Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs'
The Bertelsmann-owned French book club, France Loisirs, has successfully operated a subscription-based business model delivering a remarkably high profit margin. Considering rising economic pressure and a declining member base, the case introduces the club's basic business principles and summarizes strategic options for sustainability and further growth from a top management perspective.
Swot Analysis of "Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs'" written by Claudia Loebbecke includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Loisirs Book facing as an external strategic factors. Some of the topics covered in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' case study are - Strategic Management Strategies, Customer service and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, there is increasing trade war between United States & China,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs'
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Loisirs Book, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Loisirs Book 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' can be done for the following purposes –
1. Strategic planning using facts provided in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' case study
2. Improving business portfolio management of Loisirs Book
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 Loisirs Book
Strengths Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Loisirs Book in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' Harvard Business Review case study are -
Training and development
– Loisirs Book has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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.
Highly skilled collaborators
– Loisirs Book 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Loisirs Book is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Loisirs Book is one of the most innovative firm in sector. Manager in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' firm has clearly differentiated products in the market place. This has enabled Loisirs Book to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Loisirs Book to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Loisirs Book is one of the leading recruiters in the industry. Managers in the Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Loisirs Book has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Loisirs Book to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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.
Learning organization
- Loisirs Book 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 Loisirs Book is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Loisirs Book is present in almost all the verticals within the industry. This has provided firm in Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Loisirs Book digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Loisirs Book 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.
Cross disciplinary teams
– Horizontal connected teams at the Loisirs Book 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' are -
Products dominated business model
– Even though Loisirs Book 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 - Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs', 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs', in the dynamic environment Loisirs Book has struggled to respond to the nimble upstart competition. Loisirs Book has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Loisirs Book 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.
Lack of clear differentiation of Loisirs Book products
– To increase the profitability and margins on the products, Loisirs Book needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Loisirs Book 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.
Slow to strategic competitive environment developments
– As Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' HBR case study mentions - Loisirs Book 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs', it seems that the employees of Loisirs Book 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Loisirs Book supply chain. Even after few cautionary changes mentioned in the HBR case study - Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs', it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Loisirs Book vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Loisirs Book 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs', is just above the industry average. Loisirs Book 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.
Opportunities Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' | 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' are -
Developing new processes and practices
– Loisirs Book 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
– Loisirs Book 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Loisirs Book to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Loisirs Book can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Loisirs Book 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.
Learning at scale
– Online learning technologies has now opened space for Loisirs Book 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Loisirs Book can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Loisirs Book can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Loisirs Book can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Loisirs Book 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.
Buying journey improvements
– Loisirs Book can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Loisirs Book 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, Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs', to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Loisirs Book 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. Loisirs Book 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Loisirs Book can use these opportunities to build new business models that can help the communities that Loisirs Book operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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.
Increasing wage structure of Loisirs Book
– 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 Loisirs Book.
Stagnating economy with rate increase
– Loisirs Book 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.
High dependence on third party suppliers
– Loisirs Book high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Loisirs Book with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Loisirs Book 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
– Loisirs Book has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Loisirs Book 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.
Environmental challenges
– Loisirs Book 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. Loisirs Book can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Loisirs Book needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Loisirs Book 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 Loisirs Book 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.
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. Loisirs Book 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.
Weighted SWOT Analysis of Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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 Reshaping the Book Industry or Back to Basics? (A) The Case of 'France Loisirs' 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 Loisirs Book needs to make to build a sustainable competitive advantage.
