Case Study Description of Redirecting Direct Selling: High-Touch Embraces High-Tech
Direct selling, defined as a sales channel without a fixed retail location, was built on the premise of leveraging an individual's social networks. This industry is being redirected by embracing social media; here, the challenge lies in providing the benefits of face-to-face selling, augmented by social media. An examination of the Direct Selling News 'Global 100 Top Direct Sellers' found that Facebook, YouTube, and Twitter represent the most widely employed social networks in the industry. While 76% of direct sellers utilize social media for promotional purposes, 55% use it for recruiting new distributors and 42% use it for reactive purposes. Consumers are the most popular target for social media, followed by distributors and communities. Social media has evolved as a driver of strategy, and will become even more important in the future. Improved customer relationships are developing by listening and reacting to concerns. The transparency created by social media is enhancing trust and ethical organizational cultures. Finally, consumer brand communities are emerging that increase brand value.
Swot Analysis of "Redirecting Direct Selling: High-Touch Embraces High-Tech" written by Linda Ferrell, O.C. Ferrell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Social Media facing as an external strategic factors. Some of the topics covered in Redirecting Direct Selling: High-Touch Embraces High-Tech case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Redirecting Direct Selling: High-Touch Embraces High-Tech casestudy better are - – supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing commodity prices, there is backlash against globalization, 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,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Redirecting Direct Selling: High-Touch Embraces High-Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Redirecting Direct Selling: High-Touch Embraces High-Tech case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Social Media, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Social Media 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 Redirecting Direct Selling: High-Touch Embraces High-Tech can be done for the following purposes –
1. Strategic planning using facts provided in Redirecting Direct Selling: High-Touch Embraces High-Tech case study
2. Improving business portfolio management of Social Media
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 Social Media
Strengths Redirecting Direct Selling: High-Touch Embraces High-Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Social Media in Redirecting Direct Selling: High-Touch Embraces High-Tech Harvard Business Review case study are -
Strong track record of project management
– Social Media is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Social Media has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Social Media 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
– Social Media 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 Linda Ferrell, O.C. Ferrell 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.
Operational resilience
– The operational resilience strategy in the Redirecting Direct Selling: High-Touch Embraces High-Tech 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Redirecting Direct Selling: High-Touch Embraces High-Tech firm has clearly differentiated products in the market place. This has enabled Social Media to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Social Media to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Social Media is present in almost all the verticals within the industry. This has provided firm in Redirecting Direct Selling: High-Touch Embraces High-Tech 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.
Ability to recruit top talent
– Social Media is one of the leading recruiters in the industry. Managers in the Redirecting Direct Selling: High-Touch Embraces High-Tech are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Social Media has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Redirecting Direct Selling: High-Touch Embraces High-Tech 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Social Media digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Social Media 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.
Highly skilled collaborators
– Social Media 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 Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Social Media 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.
Effective Research and Development (R&D)
– Social Media 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 Redirecting Direct Selling: High-Touch Embraces High-Tech - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Redirecting Direct Selling: High-Touch Embraces High-Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Redirecting Direct Selling: High-Touch Embraces High-Tech are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Redirecting Direct Selling: High-Touch Embraces High-Tech, it seems that the employees of Social Media 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Redirecting Direct Selling: High-Touch Embraces High-Tech, is just above the industry average. Social Media 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.
Aligning sales with marketing
– It come across in the case study Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Redirecting Direct Selling: High-Touch Embraces High-Tech can leverage the sales team experience to cultivate customer relationships as Social Media is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Social Media is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Redirecting Direct Selling: High-Touch Embraces High-Tech can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Social Media 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.
Need for greater diversity
– Social Media 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Redirecting Direct Selling: High-Touch Embraces High-Tech HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Social Media has relatively successful track record of launching new products.
Lack of clear differentiation of Social Media products
– To increase the profitability and margins on the products, Social Media needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Social Media 's lucrative customers.
Products dominated business model
– Even though Social Media 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 - Redirecting Direct Selling: High-Touch Embraces High-Tech should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Redirecting Direct Selling: High-Touch Embraces High-Tech, in the dynamic environment Social Media has struggled to respond to the nimble upstart competition. Social Media has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Redirecting Direct Selling: High-Touch Embraces High-Tech | 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 Redirecting Direct Selling: High-Touch Embraces High-Tech are -
Creating value in data economy
– The success of analytics program of Social Media has opened avenues for new revenue streams for the organization in the industry. This can help Social Media to build a more holistic ecosystem as suggested in the Redirecting Direct Selling: High-Touch Embraces High-Tech case study. Social Media can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Social Media is facing challenges because of the dominance of functional experts in the organization. Redirecting Direct Selling: High-Touch Embraces High-Tech 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Social Media 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, Redirecting Direct Selling: High-Touch Embraces High-Tech, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Social Media 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Social Media 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.
Manufacturing automation
– Social Media 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.
Developing new processes and practices
– Social Media 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.
Learning at scale
– Online learning technologies has now opened space for Social Media 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.
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. Social Media can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Social Media 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 Social Media to hire the very best people irrespective of their geographical location.
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. Social Media can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Social Media can use these opportunities to build new business models that can help the communities that Social Media operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Using analytics as competitive advantage
– Social Media 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 Redirecting Direct Selling: High-Touch Embraces High-Tech - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Social Media to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Redirecting Direct Selling: High-Touch Embraces High-Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Redirecting Direct Selling: High-Touch Embraces High-Tech are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Redirecting Direct Selling: High-Touch Embraces High-Tech, Social Media may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Social Media.
Consumer confidence and its impact on Social Media 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.
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.
Stagnating economy with rate increase
– Social Media 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.
Technology acceleration in Forth Industrial Revolution
– Social Media has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Social Media 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.
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 Social Media 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. Social Media needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Environmental challenges
– Social Media 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. Social Media can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Social Media is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Social Media can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Social Media with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Weighted SWOT Analysis of Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Redirecting Direct Selling: High-Touch Embraces High-Tech 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 Social Media needs to make to build a sustainable competitive advantage.
