Aarong: Social Enterprise for Bangladesh's Rural Poor SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aarong: Social Enterprise for Bangladesh's Rural Poor
Aarong, the retail arm of BRAC, a non-profit development organization based in Bangladesh, was created in 1978 to provide employment, income generation and social development opportunities for underprivileged women through the revival and promotion of Bangladeshi handicrafts. Profits from Aarong were used to extend such opportunities to more low-income producers and to cross-subsidize BRAC programmes for the poor. In 30 years, from a single shop, Aarong had grown into one of Bangladesh's biggest retail chains. Its products ranged from clothing, household items, gifts and fashion accessories to children's toys. The competition, however, was intensifying, both from local retailers in individual categories as well as foreign players, such as from India. How could Aarong compete in a global market? How could it leverage the brand, improve quality to match machine-made consistency, and keep prices competitive, while maintaining its social mission?
Authors :: Amitava Chattopadhyay, Jean Wee
Topics :: Strategy & Execution
Tags :: Marketing, Sales, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Aarong: Social Enterprise for Bangladesh's Rural Poor" written by Amitava Chattopadhyay, Jean Wee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aarong Bangladesh's facing as an external strategic factors. Some of the topics covered in Aarong: Social Enterprise for Bangladesh's Rural Poor case study are - Strategic Management Strategies, Marketing, Sales, Social enterprise, Social responsibility and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Aarong: Social Enterprise for Bangladesh's Rural Poor casestudy better are - – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, geopolitical disruptions,
there is backlash against globalization, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Aarong: Social Enterprise for Bangladesh's Rural Poor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aarong: Social Enterprise for Bangladesh's Rural Poor case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aarong Bangladesh's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aarong Bangladesh's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Aarong: Social Enterprise for Bangladesh's Rural Poor can be done for the following purposes –
1. Strategic planning using facts provided in Aarong: Social Enterprise for Bangladesh's Rural Poor case study
2. Improving business portfolio management of Aarong Bangladesh's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aarong Bangladesh's
Strengths Aarong: Social Enterprise for Bangladesh's Rural Poor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aarong Bangladesh's in Aarong: Social Enterprise for Bangladesh's Rural Poor Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Aarong Bangladesh's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Aarong Bangladesh's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aarong: Social Enterprise for Bangladesh's Rural Poor 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.
Analytics focus
– Aarong Bangladesh's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Amitava Chattopadhyay, Jean Wee 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.
Highly skilled collaborators
– Aarong Bangladesh's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Aarong: Social Enterprise for Bangladesh's Rural Poor HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Aarong Bangladesh's is one of the most innovative firm in sector. Manager in Aarong: Social Enterprise for Bangladesh's Rural Poor Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Aarong Bangladesh's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Aarong Bangladesh's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aarong: Social Enterprise for Bangladesh's Rural Poor Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Aarong Bangladesh's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aarong Bangladesh's 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.
Successful track record of launching new products
– Aarong Bangladesh's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aarong Bangladesh's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Aarong Bangladesh's is present in almost all the verticals within the industry. This has provided firm in Aarong: Social Enterprise for Bangladesh's Rural Poor 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.
Effective Research and Development (R&D)
– Aarong Bangladesh's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Aarong: Social Enterprise for Bangladesh's Rural Poor - 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 Aarong Bangladesh's 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Aarong: Social Enterprise for Bangladesh's Rural Poor firm has clearly differentiated products in the market place. This has enabled Aarong Bangladesh's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Aarong Bangladesh's to invest into research and development (R&D) and innovation.
Weaknesses Aarong: Social Enterprise for Bangladesh's Rural Poor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aarong: Social Enterprise for Bangladesh's Rural Poor are -
Workers concerns about automation
– As automation is fast increasing in the segment, Aarong Bangladesh's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Amitava Chattopadhyay, Jean Wee suggests that, Aarong Bangladesh's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study Aarong: Social Enterprise for Bangladesh's Rural Poor, 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.
Lack of clear differentiation of Aarong Bangladesh's products
– To increase the profitability and margins on the products, Aarong Bangladesh's needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Aarong: Social Enterprise for Bangladesh's Rural Poor 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 Aarong Bangladesh's 's lucrative customers.
High cash cycle compare to competitors
Aarong Bangladesh's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Aarong: Social Enterprise for Bangladesh's Rural Poor, it seems that the employees of Aarong Bangladesh's 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.
Increasing silos among functional specialists
– The organizational structure of Aarong Bangladesh's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Aarong Bangladesh's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aarong Bangladesh's to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Aarong Bangladesh's 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.
Low market penetration in new markets
– Outside its home market of Aarong Bangladesh's, firm in the HBR case study Aarong: Social Enterprise for Bangladesh's Rural Poor needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Aarong Bangladesh's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Aarong Bangladesh's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Aarong: Social Enterprise for Bangladesh's Rural Poor | 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 Aarong: Social Enterprise for Bangladesh's Rural Poor are -
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 Aarong Bangladesh's in the consumer business. Now Aarong Bangladesh's can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Aarong Bangladesh's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aarong Bangladesh's is facing challenges because of the dominance of functional experts in the organization. Aarong: Social Enterprise for Bangladesh's Rural Poor 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.
Manufacturing automation
– Aarong Bangladesh's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aarong Bangladesh's 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, Aarong: Social Enterprise for Bangladesh's Rural Poor, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Aarong Bangladesh's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Aarong Bangladesh's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aarong: Social Enterprise for Bangladesh's Rural Poor 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.
Developing new processes and practices
– Aarong Bangladesh's 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.
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. Aarong Bangladesh's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Aarong Bangladesh's has opened avenues for new revenue streams for the organization in the industry. This can help Aarong Bangladesh's to build a more holistic ecosystem as suggested in the Aarong: Social Enterprise for Bangladesh's Rural Poor case study. Aarong Bangladesh's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Aarong Bangladesh's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Aarong Bangladesh's 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. Aarong Bangladesh's 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.
Better consumer reach
– The expansion of the 5G network will help Aarong Bangladesh's to increase its market reach. Aarong Bangladesh's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Aarong: Social Enterprise for Bangladesh's Rural Poor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aarong: Social Enterprise for Bangladesh's Rural Poor are -
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. Aarong Bangladesh's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aarong: Social Enterprise for Bangladesh's Rural Poor, Aarong Bangladesh's 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 wage structure of Aarong Bangladesh's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Aarong Bangladesh's.
Regulatory challenges
– Aarong Bangladesh's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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 Aarong Bangladesh's.
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. Aarong Bangladesh's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Aarong Bangladesh's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aarong Bangladesh's in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Aarong Bangladesh's business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Aarong Bangladesh's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Aarong Bangladesh's in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Aarong Bangladesh's 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 Aarong: Social Enterprise for Bangladesh's Rural Poor 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 Aarong: Social Enterprise for Bangladesh's Rural Poor 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 Aarong: Social Enterprise for Bangladesh's Rural Poor 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 Aarong: Social Enterprise for Bangladesh's Rural Poor 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 Aarong: Social Enterprise for Bangladesh's Rural Poor 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 Aarong Bangladesh's needs to make to build a sustainable competitive advantage.
