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 - – geopolitical disruptions, there is increasing trade war between United States & China, increasing energy prices, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing commodity prices, supply chains are disrupted by pandemic ,
wage bills are increasing, cloud computing is disrupting traditional business models, 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 -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Flipkart Bansal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Flipkart Bansal 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.
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.
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.
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.
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.
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.
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.
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.
Successful track record of launching new products
– Flipkart Bansal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Flipkart Bansal 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.
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.
Diverse revenue streams
– Flipkart Bansal is present in almost all the verticals within the industry. This has provided firm in Flipkart: Transitioning to a Marketplace Model 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.
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.
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 -
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.
Increasing silos among functional specialists
– The organizational structure of Flipkart Bansal is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Flipkart Bansal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Flipkart Bansal to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Flipkart Bansal 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 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.
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.
Interest costs
– Compare to the competition, Flipkart Bansal 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 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.
Slow decision making process
– As mentioned earlier in the report, Flipkart Bansal 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. Flipkart Bansal 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.
Skills based hiring
– The stress on hiring functional specialists at Flipkart Bansal 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.
Products dominated business model
– Even though Flipkart Bansal 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 - Flipkart: Transitioning to a Marketplace Model should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Flipkart Bansal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Flipkart: Transitioning to a Marketplace Model 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 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 -
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.
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. Flipkart Bansal can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Flipkart Bansal to increase its market reach. Flipkart Bansal 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.
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.
Leveraging digital technologies
– Flipkart Bansal 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Flipkart Bansal 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Flipkart Bansal can use these opportunities to build new business models that can help the communities that Flipkart Bansal operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Flipkart Bansal to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Flipkart Bansal is facing challenges because of the dominance of functional experts in the organization. Flipkart: Transitioning to a Marketplace Model 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.
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 .
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.
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.
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 .
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Flipkart Bansal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Flipkart Bansal 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.
Technology acceleration in Forth Industrial Revolution
– Flipkart Bansal has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Flipkart Bansal 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.
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.
Increasing wage structure of Flipkart Bansal
– 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 Flipkart Bansal.
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.