Case Study Description of L.L. Bean, Inc., Spanish Version
Discusses the development and operations of a small manufacturing and mail order company doing $3 million sales. L.L. Bean operates in violation of most reasonable business principles, but it is profitable and growing.
Swot Analysis of "L.L. Bean, Inc., Spanish Version" written by Frank L. Tucker includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that L.l Bean facing as an external strategic factors. Some of the topics covered in L.L. Bean, Inc., Spanish Version case study are - Strategic Management Strategies, Marketing, Public relations, Strategic planning, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the L.L. Bean, Inc., Spanish Version casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing energy prices, increasing household debt because of falling income levels, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of L.L. Bean, Inc., Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in L.L. Bean, Inc., Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the L.l Bean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which L.l Bean 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 L.L. Bean, Inc., Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in L.L. Bean, Inc., Spanish Version case study
2. Improving business portfolio management of L.l Bean
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 L.l Bean
Strengths L.L. Bean, Inc., Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of L.l Bean in L.L. Bean, Inc., Spanish Version Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For L.l Bean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. L.l Bean 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.
High switching costs
– The high switching costs that L.l Bean 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.
Cross disciplinary teams
– Horizontal connected teams at the L.l Bean 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.
Analytics focus
– L.l Bean 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 Frank L. Tucker 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.
Successful track record of launching new products
– L.l Bean has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. L.l Bean 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.
Innovation driven organization
– L.l Bean is one of the most innovative firm in sector. Manager in L.L. Bean, Inc., Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of L.l Bean in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– L.l Bean has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled L.l Bean to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the L.L. Bean, Inc., Spanish Version 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
- L.l Bean 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 L.l Bean is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in L.L. Bean, Inc., Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– L.l Bean is present in almost all the verticals within the industry. This has provided firm in L.L. Bean, Inc., Spanish Version 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.
Training and development
– L.l Bean has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in L.L. Bean, Inc., Spanish Version 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.
Weaknesses L.L. Bean, Inc., Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of L.L. Bean, Inc., Spanish Version are -
No frontier risks strategy
– After analyzing the HBR case study L.L. Bean, Inc., Spanish Version, 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.
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 L.l Bean supply chain. Even after few cautionary changes mentioned in the HBR case study - L.L. Bean, Inc., Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left L.l Bean vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of L.l Bean products
– To increase the profitability and margins on the products, L.l Bean 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 L.L. Bean, Inc., Spanish Version 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 L.l Bean 's lucrative customers.
High cash cycle compare to competitors
L.l Bean 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.
Low market penetration in new markets
– Outside its home market of L.l Bean, firm in the HBR case study L.L. Bean, Inc., Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank L. Tucker suggests that, L.l Bean 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.
Aligning sales with marketing
– It come across in the case study L.L. Bean, Inc., Spanish Version 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 L.L. Bean, Inc., Spanish Version can leverage the sales team experience to cultivate customer relationships as L.l Bean is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As L.L. Bean, Inc., Spanish Version HBR case study mentions - L.l Bean 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 L.L. Bean, Inc., Spanish Version, it seems that the employees of L.l Bean 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study L.L. Bean, Inc., Spanish Version, is just above the industry average. L.l Bean 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 L.L. Bean, Inc., Spanish Version | 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 L.L. Bean, Inc., Spanish Version are -
Creating value in data economy
– The success of analytics program of L.l Bean has opened avenues for new revenue streams for the organization in the industry. This can help L.l Bean to build a more holistic ecosystem as suggested in the L.L. Bean, Inc., Spanish Version case study. L.l Bean can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, L.l Bean 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, L.L. Bean, Inc., Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, L.l Bean is facing challenges because of the dominance of functional experts in the organization. L.L. Bean, Inc., Spanish Version 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.
Better consumer reach
– The expansion of the 5G network will help L.l Bean to increase its market reach. L.l Bean 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.
Learning at scale
– Online learning technologies has now opened space for L.l Bean 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.
Using analytics as competitive advantage
– L.l Bean 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 L.L. Bean, Inc., Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help L.l Bean to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects L.l Bean can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– L.l Bean 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for L.l Bean 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 L.l Bean to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for L.l Bean 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.
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 L.l Bean 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, L.l Bean 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.
Building a culture of innovation
– managers at L.l Bean 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.
Threats L.L. Bean, Inc., Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study L.L. Bean, Inc., Spanish Version are -
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. L.l Bean needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– L.l Bean 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.
Stagnating economy with rate increase
– L.l Bean 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study L.L. Bean, Inc., Spanish Version, L.l Bean 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 .
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 L.l Bean in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of L.l Bean
– 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 L.l Bean.
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. L.l Bean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– L.l Bean 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. L.l Bean can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on L.l Bean demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that L.l Bean is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– L.l Bean 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, L.l Bean 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 L.L. Bean, Inc., Spanish Version .
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 L.l Bean business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of L.L. Bean, Inc., Spanish Version 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 L.L. Bean, Inc., Spanish Version 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 L.L. Bean, Inc., Spanish Version 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 L.L. Bean, Inc., Spanish Version 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 L.L. Bean, Inc., Spanish Version 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 L.l Bean needs to make to build a sustainable competitive advantage.
