Ferns N Petals: Flowering Through a Unique Franchising Model SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ferns N Petals: Flowering Through a Unique Franchising Model
The successful rise of Ferns N Petals, a branded flower boutique, coincided with the post-liberalization retail boom in India, a period of rapid growth for organized modern retailing, including online retailing. As the economy grew, disposable incomes rose, driving demographic and lifestyle changes and fuelling aspirations. The Ferns N Petals chain tapped franchisees aggressively. In a predominantly unorganized and localized market, the company successfully convinced potential franchisees to become part of the chain of nationwide branded stores. However, Ferns N Petals' unique franchising business model faced many challenges - including creating and sustaining volume growth for franchisees while continuing to widen and deepen its retail footprint and replicating its model in the high-priced, highly skill-oriented and competitive wedding segment. V.V. Gopal is affiliated with University, Bangalor. Suresh Kerani is affiliated with Vignana Jyothi Institute of Management. Balakrishnan Kondath is affiliated with IBS Business School.
Authors :: V. V. Gopal, Suresh Kerani, Balakrishnan Kondath
Swot Analysis of "Ferns N Petals: Flowering Through a Unique Franchising Model" written by V. V. Gopal, Suresh Kerani, Balakrishnan Kondath includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ferns Petals facing as an external strategic factors. Some of the topics covered in Ferns N Petals: Flowering Through a Unique Franchising Model case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Ferns N Petals: Flowering Through a Unique Franchising Model casestudy better are - – challanges to central banks by blockchain based private currencies, increasing energy prices, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing commodity prices, technology disruption, increasing government debt because of Covid-19 spendings,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Ferns N Petals: Flowering Through a Unique Franchising Model
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ferns N Petals: Flowering Through a Unique Franchising Model case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ferns Petals, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ferns Petals 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 Ferns N Petals: Flowering Through a Unique Franchising Model can be done for the following purposes –
1. Strategic planning using facts provided in Ferns N Petals: Flowering Through a Unique Franchising Model case study
2. Improving business portfolio management of Ferns Petals
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 Ferns Petals
Strengths Ferns N Petals: Flowering Through a Unique Franchising Model | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ferns Petals in Ferns N Petals: Flowering Through a Unique Franchising Model Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Ferns Petals digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ferns Petals 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 lead change in Sales & Marketing field
– Ferns Petals 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 Ferns Petals in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Ferns Petals is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Ferns Petals
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ferns Petals does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Ferns Petals 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 V. V. Gopal, Suresh Kerani, Balakrishnan Kondath 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.
Highly skilled collaborators
– Ferns Petals 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 Ferns N Petals: Flowering Through a Unique Franchising Model HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Ferns Petals in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Ferns N Petals: Flowering Through a Unique Franchising Model Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Ferns Petals is present in almost all the verticals within the industry. This has provided firm in Ferns N Petals: Flowering Through a Unique Franchising 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Ferns N Petals: Flowering Through a Unique Franchising Model firm has clearly differentiated products in the market place. This has enabled Ferns Petals to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Ferns Petals to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Ferns Petals in the sector have low bargaining power. Ferns N Petals: Flowering Through a Unique Franchising Model has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ferns Petals to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Ferns Petals is one of the leading recruiters in the industry. Managers in the Ferns N Petals: Flowering Through a Unique Franchising 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.
Weaknesses Ferns N Petals: Flowering Through a Unique Franchising Model | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ferns N Petals: Flowering Through a Unique Franchising Model are -
Slow to strategic competitive environment developments
– As Ferns N Petals: Flowering Through a Unique Franchising Model HBR case study mentions - Ferns Petals 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.
Products dominated business model
– Even though Ferns Petals 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 - Ferns N Petals: Flowering Through a Unique Franchising Model should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Ferns Petals 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ferns N Petals: Flowering Through a Unique Franchising Model, is just above the industry average. Ferns Petals 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 Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns N Petals: Flowering Through a Unique Franchising Model can leverage the sales team experience to cultivate customer relationships as Ferns Petals is planning to shift buying processes online.
Interest costs
– Compare to the competition, Ferns Petals 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 star products
– The top 2 products and services of the firm as mentioned in the Ferns N Petals: Flowering Through a Unique Franchising Model 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 Ferns Petals has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, V. V. Gopal, Suresh Kerani, Balakrishnan Kondath suggests that, Ferns Petals 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.
Slow decision making process
– As mentioned earlier in the report, Ferns Petals 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. Ferns Petals 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.
High cash cycle compare to competitors
Ferns Petals 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.
Increasing silos among functional specialists
– The organizational structure of Ferns Petals is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Ferns Petals needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ferns Petals to focus more on services rather than just following the product oriented approach.
Opportunities Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns N Petals: Flowering Through a Unique Franchising Model are -
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. Ferns Petals can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Ferns Petals can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Ferns Petals 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.
Using analytics as competitive advantage
– Ferns Petals 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 Ferns N Petals: Flowering Through a Unique Franchising Model - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ferns Petals to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ferns Petals 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, Ferns N Petals: Flowering Through a Unique Franchising Model, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ferns Petals 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ferns Petals can use these opportunities to build new business models that can help the communities that Ferns Petals operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Loyalty marketing
– Ferns Petals 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.
Creating value in data economy
– The success of analytics program of Ferns Petals has opened avenues for new revenue streams for the organization in the industry. This can help Ferns Petals to build a more holistic ecosystem as suggested in the Ferns N Petals: Flowering Through a Unique Franchising Model case study. Ferns Petals can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ferns Petals can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Ferns Petals 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.
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. Ferns Petals 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. Ferns Petals 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ferns Petals 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 Ferns Petals to hire the very best people irrespective of their geographical location.
Threats Ferns N Petals: Flowering Through a Unique Franchising Model External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ferns N Petals: Flowering Through a Unique Franchising Model are -
High dependence on third party suppliers
– Ferns Petals 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. Ferns Petals 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.
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 Ferns Petals.
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. Ferns Petals can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Ferns Petals 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ferns Petals 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 Ferns Petals is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ferns Petals 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 Ferns N Petals: Flowering Through a Unique Franchising Model .
Environmental challenges
– Ferns Petals 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. Ferns Petals can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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 Ferns Petals 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 Ferns Petals in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Ferns Petals has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Ferns Petals 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 Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns N Petals: Flowering Through a Unique Franchising 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 Ferns Petals needs to make to build a sustainable competitive advantage.
