Alessi: Evolution of an Italian Design Factory (A), Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Alessi: Evolution of an Italian Design Factory (A), Spanish Version
To maximize their effectiveness, color cases should be printed in color.Alessio Alessi, head of distribution at family-run Alessi S.p.A., is facing price and brand confusion among customers and is considering reorganizing Alessi's worldwide network of distributors. By describing the challenges facing Alessi, an internationally acclaimed design and manufacturing company of household objects for the table and kitchen, the case examines consumer marketing and distribution in general, as applied in the niche market of highly designed household goods for an Italian design factory. Includes color exhibits.
Swot Analysis of "Alessi: Evolution of an Italian Design Factory (A), Spanish Version" written by Youngme Moon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alessi Household facing as an external strategic factors. Some of the topics covered in Alessi: Evolution of an Italian Design Factory (A), Spanish Version case study are - Strategic Management Strategies, Design, Product development, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Alessi: Evolution of an Italian Design Factory (A), Spanish Version casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Alessi: Evolution of an Italian Design Factory (A), Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alessi: Evolution of an Italian Design Factory (A), Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alessi Household, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alessi Household 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Alessi: Evolution of an Italian Design Factory (A), Spanish Version case study
2. Improving business portfolio management of Alessi Household
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 Alessi Household
Strengths Alessi: Evolution of an Italian Design Factory (A), Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alessi Household in Alessi: Evolution of an Italian Design Factory (A), Spanish Version Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Alessi Household 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Alessi: Evolution of an Italian Design Factory (A), Spanish Version firm has clearly differentiated products in the market place. This has enabled Alessi Household to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Alessi Household to invest into research and development (R&D) and innovation.
Innovation driven organization
– Alessi Household is one of the most innovative firm in sector. Manager in Alessi: Evolution of an Italian Design Factory (A), Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Alessi Household is present in almost all the verticals within the industry. This has provided firm in Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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.
High brand equity
– Alessi Household has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alessi Household to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Alessi Household 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 Youngme Moon 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.
Highly skilled collaborators
– Alessi Household 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Alessi Household 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.
Superior customer experience
– The customer experience strategy of Alessi Household in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Alessi Household 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 Alessi Household is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alessi: Evolution of an Italian Design Factory (A), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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.
Low bargaining power of suppliers
– Suppliers of Alessi Household in the sector have low bargaining power. Alessi: Evolution of an Italian Design Factory (A), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alessi Household to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Alessi: Evolution of an Italian Design Factory (A), Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alessi: Evolution of an Italian Design Factory (A), Spanish Version are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alessi: Evolution of an Italian Design Factory (A), Spanish Version, in the dynamic environment Alessi Household has struggled to respond to the nimble upstart competition. Alessi Household has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi Household 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Alessi Household has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Alessi Household even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi Household has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Alessi: Evolution of an Italian Design Factory (A), Spanish Version HBR case study mentions - Alessi Household 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.
Interest costs
– Compare to the competition, Alessi Household 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.
Products dominated business model
– Even though Alessi Household has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Alessi: Evolution of an Italian Design Factory (A), Spanish Version should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Alessi Household is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Alessi Household needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alessi Household to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Alessi Household has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Alessi Household 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alessi Household is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alessi: Evolution of an Italian Design Factory (A), Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Alessi: Evolution of an Italian Design Factory (A), Spanish Version | 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version are -
Building a culture of innovation
– managers at Alessi Household 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.
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. Alessi Household can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Alessi Household 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, Alessi: Evolution of an Italian Design Factory (A), Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Alessi Household can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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.
Developing new processes and practices
– Alessi Household 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.
Loyalty marketing
– Alessi Household 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.
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 Alessi Household in the consumer business. Now Alessi Household can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Alessi Household to increase its market reach. Alessi Household 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.
Learning at scale
– Online learning technologies has now opened space for Alessi Household 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alessi Household can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Alessi Household 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alessi Household 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alessi Household 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 Alessi Household to hire the very best people irrespective of their geographical location.
Threats Alessi: Evolution of an Italian Design Factory (A), Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alessi: Evolution of an Italian Design Factory (A), Spanish Version are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alessi Household with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Alessi Household 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. Alessi Household can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alessi Household 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 dependence on third party suppliers
– Alessi Household 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, Alessi Household 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version .
Increasing wage structure of Alessi Household
– 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 Alessi Household.
Shortening product life cycle
– it is one of the major threat that Alessi Household 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.
Technology acceleration in Forth Industrial Revolution
– Alessi Household has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Alessi Household 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.
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 Alessi Household.
Stagnating economy with rate increase
– Alessi Household 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.
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. Alessi Household can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Alessi Household needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi: Evolution of an Italian Design Factory (A), Spanish Version 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 Alessi Household needs to make to build a sustainable competitive advantage.
