Case Study Description of Azza Fahmy Jewellery: International Expansion
This is the third case in the Azza Fahmy series. This case and the three others in this series (9B13M097, 9B13M098 and 9B14M023) can be used together or on a standalone basis.This case series features a female Egyptian entrepreneur who faces the challenge of developing her self-titled jewellery brand. This case describes some of the first steps of doing business internationally in the West. Lacking international experience, the entrepreneur seeks to minimize risk by entering into a strategic alliance with renowned fashion designers. They systematically help her to introduce her brand to the international market, albeit on a limited scale. After the initial success, she begins to plan a more structured approach towards internationalization. She decides to commission a thorough study of France, Spain and Turkey, as they are historically familiar with Arabic jewellery designs. Accordingly, the case identifies specific information about the three countries so that students can compare them in order to reach the best decision about structured international expansion. Author Marina Apaydin is affiliated with American University of Beirut. Author Hend Mostafa is affiliated with American University of Cairo.
Swot Analysis of "Azza Fahmy Jewellery: International Expansion" written by Marina Apaydin, Hend Mostafa, Mariam Mohamed Sherin, Mariam Ali Mobarak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jewellery Azza facing as an external strategic factors. Some of the topics covered in Azza Fahmy Jewellery: International Expansion case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Azza Fahmy Jewellery: International Expansion casestudy better are - – increasing government debt because of Covid-19 spendings, technology disruption, there is increasing trade war between United States & China, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing energy prices, there is backlash against globalization,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Azza Fahmy Jewellery: International Expansion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Azza Fahmy Jewellery: International Expansion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jewellery Azza, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jewellery Azza 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 Azza Fahmy Jewellery: International Expansion can be done for the following purposes –
1. Strategic planning using facts provided in Azza Fahmy Jewellery: International Expansion case study
2. Improving business portfolio management of Jewellery Azza
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 Jewellery Azza
Strengths Azza Fahmy Jewellery: International Expansion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jewellery Azza in Azza Fahmy Jewellery: International Expansion Harvard Business Review case study are -
Diverse revenue streams
– Jewellery Azza is present in almost all the verticals within the industry. This has provided firm in Azza Fahmy Jewellery: International Expansion 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.
High switching costs
– The high switching costs that Jewellery Azza 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
– Azza Fahmy Jewellery: International Expansion firm has clearly differentiated products in the market place. This has enabled Jewellery Azza to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Jewellery Azza to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Azza Fahmy Jewellery: International Expansion 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.
Superior customer experience
– The customer experience strategy of Jewellery Azza in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Jewellery Azza 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 Marina Apaydin, Hend Mostafa, Mariam Mohamed Sherin, Mariam Ali Mobarak 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.
Effective Research and Development (R&D)
– Jewellery Azza 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 Azza Fahmy Jewellery: International Expansion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Jewellery Azza
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jewellery Azza does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Jewellery Azza 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 Jewellery Azza in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Jewellery Azza in the sector have low bargaining power. Azza Fahmy Jewellery: International Expansion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jewellery Azza to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Jewellery Azza 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 Jewellery Azza is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Azza Fahmy Jewellery: International Expansion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Jewellery Azza 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 Azza Fahmy Jewellery: International Expansion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Azza Fahmy Jewellery: International Expansion are -
Products dominated business model
– Even though Jewellery Azza 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 - Azza Fahmy Jewellery: International Expansion should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Azza Fahmy Jewellery: International Expansion, in the dynamic environment Jewellery Azza has struggled to respond to the nimble upstart competition. Jewellery Azza has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Jewellery Azza 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Jewellery Azza 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jewellery Azza is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Azza Fahmy Jewellery: International Expansion 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 operating costs
– Compare to the competitors, firm in the HBR case study Azza Fahmy Jewellery: International Expansion 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 Jewellery Azza 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Jewellery Azza is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Jewellery Azza needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jewellery Azza to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Azza Fahmy Jewellery: International Expansion, is just above the industry average. Jewellery Azza 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.
High cash cycle compare to competitors
Jewellery Azza 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.
Need for greater diversity
– Jewellery Azza 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.
Aligning sales with marketing
– It come across in the case study Azza Fahmy Jewellery: International Expansion 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 Azza Fahmy Jewellery: International Expansion can leverage the sales team experience to cultivate customer relationships as Jewellery Azza is planning to shift buying processes online.
Opportunities Azza Fahmy Jewellery: International Expansion | 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 Azza Fahmy Jewellery: International Expansion are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jewellery Azza is facing challenges because of the dominance of functional experts in the organization. Azza Fahmy Jewellery: International Expansion 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.
Using analytics as competitive advantage
– Jewellery Azza 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 Azza Fahmy Jewellery: International Expansion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jewellery Azza to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Jewellery Azza 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.
Creating value in data economy
– The success of analytics program of Jewellery Azza has opened avenues for new revenue streams for the organization in the industry. This can help Jewellery Azza to build a more holistic ecosystem as suggested in the Azza Fahmy Jewellery: International Expansion case study. Jewellery Azza can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jewellery Azza in the consumer business. Now Jewellery Azza can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jewellery Azza 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 Jewellery Azza to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jewellery Azza 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, Azza Fahmy Jewellery: International Expansion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Jewellery Azza 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.
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. Jewellery Azza can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jewellery Azza 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.
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. Jewellery Azza can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Jewellery Azza 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.
Developing new processes and practices
– Jewellery Azza 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.
Threats Azza Fahmy Jewellery: International Expansion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Azza Fahmy Jewellery: International Expansion 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.
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 Jewellery Azza in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jewellery Azza with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Jewellery Azza 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 acceleration in Forth Industrial Revolution
– Jewellery Azza has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Jewellery Azza 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jewellery Azza 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 Azza Fahmy Jewellery: International Expansion .
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 Jewellery Azza.
Regulatory challenges
– Jewellery Azza 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.
Consumer confidence and its impact on Jewellery Azza demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jewellery Azza can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Jewellery Azza
– 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 Jewellery Azza.
Stagnating economy with rate increase
– Jewellery Azza 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.
Weighted SWOT Analysis of Azza Fahmy Jewellery: International Expansion 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 Azza Fahmy Jewellery: International Expansion 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 Azza Fahmy Jewellery: International Expansion 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 Azza Fahmy Jewellery: International Expansion 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 Azza Fahmy Jewellery: International Expansion 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 Jewellery Azza needs to make to build a sustainable competitive advantage.
