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 - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, there is backlash against globalization, wage bills are increasing, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Organizational Resilience of Vhi Vietnam
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vhi Vietnam does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Successful track record of launching new products
– Vhi Vietnam has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vhi Vietnam 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.
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.
Analytics focus
– Vhi Vietnam 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 Sarah Easter, Mary Conway Dato-on 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.
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.
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.
Highly skilled collaborators
– Vhi Vietnam 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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 -
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.
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.
Slow to strategic competitive environment developments
– As Vietnam Handicraft Initiative: Moving Toward Sustainable Operations HBR case study mentions - Vhi Vietnam takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Vhi Vietnam 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.
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.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Vietnam Handicraft Initiative: Moving Toward Sustainable Operations 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 Vhi Vietnam has relatively successful track record of launching new products.
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.
Increasing silos among functional specialists
– The organizational structure of Vhi Vietnam is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Vhi Vietnam needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vhi Vietnam to focus more on services rather than just following the product oriented approach.
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.
No frontier risks strategy
– After analyzing the HBR case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations, 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.
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 -
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.
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.
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. Vhi Vietnam 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. Vhi Vietnam 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vhi Vietnam 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, Vietnam Handicraft Initiative: Moving Toward Sustainable Operations, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 Vhi Vietnam 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Vhi Vietnam can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Vhi Vietnam to increase its market reach. Vhi Vietnam 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vhi Vietnam can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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 Vhi Vietnam.
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. Vhi Vietnam needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Vietnam Handicraft Initiative: Moving Toward Sustainable Operations, Vhi Vietnam 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vhi Vietnam 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 Vietnam Handicraft Initiative: Moving Toward Sustainable Operations .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vhi Vietnam 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.
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.
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.
