Kjell & Company: Electronics Accessories Retail in the Nordics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kjell & Company: Electronics Accessories Retail in the Nordics
Swedish electronics accessories retailer Kjell is considering several issues as it plots its next stage of growth. How should it balance opportunities to expand retail stores into a new market (Oslo, Norway) with additional growth in its home market-Sweden-with decisions about investments to build out its nascent online channel? Simultaneously, the company is piloting a new sales associate performance management system: should store associates be measured by monthly targets, or will daily targets prove to be more useful?
Authors :: Krishna G. Palepu, Das Narayandas, Kerry Herman
Swot Analysis of "Kjell & Company: Electronics Accessories Retail in the Nordics" written by Krishna G. Palepu, Das Narayandas, Kerry Herman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kjell Accessories facing as an external strategic factors. Some of the topics covered in Kjell & Company: Electronics Accessories Retail in the Nordics case study are - Strategic Management Strategies, Entrepreneurial finance, Marketing, Sales, Strategy, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Kjell & Company: Electronics Accessories Retail in the Nordics casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing transportation and logistics costs, geopolitical disruptions,
wage bills are increasing, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Kjell & Company: Electronics Accessories Retail in the Nordics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kjell & Company: Electronics Accessories Retail in the Nordics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kjell Accessories, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kjell Accessories 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 Kjell & Company: Electronics Accessories Retail in the Nordics can be done for the following purposes –
1. Strategic planning using facts provided in Kjell & Company: Electronics Accessories Retail in the Nordics case study
2. Improving business portfolio management of Kjell Accessories
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 Kjell Accessories
Strengths Kjell & Company: Electronics Accessories Retail in the Nordics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kjell Accessories in Kjell & Company: Electronics Accessories Retail in the Nordics Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Kjell Accessories in the sector have low bargaining power. Kjell & Company: Electronics Accessories Retail in the Nordics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kjell Accessories to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Kjell Accessories is present in almost all the verticals within the industry. This has provided firm in Kjell & Company: Electronics Accessories Retail in the Nordics 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.
Highly skilled collaborators
– Kjell Accessories 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 Kjell & Company: Electronics Accessories Retail in the Nordics HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Kjell Accessories 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.
Superior customer experience
– The customer experience strategy of Kjell Accessories 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 Kjell & Company: Electronics Accessories Retail in the Nordics 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.
High brand equity
– Kjell Accessories has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kjell Accessories to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Kjell Accessories is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Kjell Accessories 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 Kjell Accessories in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Kjell Accessories 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.
Successful track record of launching new products
– Kjell Accessories has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kjell Accessories 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Kjell & Company: Electronics Accessories Retail in the Nordics firm has clearly differentiated products in the market place. This has enabled Kjell Accessories to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Kjell Accessories to invest into research and development (R&D) and innovation.
Weaknesses Kjell & Company: Electronics Accessories Retail in the Nordics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kjell & Company: Electronics Accessories Retail in the Nordics are -
High bargaining power of channel partners
– Because of the regulatory requirements, Krishna G. Palepu, Das Narayandas, Kerry Herman suggests that, Kjell Accessories 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.
Capital Spending Reduction
– Even during the low interest decade, Kjell Accessories 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kjell Accessories is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kjell & Company: Electronics Accessories Retail in the Nordics can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell Accessories has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell & Company: Electronics Accessories Retail in the Nordics can leverage the sales team experience to cultivate customer relationships as Kjell Accessories is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Kjell & Company: Electronics Accessories Retail in the Nordics HBR case study mentions - Kjell Accessories 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.
Increasing silos among functional specialists
– The organizational structure of Kjell Accessories is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Kjell Accessories needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kjell Accessories to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Kjell Accessories 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.
Products dominated business model
– Even though Kjell Accessories 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 - Kjell & Company: Electronics Accessories Retail in the Nordics should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Kjell Accessories 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. Kjell Accessories 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
Kjell Accessories 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.
Opportunities Kjell & Company: Electronics Accessories Retail in the Nordics | 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 Kjell & Company: Electronics Accessories Retail in the Nordics are -
Creating value in data economy
– The success of analytics program of Kjell Accessories has opened avenues for new revenue streams for the organization in the industry. This can help Kjell Accessories to build a more holistic ecosystem as suggested in the Kjell & Company: Electronics Accessories Retail in the Nordics case study. Kjell Accessories can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Kjell Accessories 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kjell Accessories can use these opportunities to build new business models that can help the communities that Kjell Accessories operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Kjell Accessories can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kjell & Company: Electronics Accessories Retail in the Nordics 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.
Loyalty marketing
– Kjell Accessories 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.
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. Kjell Accessories can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Kjell Accessories 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.
Developing new processes and practices
– Kjell Accessories can develop new processes and procedures in Strategy & Execution 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.
Using analytics as competitive advantage
– Kjell Accessories 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 Kjell & Company: Electronics Accessories Retail in the Nordics - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kjell Accessories to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kjell Accessories is facing challenges because of the dominance of functional experts in the organization. Kjell & Company: Electronics Accessories Retail in the Nordics 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.
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 Kjell Accessories in the consumer business. Now Kjell Accessories can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kjell Accessories 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kjell Accessories 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, Kjell & Company: Electronics Accessories Retail in the Nordics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Kjell & Company: Electronics Accessories Retail in the Nordics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kjell & Company: Electronics Accessories Retail in the Nordics are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kjell Accessories can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kjell Accessories 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 Kjell & Company: Electronics Accessories Retail in the Nordics .
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 Kjell Accessories.
Regulatory challenges
– Kjell Accessories 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.
Consumer confidence and its impact on Kjell Accessories 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.
Shortening product life cycle
– it is one of the major threat that Kjell Accessories is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Kjell Accessories
– 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 Kjell Accessories.
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 Kjell Accessories business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kjell & Company: Electronics Accessories Retail in the Nordics, Kjell Accessories 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 .
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. Kjell Accessories 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 Kjell Accessories in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Kjell Accessories 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. Kjell Accessories can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell & Company: Electronics Accessories Retail in the Nordics 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 Kjell Accessories needs to make to build a sustainable competitive advantage.
