Case Study Description of PrettySecrets.com: Challenges of Selling Lingerie Online
In 2013, the founder and chief executive officer (CEO) of a lingerie business in India has recently moved his business from offline to online in order to reach a wider customer base. The company is one of the very few online lingerie stores in India that also has its own brand. Although the online business is profitable, the CEO cannot ignore the fact that offline stores still dominate the lingerie market in India. Since its key product is only available online, the company may be missing out on an opportunity. Because the shift from an offline business to an online one occurred in 2012, an immediate investment in actual stores will have financial consequences. Should the CEO continue to operate his online business and consider relaunching retail stores at a later time, or should he relaunch now and manage both business models at once? Subhadip Roy is affiliated with Indian Institute of Management Udaipur.
Swot Analysis of "PrettySecrets.com: Challenges of Selling Lingerie Online" written by Subhadip Roy, Nikita Matta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lingerie Online facing as an external strategic factors. Some of the topics covered in PrettySecrets.com: Challenges of Selling Lingerie Online case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the PrettySecrets.com: Challenges of Selling Lingerie Online casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing commodity prices, wage bills are increasing, geopolitical disruptions,
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 PrettySecrets.com: Challenges of Selling Lingerie Online
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in PrettySecrets.com: Challenges of Selling Lingerie Online case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lingerie Online, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online can be done for the following purposes –
1. Strategic planning using facts provided in PrettySecrets.com: Challenges of Selling Lingerie Online case study
2. Improving business portfolio management of Lingerie Online
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 Lingerie Online
Strengths PrettySecrets.com: Challenges of Selling Lingerie Online | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lingerie Online in PrettySecrets.com: Challenges of Selling Lingerie Online Harvard Business Review case study are -
Learning organization
- Lingerie Online 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 Lingerie Online is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in PrettySecrets.com: Challenges of Selling Lingerie Online Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Lingerie Online is one of the most innovative firm in sector. Manager in PrettySecrets.com: Challenges of Selling Lingerie Online Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Lingerie Online 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.
High switching costs
– The high switching costs that Lingerie Online 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.
Low bargaining power of suppliers
– Suppliers of Lingerie Online in the sector have low bargaining power. PrettySecrets.com: Challenges of Selling Lingerie Online has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lingerie Online to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Sales & Marketing field
– Lingerie Online 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 Lingerie Online in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Lingerie Online has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in PrettySecrets.com: Challenges of Selling Lingerie Online 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
– Lingerie Online has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lingerie Online 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.
Analytics focus
– Lingerie Online 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 Subhadip Roy, Nikita Matta 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Lingerie Online digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lingerie Online 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.
Organizational Resilience of Lingerie Online
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lingerie Online does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the PrettySecrets.com: Challenges of Selling Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PrettySecrets.com: Challenges of Selling Lingerie Online are -
No frontier risks strategy
– After analyzing the HBR case study PrettySecrets.com: Challenges of Selling Lingerie Online, 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.
Lack of clear differentiation of Lingerie Online products
– To increase the profitability and margins on the products, Lingerie Online needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Subhadip Roy, Nikita Matta suggests that, Lingerie Online 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.
Skills based hiring
– The stress on hiring functional specialists at Lingerie Online 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.
High operating costs
– Compare to the competitors, firm in the HBR case study PrettySecrets.com: Challenges of Selling Lingerie Online 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 Lingerie Online 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Lingerie Online 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 Lingerie Online, firm in the HBR case study PrettySecrets.com: Challenges of Selling Lingerie Online needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Lingerie Online is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Lingerie Online needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lingerie Online to focus more on services rather than just following the product oriented approach.
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 Lingerie Online supply chain. Even after few cautionary changes mentioned in the HBR case study - PrettySecrets.com: Challenges of Selling Lingerie Online, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lingerie Online vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Lingerie Online 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.
Slow decision making process
– As mentioned earlier in the report, Lingerie Online 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. Lingerie Online 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.
Opportunities PrettySecrets.com: Challenges of Selling Lingerie Online | 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 PrettySecrets.com: Challenges of Selling Lingerie Online are -
Leveraging digital technologies
– Lingerie Online 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.
Loyalty marketing
– Lingerie Online has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lingerie Online in the consumer business. Now Lingerie Online can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Lingerie Online to increase its market reach. Lingerie Online 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.
Buying journey improvements
– Lingerie Online can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. PrettySecrets.com: Challenges of Selling Lingerie Online 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lingerie Online is facing challenges because of the dominance of functional experts in the organization. PrettySecrets.com: Challenges of Selling Lingerie Online 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.
Creating value in data economy
– The success of analytics program of Lingerie Online has opened avenues for new revenue streams for the organization in the industry. This can help Lingerie Online to build a more holistic ecosystem as suggested in the PrettySecrets.com: Challenges of Selling Lingerie Online case study. Lingerie Online can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Lingerie Online 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. Lingerie Online 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.
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 Lingerie Online 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.
Developing new processes and practices
– Lingerie Online 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
– Lingerie Online 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.
Building a culture of innovation
– managers at Lingerie Online 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lingerie Online 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 Lingerie Online to hire the very best people irrespective of their geographical location.
Threats PrettySecrets.com: Challenges of Selling Lingerie Online External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study PrettySecrets.com: Challenges of Selling Lingerie Online are -
Environmental challenges
– Lingerie Online 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. Lingerie Online can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Lingerie Online 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.
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 Lingerie Online.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study PrettySecrets.com: Challenges of Selling Lingerie Online, Lingerie Online 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 .
Consumer confidence and its impact on Lingerie Online 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.
High dependence on third party suppliers
– Lingerie Online 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.
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. Lingerie Online 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.
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.
Shortening product life cycle
– it is one of the major threat that Lingerie Online is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lingerie Online with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Lingerie Online can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Lingerie Online has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online 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 PrettySecrets.com: Challenges of Selling Lingerie Online 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 Lingerie Online needs to make to build a sustainable competitive advantage.