Flipkart: Transitioning to a Marketplace Model SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Flipkart: Transitioning to a Marketplace Model
Sachin Bansal and Binny Bansal, co-founders of India's largest e-commerce company, Flipkart, were reviewing the foregoing Facebook post, which had gone viral and received more than 20,000 likes. A third-party seller listed a pair of women's sandals on Flipkart's website at 799 Indian rupees and offered it on promotion at 399. However, upon close examination of the product's display photo, consumers noticed a 399 price tag printed on the strap. Consistent with stated goals of transparency and building trusted relationships with customers, the Bansals immediately drafted an apology and terminated the seller's agreement with Flipkart.
Authors :: Das Narayandas, Sunil Gupta, Rachna Tahilyani
Swot Analysis of "Flipkart: Transitioning to a Marketplace Model" written by Das Narayandas, Sunil Gupta, Rachna Tahilyani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Flipkart Bansal facing as an external strategic factors. Some of the topics covered in Flipkart: Transitioning to a Marketplace Model case study are - Strategic Management Strategies, Ethics, IT, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Flipkart: Transitioning to a Marketplace Model casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, technology disruption,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Flipkart: Transitioning to a Marketplace Model
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Flipkart: Transitioning to a Marketplace Model case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Flipkart Bansal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Flipkart Bansal 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 Flipkart: Transitioning to a Marketplace Model can be done for the following purposes –
1. Strategic planning using facts provided in Flipkart: Transitioning to a Marketplace Model case study
2. Improving business portfolio management of Flipkart Bansal
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 Flipkart Bansal
Strengths Flipkart: Transitioning to a Marketplace Model | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Flipkart Bansal in Flipkart: Transitioning to a Marketplace Model Harvard Business Review case study are -
Ability to lead change in Sales & Marketing field
– Flipkart Bansal 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 Flipkart Bansal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Flipkart Bansal 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 Flipkart Bansal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Flipkart: Transitioning to a Marketplace Model Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Flipkart Bansal
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Flipkart Bansal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Flipkart Bansal 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.
Training and development
– Flipkart Bansal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Flipkart: Transitioning to a Marketplace Model 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.
Cross disciplinary teams
– Horizontal connected teams at the Flipkart Bansal 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
– Flipkart: Transitioning to a Marketplace Model firm has clearly differentiated products in the market place. This has enabled Flipkart Bansal to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Flipkart Bansal to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Flipkart: Transitioning to a Marketplace Model 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.
Analytics focus
– Flipkart Bansal 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 Das Narayandas, Sunil Gupta, Rachna Tahilyani 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
– Flipkart Bansal is one of the leading recruiters in the industry. Managers in the Flipkart: Transitioning to a Marketplace Model are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Flipkart Bansal is one of the most innovative firm in sector. Manager in Flipkart: Transitioning to a Marketplace Model Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Flipkart Bansal in the sector have low bargaining power. Flipkart: Transitioning to a Marketplace Model has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Flipkart Bansal to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Flipkart: Transitioning to a Marketplace Model | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Flipkart: Transitioning to a Marketplace Model are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Flipkart: Transitioning to a Marketplace Model, is just above the industry average. Flipkart Bansal 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 bargaining power of channel partners
– Because of the regulatory requirements, Das Narayandas, Sunil Gupta, Rachna Tahilyani suggests that, Flipkart Bansal 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Flipkart Bansal needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study Flipkart: Transitioning to a Marketplace Model 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 Flipkart: Transitioning to a Marketplace Model can leverage the sales team experience to cultivate customer relationships as Flipkart Bansal is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Flipkart Bansal has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Flipkart Bansal, firm in the HBR case study Flipkart: Transitioning to a Marketplace Model needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Flipkart Bansal products
– To increase the profitability and margins on the products, Flipkart Bansal needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Flipkart Bansal supply chain. Even after few cautionary changes mentioned in the HBR case study - Flipkart: Transitioning to a Marketplace Model, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Flipkart Bansal vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Flipkart: Transitioning to a Marketplace Model 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 Flipkart Bansal 's lucrative customers.
Slow to strategic competitive environment developments
– As Flipkart: Transitioning to a Marketplace Model HBR case study mentions - Flipkart Bansal 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.
Need for greater diversity
– Flipkart Bansal 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.
Opportunities Flipkart: Transitioning to a Marketplace Model | 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 Flipkart: Transitioning to a Marketplace Model are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Flipkart Bansal 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.
Learning at scale
– Online learning technologies has now opened space for Flipkart Bansal 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.
Creating value in data economy
– The success of analytics program of Flipkart Bansal has opened avenues for new revenue streams for the organization in the industry. This can help Flipkart Bansal to build a more holistic ecosystem as suggested in the Flipkart: Transitioning to a Marketplace Model case study. Flipkart Bansal 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 Flipkart Bansal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Flipkart Bansal has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Flipkart: Transitioning to a Marketplace Model - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Flipkart Bansal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Flipkart Bansal 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. Flipkart Bansal 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.
Developing new processes and practices
– Flipkart Bansal 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.
Manufacturing automation
– Flipkart Bansal 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.
Loyalty marketing
– Flipkart Bansal 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.
Building a culture of innovation
– managers at Flipkart Bansal 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.
Buying journey improvements
– Flipkart Bansal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Flipkart: Transitioning to a Marketplace Model 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.
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 Flipkart Bansal in the consumer business. Now Flipkart Bansal can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Flipkart Bansal 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, Flipkart: Transitioning to a Marketplace Model, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Flipkart: Transitioning to a Marketplace Model External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Flipkart: Transitioning to a Marketplace Model are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Flipkart Bansal 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 Flipkart: Transitioning to a Marketplace Model .
Regulatory challenges
– Flipkart Bansal 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.
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.
Stagnating economy with rate increase
– Flipkart Bansal 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.
Environmental challenges
– Flipkart Bansal 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. Flipkart Bansal can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High dependence on third party suppliers
– Flipkart Bansal 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Flipkart: Transitioning to a Marketplace Model, Flipkart Bansal 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 .
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 Flipkart Bansal in the Sales & Marketing sector and impact the bottomline of the organization.
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. Flipkart Bansal needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Flipkart Bansal is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Flipkart Bansal 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.
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 Flipkart Bansal business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Flipkart Bansal 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.
Weighted SWOT Analysis of Flipkart: Transitioning to a Marketplace Model 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 Flipkart: Transitioning to a Marketplace Model 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 Flipkart: Transitioning to a Marketplace Model 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 Flipkart: Transitioning to a Marketplace Model 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 Flipkart: Transitioning to a Marketplace Model 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 Flipkart Bansal needs to make to build a sustainable competitive advantage.