Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2)
This is a Darden case study.Students assume the role of adviser to Anita Roddick, the managing director of The Body Shop, and prepare a three-year forecast of the firm's income statement and balance sheet. Introduces percentage-of-sales forecasting, and walks students through the preparation of a simplified forecast, first using pencil and paper, then a spreadsheet program on a personal computer. Emphasizes the importance of being able to talk plainly about one's financial forecast and the insights that are of use to the general manager.
Authors :: Robert F. Bruner, Robert M. Conroy, Susan Shank, John Vaccaro
Swot Analysis of "Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2)" written by Robert F. Bruner, Robert M. Conroy, Susan Shank, John Vaccaro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Forecast Body facing as an external strategic factors. Some of the topics covered in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) case study are - Strategic Management Strategies, Financial analysis, Forecasting and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, technology disruption, increasing commodity prices, there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Forecast Body, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Forecast Body 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) can be done for the following purposes –
1. Strategic planning using facts provided in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) case study
2. Improving business portfolio management of Forecast Body
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Forecast Body
Strengths Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Forecast Body in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) firm has clearly differentiated products in the market place. This has enabled Forecast Body to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Forecast Body to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Forecast Body 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Forecast Body 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 Forecast Body in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Forecast Body 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Forecast Body has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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.
Learning organization
- Forecast Body 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 Forecast Body is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Forecast Body is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Forecast Body 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.
Innovation driven organization
– Forecast Body is one of the most innovative firm in sector. Manager in Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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.
Low bargaining power of suppliers
– Suppliers of Forecast Body in the sector have low bargaining power. Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Forecast Body to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Forecast Body has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Forecast Body 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.
Weaknesses Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) are -
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 Forecast Body supply chain. Even after few cautionary changes mentioned in the HBR case study - Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Forecast Body vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2), in the dynamic environment Forecast Body has struggled to respond to the nimble upstart competition. Forecast Body has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Forecast Body 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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 Forecast Body 's lucrative customers.
Slow to strategic competitive environment developments
– As Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) HBR case study mentions - Forecast Body 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.
High cash cycle compare to competitors
Forecast Body 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.
No frontier risks strategy
– After analyzing the HBR case study Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Interest costs
– Compare to the competition, Forecast Body 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.
Low market penetration in new markets
– Outside its home market of Forecast Body, firm in the HBR case study Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Forecast Body 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.
Increasing silos among functional specialists
– The organizational structure of Forecast Body is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Forecast Body needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Forecast Body to focus more on services rather than just following the product oriented approach.
Opportunities Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) | 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Forecast Body is facing challenges because of the dominance of functional experts in the organization. Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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.
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. Forecast Body 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 Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Forecast Body 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. Forecast Body 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 Forecast Body 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Forecast Body 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 Forecast Body to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Forecast Body 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.
Developing new processes and practices
– Forecast Body can develop new processes and procedures in Finance & Accounting 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 Forecast Body in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Forecast Body 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.
Using analytics as competitive advantage
– Forecast Body 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Forecast Body 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, Forecast Body 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, Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Forecast Body 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 Forecast Body to increase its market reach. Forecast Body 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.
Threats Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) are -
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 Forecast Body business can come under increasing regulations regarding data privacy, data security, etc.
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.
Increasing wage structure of Forecast Body
– 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 Forecast Body.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Forecast Body in the Finance & Accounting industry. The Finance & Accounting 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.
Environmental challenges
– Forecast Body 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. Forecast Body can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– Forecast Body 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 Finance & Accounting industry regulations.
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. Forecast Body 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.
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 Forecast Body in the Finance & Accounting sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Forecast Body is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Forecast Body 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2), Forecast Body may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Technology acceleration in Forth Industrial Revolution
– Forecast Body has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Forecast Body needs to keep up with the evolution of technology in the Finance & Accounting 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.
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. Forecast Body needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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 Body Shop International PLC 2001: An Introduction to Financial Modeling (v. 1.2) 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 Forecast Body needs to make to build a sustainable competitive advantage.
