Hartalega: Taking off the Gloves? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hartalega: Taking off the Gloves?
Malaysian publicly-listed Hartalega has grown to become one of the world's largest nitrile glove manufacturers. Still predominantly managed by the founder's family, it is renowned for its innovation and quality. Its growth and operational achievements have translated into a stellar financial performance, boosting its stock price 20-fold since 2008 (while the Malaysian stock market has been flat). Among other factors, its success is the result of a commitment to innovation and technology, as well as a competitive strategy that builds upon Hartalega's strengths. Having grown into a billion-dollar company (by market capitalization) and one of the largest glove manufacturers in the world, Hartalega still has ambitious plans to almost triple its production capacity in the next four years. However, the planned expansion comes at a challenging time. First, Hartalega's competitors are enjoying substantial economies of scale and are investing in technology and product quality to rival that of Hartalega. Second, if the expected increase in supply outstrips that of demand, there is a possibility of overcapacity in the glove market, which could shrink margins and harm profitability. In this regard, Hartalega's margins have already fallen by approximately seven percent since 2011. Finally, as Hartalega embarks on its ambitious plan, given its size and complexity, it must transform itself from a traditional family business into a business with a professionalized management and a more formalized structure and governance. Thus, despite its great success, Hartalega is faced with substantial challenges.
Swot Analysis of "Hartalega: Taking off the Gloves?" written by Philipp Meyer-Doyle, Siddharth Poddar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hartalega Hartalega's facing as an external strategic factors. Some of the topics covered in Hartalega: Taking off the Gloves? case study are - Strategic Management Strategies, Growth strategy, Innovation, Manufacturing, Succession planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hartalega: Taking off the Gloves? casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, technology disruption, increasing transportation and logistics costs,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Hartalega: Taking off the Gloves?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hartalega: Taking off the Gloves? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hartalega Hartalega's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hartalega Hartalega's 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 Hartalega: Taking off the Gloves? can be done for the following purposes –
1. Strategic planning using facts provided in Hartalega: Taking off the Gloves? case study
2. Improving business portfolio management of Hartalega Hartalega's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hartalega Hartalega's
Strengths Hartalega: Taking off the Gloves? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hartalega Hartalega's in Hartalega: Taking off the Gloves? Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Hartalega Hartalega's in the sector have low bargaining power. Hartalega: Taking off the Gloves? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hartalega Hartalega's to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Hartalega Hartalega's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hartalega Hartalega's 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.
Innovation driven organization
– Hartalega Hartalega's is one of the most innovative firm in sector. Manager in Hartalega: Taking off the Gloves? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Hartalega Hartalega's 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 Hartalega: Taking off the Gloves? - 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 recruit top talent
– Hartalega Hartalega's is one of the leading recruiters in the industry. Managers in the Hartalega: Taking off the Gloves? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Hartalega Hartalega's 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 Philipp Meyer-Doyle, Siddharth Poddar 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.
Learning organization
- Hartalega Hartalega's 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 Hartalega Hartalega's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hartalega: Taking off the Gloves? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Hartalega Hartalega's 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 Hartalega: Taking off the Gloves? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Hartalega Hartalega's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Hartalega: Taking off the Gloves? 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.
Ability to lead change in Strategy & Execution field
– Hartalega Hartalega's 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 Hartalega Hartalega's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Hartalega Hartalega's is present in almost all the verticals within the industry. This has provided firm in Hartalega: Taking off the Gloves? 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.
Weaknesses Hartalega: Taking off the Gloves? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hartalega: Taking off the Gloves? are -
Need for greater diversity
– Hartalega Hartalega's 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 Hartalega: Taking off the Gloves? 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 Hartalega Hartalega's has relatively successful track record of launching new products.
Products dominated business model
– Even though Hartalega Hartalega's 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 - Hartalega: Taking off the Gloves? should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Hartalega: Taking off the Gloves? 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 Hartalega Hartalega's 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Hartalega Hartalega's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hartalega: Taking off the Gloves?, in the dynamic environment Hartalega Hartalega's has struggled to respond to the nimble upstart competition. Hartalega Hartalega's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Hartalega: Taking off the Gloves?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Philipp Meyer-Doyle, Siddharth Poddar suggests that, Hartalega Hartalega's 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, Hartalega Hartalega's 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. Hartalega Hartalega's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hartalega Hartalega's 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.
Lack of clear differentiation of Hartalega Hartalega's products
– To increase the profitability and margins on the products, Hartalega Hartalega's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Hartalega: Taking off the Gloves? | 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 Hartalega: Taking off the Gloves? are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hartalega Hartalega's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Buying journey improvements
– Hartalega Hartalega's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hartalega: Taking off the Gloves? 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.
Leveraging digital technologies
– Hartalega Hartalega's 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.
Creating value in data economy
– The success of analytics program of Hartalega Hartalega's has opened avenues for new revenue streams for the organization in the industry. This can help Hartalega Hartalega's to build a more holistic ecosystem as suggested in the Hartalega: Taking off the Gloves? case study. Hartalega Hartalega's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Hartalega Hartalega's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hartalega Hartalega's can use these opportunities to build new business models that can help the communities that Hartalega Hartalega's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Hartalega Hartalega's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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. Hartalega Hartalega's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hartalega Hartalega's is facing challenges because of the dominance of functional experts in the organization. Hartalega: Taking off the Gloves? 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.
Learning at scale
– Online learning technologies has now opened space for Hartalega Hartalega's 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.
Better consumer reach
– The expansion of the 5G network will help Hartalega Hartalega's to increase its market reach. Hartalega Hartalega's 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.
Using analytics as competitive advantage
– Hartalega Hartalega's 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 Hartalega: Taking off the Gloves? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hartalega Hartalega's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Hartalega Hartalega's 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 Strategy & Execution segment.
Threats Hartalega: Taking off the Gloves? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hartalega: Taking off the Gloves? are -
Shortening product life cycle
– it is one of the major threat that Hartalega Hartalega's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Hartalega Hartalega's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Hartalega Hartalega's needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Hartalega Hartalega's 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.
Increasing wage structure of Hartalega Hartalega's
– 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 Hartalega Hartalega's.
Stagnating economy with rate increase
– Hartalega Hartalega's 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.
Regulatory challenges
– Hartalega Hartalega's 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 Strategy & Execution industry regulations.
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 Hartalega Hartalega's business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Hartalega Hartalega's 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. Hartalega Hartalega's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Hartalega Hartalega's.
High dependence on third party suppliers
– Hartalega Hartalega's 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.
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 Hartalega Hartalega's in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hartalega Hartalega's in the Strategy & Execution industry. The Strategy & Execution 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.
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. Hartalega Hartalega's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Hartalega: Taking off the Gloves? 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 Hartalega: Taking off the Gloves? 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 Hartalega: Taking off the Gloves? 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 Hartalega: Taking off the Gloves? 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 Hartalega: Taking off the Gloves? 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 Hartalega Hartalega's needs to make to build a sustainable competitive advantage.
