Case Study Description of Hypercompetition in E-retail: Flipkart.com
Flipkart faced many challenges since its inception due to the hypercompetitive nature of its industry. The company preferred the route of profitless growth in the emerging e-retail industry in India - sacrificing profits for size and growth. Venture capitalists also supported this strategy by providing five rounds of funding. Nevertheless, Flipkart encountered intense competition from local players, who were quickly imitating its competitive and growth strategies. It responded to competition and enhanced its efficiency by rationalizing its product mix, opting for acquisitions and refurbishing its supply chain. Soon, however, Amazon announced its entry into the Indian e-retailing market. Amazon's entry posed a major threat to Flipkart, mainly because of its financial strength. Flipkart responded by using a three-pronged strategy of technology, human resource management and supply chain investment. However, venture capitalists were still left wondering whether Flipkart would be able to report a profit or would be acquired by Amazon. Arpita Agnihotri and Saurabh Bhattacharya are affiliated with IBS Hyderabad .
Swot Analysis of "Hypercompetition in E-retail: Flipkart.com" written by Arpita Agnihotri, Saurabh Bhattacharya includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Flipkart Capitalists facing as an external strategic factors. Some of the topics covered in Hypercompetition in E-retail: Flipkart.com case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hypercompetition in E-retail: Flipkart.com casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, central banks are concerned over increasing inflation, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Hypercompetition in E-retail: Flipkart.com
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hypercompetition in E-retail: Flipkart.com case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Flipkart Capitalists, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Flipkart Capitalists 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 Hypercompetition in E-retail: Flipkart.com can be done for the following purposes –
1. Strategic planning using facts provided in Hypercompetition in E-retail: Flipkart.com case study
2. Improving business portfolio management of Flipkart Capitalists
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 Flipkart Capitalists
Strengths Hypercompetition in E-retail: Flipkart.com | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Flipkart Capitalists in Hypercompetition in E-retail: Flipkart.com Harvard Business Review case study are -
High brand equity
– Flipkart Capitalists has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Flipkart Capitalists to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Flipkart Capitalists has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Flipkart Capitalists
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Flipkart Capitalists does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Hypercompetition in E-retail: Flipkart.com 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Flipkart Capitalists digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Flipkart Capitalists 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.
Learning organization
- Flipkart Capitalists 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 Flipkart Capitalists is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hypercompetition in E-retail: Flipkart.com Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Flipkart Capitalists is one of the leading recruiters in the industry. Managers in the Hypercompetition in E-retail: Flipkart.com are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Flipkart Capitalists in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Flipkart Capitalists 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 Hypercompetition in E-retail: Flipkart.com HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Flipkart Capitalists has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Flipkart Capitalists 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.
Cross disciplinary teams
– Horizontal connected teams at the Flipkart Capitalists 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.
Training and development
– Flipkart Capitalists has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hypercompetition in E-retail: Flipkart.com 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.
Weaknesses Hypercompetition in E-retail: Flipkart.com | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hypercompetition in E-retail: Flipkart.com are -
Skills based hiring
– The stress on hiring functional specialists at Flipkart Capitalists 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.
Need for greater diversity
– Flipkart Capitalists 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.
Lack of clear differentiation of Flipkart Capitalists products
– To increase the profitability and margins on the products, Flipkart Capitalists needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Flipkart Capitalists, firm in the HBR case study Hypercompetition in E-retail: Flipkart.com needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Hypercompetition in E-retail: Flipkart.com, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hypercompetition in E-retail: Flipkart.com, it seems that the employees of Flipkart Capitalists 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 Hypercompetition in E-retail: Flipkart.com, is just above the industry average. Flipkart Capitalists 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.
Increasing silos among functional specialists
– The organizational structure of Flipkart Capitalists is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Flipkart Capitalists needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Flipkart Capitalists to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hypercompetition in E-retail: Flipkart.com, in the dynamic environment Flipkart Capitalists has struggled to respond to the nimble upstart competition. Flipkart Capitalists has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Hypercompetition in E-retail: Flipkart.com 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 Flipkart Capitalists 's lucrative customers.
Interest costs
– Compare to the competition, Flipkart Capitalists 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.
Opportunities Hypercompetition in E-retail: Flipkart.com | 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 Hypercompetition in E-retail: Flipkart.com are -
Leveraging digital technologies
– Flipkart Capitalists 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Flipkart Capitalists can use these opportunities to build new business models that can help the communities that Flipkart Capitalists operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Flipkart Capitalists 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Flipkart Capitalists in the consumer business. Now Flipkart Capitalists can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Flipkart Capitalists 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Flipkart Capitalists can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Flipkart Capitalists 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. Flipkart Capitalists 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.
Buying journey improvements
– Flipkart Capitalists can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hypercompetition in E-retail: Flipkart.com 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.
Better consumer reach
– The expansion of the 5G network will help Flipkart Capitalists to increase its market reach. Flipkart Capitalists 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.
Loyalty marketing
– Flipkart Capitalists 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Flipkart Capitalists 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 Flipkart Capitalists to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Flipkart Capitalists has opened avenues for new revenue streams for the organization in the industry. This can help Flipkart Capitalists to build a more holistic ecosystem as suggested in the Hypercompetition in E-retail: Flipkart.com case study. Flipkart Capitalists can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Flipkart Capitalists can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Hypercompetition in E-retail: Flipkart.com External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hypercompetition in E-retail: Flipkart.com are -
Consumer confidence and its impact on Flipkart Capitalists 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.
Stagnating economy with rate increase
– Flipkart Capitalists 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hypercompetition in E-retail: Flipkart.com, Flipkart Capitalists may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Flipkart Capitalists 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 dependence on third party suppliers
– Flipkart Capitalists 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Flipkart Capitalists with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Flipkart Capitalists.
Environmental challenges
– Flipkart Capitalists 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. Flipkart Capitalists can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Flipkart Capitalists 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.
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 Flipkart Capitalists business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Flipkart Capitalists has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Flipkart Capitalists 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.
Weighted SWOT Analysis of Hypercompetition in E-retail: Flipkart.com 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 Hypercompetition in E-retail: Flipkart.com 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 Hypercompetition in E-retail: Flipkart.com 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 Hypercompetition in E-retail: Flipkart.com 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 Hypercompetition in E-retail: Flipkart.com 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 Flipkart Capitalists needs to make to build a sustainable competitive advantage.