Developing the Sales Force, Growing the Business: The Direct Selling Experience SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Developing the Sales Force, Growing the Business: The Direct Selling Experience
With worldwide sales topping $85 billion, the scope and scale of direct selling warrants greater understanding of its chief asset: the sales representative. Self-employed individuals, these reps are instrumental to their firms' success and growth. Interviews with direct selling executives have helped identify universally applicable sales force success variables: selecting the right individuals, maintaining their motivation, developing the appropriate skills, and providing high perceived value and supply. With an independent sales force framework, it is imperative for direct selling firms to implement programs that aid in finding and keeping strong individual sellers.
Authors :: Victoria L. Crittenden, William F. Crittenden
Swot Analysis of "Developing the Sales Force, Growing the Business: The Direct Selling Experience" written by Victoria L. Crittenden, William F. Crittenden includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Direct Selling facing as an external strategic factors. Some of the topics covered in Developing the Sales Force, Growing the Business: The Direct Selling Experience case study are - Strategic Management Strategies, Hiring, Marketing, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Developing the Sales Force, Growing the Business: The Direct Selling Experience casestudy better are - – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, increasing energy prices,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Developing the Sales Force, Growing the Business: The Direct Selling Experience
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Developing the Sales Force, Growing the Business: The Direct Selling Experience case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Direct Selling, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Direct Selling 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience can be done for the following purposes –
1. Strategic planning using facts provided in Developing the Sales Force, Growing the Business: The Direct Selling Experience case study
2. Improving business portfolio management of Direct Selling
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 Direct Selling
Strengths Developing the Sales Force, Growing the Business: The Direct Selling Experience | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Direct Selling in Developing the Sales Force, Growing the Business: The Direct Selling Experience Harvard Business Review case study are -
Learning organization
- Direct Selling 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 Direct Selling is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Developing the Sales Force, Growing the Business: The Direct Selling Experience Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Sales & Marketing industry
– Developing the Sales Force, Growing the Business: The Direct Selling Experience firm has clearly differentiated products in the market place. This has enabled Direct Selling to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Direct Selling to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Direct Selling 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.
Diverse revenue streams
– Direct Selling is present in almost all the verticals within the industry. This has provided firm in Developing the Sales Force, Growing the Business: The Direct Selling Experience 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.
Highly skilled collaborators
– Direct Selling 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Direct Selling 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Direct Selling digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Direct Selling 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.
Innovation driven organization
– Direct Selling is one of the most innovative firm in sector. Manager in Developing the Sales Force, Growing the Business: The Direct Selling Experience Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Direct Selling in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Direct Selling in the sector have low bargaining power. Developing the Sales Force, Growing the Business: The Direct Selling Experience has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Direct Selling to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Direct Selling 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Developing the Sales Force, Growing the Business: The Direct Selling Experience 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.
Weaknesses Developing the Sales Force, Growing the Business: The Direct Selling Experience | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Developing the Sales Force, Growing the Business: The Direct Selling Experience are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Direct Selling is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Developing the Sales Force, Growing the Business: The Direct Selling Experience can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Developing the Sales Force, Growing the Business: The Direct Selling Experience, is just above the industry average. Direct Selling needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Developing the Sales Force, Growing the Business: The Direct Selling Experience, it seems that the employees of Direct Selling 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.
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 Direct Selling supply chain. Even after few cautionary changes mentioned in the HBR case study - Developing the Sales Force, Growing the Business: The Direct Selling Experience, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Direct Selling vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Direct Selling is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Direct Selling needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Direct Selling to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Direct Selling 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Direct Selling 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.
Low market penetration in new markets
– Outside its home market of Direct Selling, firm in the HBR case study Developing the Sales Force, Growing the Business: The Direct Selling Experience needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience can leverage the sales team experience to cultivate customer relationships as Direct Selling is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Direct Selling 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.
Slow to strategic competitive environment developments
– As Developing the Sales Force, Growing the Business: The Direct Selling Experience HBR case study mentions - Direct Selling 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.
Opportunities Developing the Sales Force, Growing the Business: The Direct Selling Experience | 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Direct Selling in the consumer business. Now Direct Selling can target international markets with far fewer capital restrictions requirements than the existing system.
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. Direct Selling 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 Direct Selling to increase its market reach. Direct Selling 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.
Developing new processes and practices
– Direct Selling 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Direct Selling 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.
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. Direct Selling can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Direct Selling 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. Direct Selling 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Direct Selling 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, Developing the Sales Force, Growing the Business: The Direct Selling Experience, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Direct Selling 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.
Learning at scale
– Online learning technologies has now opened space for Direct Selling 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 Direct Selling can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Direct Selling 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Direct Selling 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.
Threats Developing the Sales Force, Growing the Business: The Direct Selling Experience External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Developing the Sales Force, Growing the Business: The Direct Selling Experience are -
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. Direct Selling needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Direct Selling.
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 Direct Selling in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Direct Selling is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Direct Selling 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
– Direct Selling 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. Direct Selling can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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. Direct Selling 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Direct Selling 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Direct Selling with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Direct Selling
– 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 Direct Selling.
Regulatory challenges
– Direct Selling 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 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
– Direct Selling has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Direct Selling 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.
Weighted SWOT Analysis of Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Developing the Sales Force, Growing the Business: The Direct Selling Experience 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 Direct Selling needs to make to build a sustainable competitive advantage.
