Alessi: Evolution of an Italian Design Factory (B) 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 (B)
To maximize their effectiveness, color cases should be printed in color.Since the 1970s, world-renowned architect and designer, Alessandro Mendini, has acted as adviser and counselor to Alessi, the Italian household goods design factory. By discussing Mendini's role as art director, the case introduces the artistic side of Alessi, where design ambitions need to be balanced with business considerations. Includes color exhibits.
Authors :: Youngme Moon, Vincent Dessain, Anders Sjoman
Swot Analysis of "Alessi: Evolution of an Italian Design Factory (B)" written by Youngme Moon, Vincent Dessain, Anders Sjoman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alessi Italian facing as an external strategic factors. Some of the topics covered in Alessi: Evolution of an Italian Design Factory (B) case study are - Strategic Management Strategies, Creativity, 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 (B) casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Alessi: Evolution of an Italian Design Factory (B)
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 (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alessi Italian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alessi Italian 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 (B) can be done for the following purposes –
1. Strategic planning using facts provided in Alessi: Evolution of an Italian Design Factory (B) case study
2. Improving business portfolio management of Alessi Italian
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 Italian
Strengths Alessi: Evolution of an Italian Design Factory (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alessi Italian in Alessi: Evolution of an Italian Design Factory (B) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Alessi: Evolution of an Italian Design Factory (B) 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.
Ability to lead change in Sales & Marketing field
– Alessi Italian 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 Alessi Italian in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Alessi Italian has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alessi Italian 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Alessi Italian digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alessi Italian 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.
Strong track record of project management
– Alessi Italian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– Alessi: Evolution of an Italian Design Factory (B) firm has clearly differentiated products in the market place. This has enabled Alessi Italian to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Alessi Italian to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Alessi Italian in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Alessi Italian 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 Alessi: Evolution of an Italian Design Factory (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Alessi Italian is one of the most innovative firm in sector. Manager in Alessi: Evolution of an Italian Design Factory (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Alessi Italian 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, Vincent Dessain, Anders Sjoman 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.
Low bargaining power of suppliers
– Suppliers of Alessi Italian in the sector have low bargaining power. Alessi: Evolution of an Italian Design Factory (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alessi Italian to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Alessi Italian is present in almost all the verticals within the industry. This has provided firm in Alessi: Evolution of an Italian Design Factory (B) 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.
Weaknesses Alessi: Evolution of an Italian Design Factory (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alessi: Evolution of an Italian Design Factory (B) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Alessi: Evolution of an Italian Design Factory (B), is just above the industry average. Alessi Italian 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Alessi: Evolution of an Italian Design Factory (B) 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 Italian 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Alessi: Evolution of an Italian Design Factory (B) 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 Alessi: Evolution of an Italian Design Factory (B) can leverage the sales team experience to cultivate customer relationships as Alessi Italian is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alessi Italian 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 (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 (B) 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 Italian has relatively successful track record of launching new products.
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 (B), in the dynamic environment Alessi Italian has struggled to respond to the nimble upstart competition. Alessi Italian has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Alessi: Evolution of an Italian Design Factory (B), 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.
Increasing silos among functional specialists
– The organizational structure of Alessi Italian is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Alessi Italian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alessi Italian to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Alessi Italian 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Youngme Moon, Vincent Dessain, Anders Sjoman suggests that, Alessi Italian is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Alessi: Evolution of an Italian Design Factory (B), it seems that the employees of Alessi Italian 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 Alessi: Evolution of an Italian Design Factory (B) | 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 (B) are -
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 Italian in the consumer business. Now Alessi Italian can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alessi Italian 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.
Better consumer reach
– The expansion of the 5G network will help Alessi Italian to increase its market reach. Alessi Italian 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, Alessi Italian 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 (B), 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 Italian can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alessi: Evolution of an Italian Design Factory (B) 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 Alessi Italian has opened avenues for new revenue streams for the organization in the industry. This can help Alessi Italian to build a more holistic ecosystem as suggested in the Alessi: Evolution of an Italian Design Factory (B) case study. Alessi Italian can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alessi Italian is facing challenges because of the dominance of functional experts in the organization. Alessi: Evolution of an Italian Design Factory (B) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alessi Italian can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Alessi Italian 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alessi Italian can use these opportunities to build new business models that can help the communities that Alessi Italian operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alessi Italian 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 Italian to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Alessi Italian 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.
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. Alessi Italian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Alessi: Evolution of an Italian Design Factory (B) 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 (B) are -
Regulatory challenges
– Alessi Italian 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.
Technology acceleration in Forth Industrial Revolution
– Alessi Italian has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Alessi Italian 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.
Increasing wage structure of Alessi Italian
– 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 Italian.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alessi: Evolution of an Italian Design Factory (B), Alessi Italian 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 .
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 Italian.
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 Italian 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, Alessi Italian 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 (B) .
Stagnating economy with rate increase
– Alessi Italian 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.
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 Alessi Italian business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Alessi Italian is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Alessi Italian 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 Italian can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alessi Italian with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Alessi Italian 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.
Weighted SWOT Analysis of Alessi: Evolution of an Italian Design Factory (B) 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 (B) 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 (B) 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 (B) 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 (B) 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 Italian needs to make to build a sustainable competitive advantage.
