Royal FloraHolland: The Dutch Floriculture Supply Chain SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal FloraHolland: The Dutch Floriculture Supply Chain
In January 2016, the program director of Royal FloraHolland and a supply chain consultant met to develop a supply chain strategy that would allow Royal FloraHolland to adapt to the changing competitive environment that jeopardized its business model. Royal FloraHolland was the largest floriculture auction organization in the world, selling more than 30 million flowers and plants daily. Located in the Netherlands, Royal FloraHolland was a co-operative owned by 4,500 growers. A century-long tradition, where buyers purchased flowers and plants through the Dutch flower auction clock, was being threatened. Pressures facing Royal FloraHolland included emerging global competition, industry consolidation, and customers bypassing the auction process to buy directly from the growers. The two supply chain experts considered opportunities and challenges that lay ahead for the organization.
Swot Analysis of "Royal FloraHolland: The Dutch Floriculture Supply Chain" written by P. Fraser Johnson, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Floraholland Royal facing as an external strategic factors. Some of the topics covered in Royal FloraHolland: The Dutch Floriculture Supply Chain case study are - Strategic Management Strategies, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Royal FloraHolland: The Dutch Floriculture Supply Chain casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, talent flight as more people leaving formal jobs, increasing commodity prices, there is backlash against globalization, increasing energy prices, increasing government debt because of Covid-19 spendings,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Royal FloraHolland: The Dutch Floriculture Supply Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal FloraHolland: The Dutch Floriculture Supply Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Floraholland Royal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Floraholland Royal 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 Royal FloraHolland: The Dutch Floriculture Supply Chain can be done for the following purposes –
1. Strategic planning using facts provided in Royal FloraHolland: The Dutch Floriculture Supply Chain case study
2. Improving business portfolio management of Floraholland Royal
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 Floraholland Royal
Strengths Royal FloraHolland: The Dutch Floriculture Supply Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Floraholland Royal in Royal FloraHolland: The Dutch Floriculture Supply Chain Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Floraholland Royal in the sector have low bargaining power. Royal FloraHolland: The Dutch Floriculture Supply Chain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Floraholland Royal to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Floraholland Royal is one of the most innovative firm in sector. Manager in Royal FloraHolland: The Dutch Floriculture Supply Chain 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
– Floraholland Royal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Floraholland Royal 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.
Strong track record of project management
– Floraholland Royal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Floraholland Royal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Floraholland Royal 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.
Ability to lead change in Technology & Operations field
– Floraholland Royal 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 Floraholland Royal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Royal FloraHolland: The Dutch Floriculture Supply Chain 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
- Floraholland Royal 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 Floraholland Royal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Royal FloraHolland: The Dutch Floriculture Supply Chain Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Floraholland Royal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Royal FloraHolland: The Dutch Floriculture Supply Chain 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.
Effective Research and Development (R&D)
– Floraholland Royal 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 Royal FloraHolland: The Dutch Floriculture Supply Chain - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Technology & Operations industry
– Royal FloraHolland: The Dutch Floriculture Supply Chain firm has clearly differentiated products in the market place. This has enabled Floraholland Royal to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Floraholland Royal to invest into research and development (R&D) and innovation.
High brand equity
– Floraholland Royal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Floraholland Royal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Royal FloraHolland: The Dutch Floriculture Supply Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal FloraHolland: The Dutch Floriculture Supply Chain are -
Lack of clear differentiation of Floraholland Royal products
– To increase the profitability and margins on the products, Floraholland Royal needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Royal FloraHolland: The Dutch Floriculture Supply Chain HBR case study mentions - Floraholland Royal 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.
Slow decision making process
– As mentioned earlier in the report, Floraholland Royal 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. Floraholland Royal 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.
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 Floraholland Royal supply chain. Even after few cautionary changes mentioned in the HBR case study - Royal FloraHolland: The Dutch Floriculture Supply Chain, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Floraholland Royal vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Royal FloraHolland: The Dutch Floriculture Supply Chain 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 Royal FloraHolland: The Dutch Floriculture Supply Chain can leverage the sales team experience to cultivate customer relationships as Floraholland Royal is planning to shift buying processes online.
Interest costs
– Compare to the competition, Floraholland Royal 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.
Need for greater diversity
– Floraholland Royal 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Royal FloraHolland: The Dutch Floriculture Supply Chain, in the dynamic environment Floraholland Royal has struggled to respond to the nimble upstart competition. Floraholland Royal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Floraholland Royal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Royal FloraHolland: The Dutch Floriculture Supply Chain can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Floraholland Royal, firm in the HBR case study Royal FloraHolland: The Dutch Floriculture Supply Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson, Ken Mark suggests that, Floraholland Royal 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.
Opportunities Royal FloraHolland: The Dutch Floriculture Supply Chain | 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 Royal FloraHolland: The Dutch Floriculture Supply Chain are -
Leveraging digital technologies
– Floraholland Royal 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.
Creating value in data economy
– The success of analytics program of Floraholland Royal has opened avenues for new revenue streams for the organization in the industry. This can help Floraholland Royal to build a more holistic ecosystem as suggested in the Royal FloraHolland: The Dutch Floriculture Supply Chain case study. Floraholland Royal can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Floraholland Royal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Floraholland Royal 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.
Buying journey improvements
– Floraholland Royal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Royal FloraHolland: The Dutch Floriculture Supply Chain 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.
Learning at scale
– Online learning technologies has now opened space for Floraholland Royal to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Floraholland Royal 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. Floraholland Royal 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.
Loyalty marketing
– Floraholland Royal 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Floraholland Royal can use these opportunities to build new business models that can help the communities that Floraholland Royal operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 Floraholland Royal 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Floraholland Royal 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, Floraholland Royal 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 Floraholland Royal 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 Technology & Operations segment.
Threats Royal FloraHolland: The Dutch Floriculture Supply Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Royal FloraHolland: The Dutch Floriculture Supply Chain are -
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 Floraholland Royal in the Technology & Operations sector and impact the bottomline of the organization.
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.
Environmental challenges
– Floraholland Royal 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. Floraholland Royal can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Stagnating economy with rate increase
– Floraholland Royal 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.
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 Floraholland Royal business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Floraholland Royal
– 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 Floraholland Royal.
Technology acceleration in Forth Industrial Revolution
– Floraholland Royal has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Floraholland Royal 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Royal FloraHolland: The Dutch Floriculture Supply Chain, Floraholland Royal 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 .
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.
Shortening product life cycle
– it is one of the major threat that Floraholland Royal is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Floraholland Royal 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 Technology & Operations industry regulations.
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. Floraholland Royal 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Floraholland Royal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Royal FloraHolland: The Dutch Floriculture Supply Chain 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 Royal FloraHolland: The Dutch Floriculture Supply Chain 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 Royal FloraHolland: The Dutch Floriculture Supply Chain 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 Royal FloraHolland: The Dutch Floriculture Supply Chain 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 Royal FloraHolland: The Dutch Floriculture Supply Chain 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 Floraholland Royal needs to make to build a sustainable competitive advantage.