Case Study Description of Vietnam Handicraft Initiative: Moving Toward Sustainable Operations
A recent MBA graduate has just received a one-year business assignment as a business development and marketing advisor to work with the Vietnam Handicraft Initiative (VHI), a vocational training and employment center for people with disabilities, located in Central Vietnam. Her job is to assist the VHI to increase its productivity, become sustainable and strengthen the capacity of the organization through improved business and marketing plans. Within the first four weeks of her arrival, she needs to detail her assessment of the VHI and provide key recommendations and focused work objectives for the remaining 11 months of her placement. She expects that the many cultural differences encountered along the way will provide a real challenge in accurately assessing the VHI and developing a detailed work plan.
Swot Analysis of "Vietnam Handicraft Initiative: Moving Toward Sustainable Operations" written by Sarah Easter, Mary Conway Dato-on includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vhi Vietnam facing as an external strategic factors. Some of the topics covered in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Vietnam Handicraft Initiative: Moving Toward Sustainable Operations casestudy better are - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, technology disruption, supply chains are disrupted by pandemic , increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Vietnam Handicraft Initiative: Moving Toward Sustainable Operations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vhi Vietnam, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vhi Vietnam 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations can be done for the following purposes –
1. Strategic planning using facts provided in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations case study
2. Improving business portfolio management of Vhi Vietnam
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 Vhi Vietnam
Strengths Vietnam Handicraft Initiative: Moving Toward Sustainable Operations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vhi Vietnam in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations Harvard Business Review case study are -
Innovation driven organization
– Vhi Vietnam is one of the most innovative firm in sector. Manager in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Vietnam Handicraft Initiative: Moving Toward Sustainable Operations firm has clearly differentiated products in the market place. This has enabled Vhi Vietnam to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Vhi Vietnam to invest into research and development (R&D) and innovation.
Training and development
– Vhi Vietnam has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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.
Cross disciplinary teams
– Horizontal connected teams at the Vhi Vietnam 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.
Low bargaining power of suppliers
– Suppliers of Vhi Vietnam in the sector have low bargaining power. Vietnam Handicraft Initiative: Moving Toward Sustainable Operations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vhi Vietnam to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Vhi Vietnam 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 Vhi Vietnam in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Vhi Vietnam has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vhi Vietnam to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Vhi Vietnam 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Vhi Vietnam 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.
Diverse revenue streams
– Vhi Vietnam is present in almost all the verticals within the industry. This has provided firm in Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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.
Superior customer experience
– The customer experience strategy of Vhi Vietnam in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Vietnam Handicraft Initiative: Moving Toward Sustainable Operations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vietnam Handicraft Initiative: Moving Toward Sustainable Operations are -
High operating costs
– Compare to the competitors, firm in the HBR case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vhi Vietnam 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations can leverage the sales team experience to cultivate customer relationships as Vhi Vietnam is planning to shift buying processes online.
Interest costs
– Compare to the competition, Vhi Vietnam 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.
Products dominated business model
– Even though Vhi Vietnam 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 - Vietnam Handicraft Initiative: Moving Toward Sustainable Operations should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vhi Vietnam is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 bargaining power of channel partners
– Because of the regulatory requirements, Sarah Easter, Mary Conway Dato-on suggests that, Vhi Vietnam 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, Vhi Vietnam 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. Vhi Vietnam 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.
Low market penetration in new markets
– Outside its home market of Vhi Vietnam, firm in the HBR case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Vhi Vietnam 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations, is just above the industry average. Vhi Vietnam 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.
Need for greater diversity
– Vhi Vietnam 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.
Opportunities Vietnam Handicraft Initiative: Moving Toward Sustainable Operations | 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations are -
Leveraging digital technologies
– Vhi Vietnam 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vhi Vietnam 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.
Building a culture of innovation
– managers at Vhi Vietnam 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vhi Vietnam 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 Vhi Vietnam to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vhi Vietnam can use these opportunities to build new business models that can help the communities that Vhi Vietnam operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Vhi Vietnam can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Vhi Vietnam 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.
Manufacturing automation
– Vhi Vietnam 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
– Vhi Vietnam 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.
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 Vhi Vietnam in the consumer business. Now Vhi Vietnam can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Vhi Vietnam 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vhi Vietnam to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Vhi Vietnam 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.
Creating value in data economy
– The success of analytics program of Vhi Vietnam has opened avenues for new revenue streams for the organization in the industry. This can help Vhi Vietnam to build a more holistic ecosystem as suggested in the Vietnam Handicraft Initiative: Moving Toward Sustainable Operations case study. Vhi Vietnam can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Vietnam Handicraft Initiative: Moving Toward Sustainable Operations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations are -
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
– Vhi Vietnam has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Vhi Vietnam 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.
Shortening product life cycle
– it is one of the major threat that Vhi Vietnam is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Vhi Vietnam business can come under increasing regulations regarding data privacy, data security, etc.
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. Vhi Vietnam 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.
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.
Consumer confidence and its impact on Vhi Vietnam 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.
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. Vhi Vietnam can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Vhi Vietnam in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Vhi Vietnam 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.
High dependence on third party suppliers
– Vhi Vietnam 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.
Increasing wage structure of Vhi Vietnam
– 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 Vhi Vietnam.
Environmental challenges
– Vhi Vietnam 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. Vhi Vietnam can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vhi Vietnam needs to make to build a sustainable competitive advantage.