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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing transportation and logistics costs, geopolitical disruptions, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
technology disruption, there is increasing trade war between United States & China, 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 -
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.
Learning organization
- Jsw Shoppe 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 Jsw Shoppe is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in JSW Shoppe - A Unique Distribution Model for Branded Steel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Jsw Shoppe in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
Ability to lead change in Sales & Marketing field
– Jsw Shoppe 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 Jsw Shoppe in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Diverse revenue streams
– Jsw Shoppe is present in almost all the verticals within the industry. This has provided firm in JSW Shoppe - A Unique Distribution Model for Branded Steel 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.
Training and development
– Jsw Shoppe has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in JSW Shoppe - A Unique Distribution Model for Branded Steel 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.
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.
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 -
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.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Jsw Shoppe is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Jsw Shoppe needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jsw Shoppe to focus more on services rather than just following the product oriented approach.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Jsw Shoppe supply chain. Even after few cautionary changes mentioned in the HBR case study - JSW Shoppe - A Unique Distribution Model for Branded Steel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jsw Shoppe vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study JSW Shoppe - A Unique Distribution Model for Branded Steel, in the dynamic environment Jsw Shoppe has struggled to respond to the nimble upstart competition. Jsw Shoppe 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 JSW Shoppe - A Unique Distribution Model for Branded Steel 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 Jsw Shoppe has relatively successful track record of launching new products.
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.
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 -
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.
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.
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.
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.
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.
Building a culture of innovation
– managers at Jsw Shoppe 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.
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.
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. Jsw Shoppe can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jsw Shoppe is facing challenges because of the dominance of functional experts in the organization. JSW Shoppe - A Unique Distribution Model for Branded Steel case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jsw Shoppe 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.
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.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jsw Shoppe 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.
Technology acceleration in Forth Industrial Revolution
– Jsw Shoppe has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Jsw Shoppe 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 Jsw Shoppe in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
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.
Regulatory challenges
– Jsw Shoppe 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jsw Shoppe with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Jsw Shoppe needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Jsw Shoppe demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.