Mary Kay Inc.: Direct Selling and the Challenge of Online Channels SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Mary Kay Inc.: Direct Selling and the Challenge of Online Channels
Mary Kay is one of the best-known direct sellers of women's cosmetics in the world. Its channel strategy is to use independent beauty consultants, who are independent distributors, to sell directly to consumers. Its compensation plan is multilevel, providing commissions to distributors on their own sales as well as the sales of the distributors they recruit. At the time of the case, the company is grappling with a well-established change in consumer behavior--the decline of the stay-at-home mom as she returns to the workforce--combined with the opportunities offered by Internet selling. Focuses on the company's efforts to move with consumer demand and behavior, while remaining true to its core goal of "Improving Women's Lives." Discusses ways Internet technology can be used throughout the company's channel and supply chain structure, not just as a route to market.
Swot Analysis of "Mary Kay Inc.: Direct Selling and the Challenge of Online Channels" written by Anne Coughlan, Erica Goldman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Distributors Kay facing as an external strategic factors. Some of the topics covered in Mary Kay Inc.: Direct Selling and the Challenge of Online Channels case study are - Strategic Management Strategies, Marketing, Sales, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Mary Kay Inc.: Direct Selling and the Challenge of Online Channels casestudy better are - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , technology disruption, central banks are concerned over increasing inflation, there is backlash against globalization, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Mary Kay Inc.: Direct Selling and the Challenge of Online Channels
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mary Kay Inc.: Direct Selling and the Challenge of Online Channels case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Distributors Kay, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Distributors Kay 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels can be done for the following purposes –
1. Strategic planning using facts provided in Mary Kay Inc.: Direct Selling and the Challenge of Online Channels case study
2. Improving business portfolio management of Distributors Kay
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Distributors Kay
Strengths Mary Kay Inc.: Direct Selling and the Challenge of Online Channels | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Distributors Kay in Mary Kay Inc.: Direct Selling and the Challenge of Online Channels Harvard Business Review case study are -
Training and development
– Distributors Kay has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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.
High brand equity
– Distributors Kay has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Distributors Kay to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Distributors Kay is one of the leading recruiters in the industry. Managers in the Mary Kay Inc.: Direct Selling and the Challenge of Online Channels are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Technology & Operations field
– Distributors Kay 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 Distributors Kay in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Distributors Kay 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Distributors Kay digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Distributors Kay 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.
Innovation driven organization
– Distributors Kay is one of the most innovative firm in sector. Manager in Mary Kay Inc.: Direct Selling and the Challenge of Online Channels Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Distributors Kay has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Distributors Kay 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.
Superior customer experience
– The customer experience strategy of Distributors Kay in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Distributors Kay 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.
Highly skilled collaborators
– Distributors Kay 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Distributors Kay is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Mary Kay Inc.: Direct Selling and the Challenge of Online Channels | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mary Kay Inc.: Direct Selling and the Challenge of Online Channels are -
Increasing silos among functional specialists
– The organizational structure of Distributors Kay is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Distributors Kay needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Distributors Kay to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Distributors Kay, firm in the HBR case study Mary Kay Inc.: Direct Selling and the Challenge of Online Channels needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Distributors Kay 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mary Kay Inc.: Direct Selling and the Challenge of Online Channels HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Distributors Kay has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Distributors Kay 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. Distributors Kay 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mary Kay Inc.: Direct Selling and the Challenge of Online Channels, it seems that the employees of Distributors Kay 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.
Aligning sales with marketing
– It come across in the case study Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels can leverage the sales team experience to cultivate customer relationships as Distributors Kay is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Distributors Kay has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Distributors Kay 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.
Need for greater diversity
– Distributors Kay 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels HBR case study mentions - Distributors Kay 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.
Opportunities Mary Kay Inc.: Direct Selling and the Challenge of Online Channels | 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels are -
Creating value in data economy
– The success of analytics program of Distributors Kay has opened avenues for new revenue streams for the organization in the industry. This can help Distributors Kay to build a more holistic ecosystem as suggested in the Mary Kay Inc.: Direct Selling and the Challenge of Online Channels case study. Distributors Kay can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Distributors Kay can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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 Distributors Kay in the consumer business. Now Distributors Kay can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Distributors Kay 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, Mary Kay Inc.: Direct Selling and the Challenge of Online Channels, 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 Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Distributors Kay 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. Distributors Kay 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Distributors Kay can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Distributors Kay 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.
Leveraging digital technologies
– Distributors Kay 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, Distributors Kay is facing challenges because of the dominance of functional experts in the organization. Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Distributors Kay can use these opportunities to build new business models that can help the communities that Distributors Kay operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Loyalty marketing
– Distributors Kay 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.
Developing new processes and practices
– Distributors Kay can develop new processes and procedures in Technology & Operations 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
– Distributors Kay 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Distributors Kay to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Mary Kay Inc.: Direct Selling and the Challenge of Online Channels External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mary Kay Inc.: Direct Selling and the Challenge of Online Channels are -
Increasing wage structure of Distributors Kay
– 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 Distributors Kay.
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.
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. Distributors Kay needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Distributors Kay has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Distributors Kay needs to keep up with the evolution of technology in the Technology & Operations 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.
Shortening product life cycle
– it is one of the major threat that Distributors Kay is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Distributors Kay with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Distributors Kay 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels .
Environmental challenges
– Distributors Kay 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. Distributors Kay can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mary Kay Inc.: Direct Selling and the Challenge of Online Channels, Distributors Kay may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Distributors Kay.
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 Distributors Kay business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Distributors Kay 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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 Mary Kay Inc.: Direct Selling and the Challenge of Online Channels 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 Distributors Kay needs to make to build a sustainable competitive advantage.
