model for Branded Steel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jsw Shoppe in JSW Shoppe - A Unique Distribution Model for Branded Steel Harvard Business Review case study are -
Analytics focus
– Jsw Shoppe 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 V. V. Gopal 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.
Ability to recruit top talent
– Jsw Shoppe is one of the leading recruiters in the industry. Managers in the JSW Shoppe - A Unique Distribution Model for Branded Steel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Jsw Shoppe digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jsw Shoppe 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.
Cross disciplinary teams
– Horizontal connected teams at the Jsw Shoppe 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.
Strong track record of project management
– Jsw Shoppe is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Jsw Shoppe in the sector have low bargaining power. JSW Shoppe - A Unique Distribution Model for Branded Steel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jsw Shoppe to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the JSW Shoppe - A Unique Distribution Model for Branded Steel 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.
Sustainable margins compare to other players in Sales & Marketing industry
– JSW Shoppe - A Unique Distribution Model for Branded Steel firm has clearly differentiated products in the market place. This has enabled Jsw Shoppe to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Jsw Shoppe to invest into research and development (R&D) and innovation.
Organizational Resilience of Jsw Shoppe
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jsw Shoppe does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Jsw Shoppe has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jsw Shoppe to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Jsw Shoppe has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jsw Shoppe 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 Jsw Shoppe 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.
Weaknesses JSW Shoppe - A Unique Distribution Model for Branded Steel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of JSW Shoppe - A Unique Distribution Model for Branded Steel are -
Slow to strategic competitive environment developments
– As JSW Shoppe - A Unique Distribution Model for Branded Steel HBR case study mentions - Jsw Shoppe 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jsw Shoppe is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study JSW Shoppe - A Unique Distribution Model for Branded Steel can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Jsw Shoppe 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study JSW Shoppe - A Unique Distribution Model for Branded Steel, is just above the industry average. Jsw Shoppe 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.
Lack of clear differentiation of Jsw Shoppe products
– To increase the profitability and margins on the products, Jsw Shoppe needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Jsw Shoppe 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.
Need for greater diversity
– Jsw Shoppe 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.
Aligning sales with marketing
– It come across in the case study JSW Shoppe - A Unique Distribution Model for Branded Steel 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 JSW Shoppe - A Unique Distribution Model for Branded Steel can leverage the sales team experience to cultivate customer relationships as Jsw Shoppe is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Jsw Shoppe, firm in the HBR case study JSW Shoppe - A Unique Distribution Model for Branded Steel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study JSW Shoppe - A Unique Distribution Model for Branded Steel, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study JSW Shoppe - A Unique Distribution Model for Branded Steel, it seems that the employees of Jsw Shoppe 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.
Opportunities JSW Shoppe - A Unique Distribution Model for Branded Steel | 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 JSW Shoppe - A Unique Distribution Model for Branded Steel are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jsw Shoppe 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jsw Shoppe can use these opportunities to build new business models that can help the communities that Jsw Shoppe operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Jsw Shoppe to increase its market reach. Jsw Shoppe 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jsw Shoppe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jsw Shoppe 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, JSW Shoppe - A Unique Distribution Model for Branded Steel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Jsw Shoppe 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.
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 Jsw Shoppe 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.
Learning at scale
– Online learning technologies has now opened space for Jsw Shoppe 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.
Buying journey improvements
– Jsw Shoppe can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. JSW Shoppe - A Unique Distribution Model for Branded Steel 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.
Creating value in data economy
– The success of analytics program of Jsw Shoppe has opened avenues for new revenue streams for the organization in the industry. This can help Jsw Shoppe to build a more holistic ecosystem as suggested in the JSW Shoppe - A Unique Distribution Model for Branded Steel case study. Jsw Shoppe can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Jsw Shoppe 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. Jsw Shoppe 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. Jsw Shoppe 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Jsw Shoppe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats JSW Shoppe - A Unique Distribution Model for Branded Steel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study JSW Shoppe - A Unique Distribution Model for Branded Steel are -
High dependence on third party suppliers
– Jsw Shoppe 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.
Stagnating economy with rate increase
– Jsw Shoppe 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.
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.
Shortening product life cycle
– it is one of the major threat that Jsw Shoppe 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, Jsw Shoppe 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 JSW Shoppe - A Unique Distribution Model for Branded Steel .
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 Jsw Shoppe in the Sales & Marketing sector and impact the bottomline 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 Jsw Shoppe.
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 Jsw Shoppe business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Jsw Shoppe 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. Jsw Shoppe can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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. Jsw Shoppe can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Jsw Shoppe 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study JSW Shoppe - A Unique Distribution Model for Branded Steel, Jsw Shoppe 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 .
Weighted SWOT Analysis of JSW Shoppe - A Unique Distribution Model for Branded Steel 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 JSW Shoppe - A Unique Distribution Model for Branded Steel 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 JSW Shoppe - A Unique Distribution Model for Branded Steel 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 JSW Shoppe - A Unique Distribution Model for Branded Steel 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 JSW Shoppe - A Unique Distribution Model for Branded Steel 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 Jsw Shoppe needs to make to build a sustainable competitive advantage.
