Snapdeal: A Nightmare or a Benefit in Reverse Logistics? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Snapdeal: A Nightmare or a Benefit in Reverse Logistics?
In 2015, Snapdeal, an e-commerce company in India, faced a supply chain situation in reverse logistics. In conforming to the industry trends, the company had a policy on assured product returns, which led to most customers returning to an online merchant for future purchases. However, by the end of 2015, the estimated worth of products returned under the Indian e-commerce platform was $800 million to $1 billion. The rate of returns of online products could add substantial logistics costs to each product return, hampering the industry's growth. Snapdeal had some serious questions to address. Should it reverse its policy and not give customers a chance to return products? Should the company connect organizations and retailers with customers and derive valuable feedback from them? Should Snapdeal alter its product return policy in favour of a "free returns" or "no questions asked" return policy? Would corrective action be required for the e-commerce industry so companies like Snapdeal could create a return policy for customers who had legitimate reasons to return products? Poonam Garg is affiliated with Institute of Management Technology, Ghaziabad. Rashmi Kumar Aggarwal is affiliated with Institute of Management Technology, Ghaziabad.
Swot Analysis of "Snapdeal: A Nightmare or a Benefit in Reverse Logistics?" written by Poonam Garg, Rashmi Kumar Aggarwal, Vaibhav Garg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Snapdeal Return facing as an external strategic factors. Some of the topics covered in Snapdeal: A Nightmare or a Benefit in Reverse Logistics? case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the Snapdeal: A Nightmare or a Benefit in Reverse Logistics? casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing transportation and logistics costs, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing energy prices, cloud computing is disrupting traditional business models,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Snapdeal: A Nightmare or a Benefit in Reverse Logistics?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Snapdeal: A Nightmare or a Benefit in Reverse Logistics? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Snapdeal Return, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Snapdeal Return 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? can be done for the following purposes –
1. Strategic planning using facts provided in Snapdeal: A Nightmare or a Benefit in Reverse Logistics? case study
2. Improving business portfolio management of Snapdeal Return
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 Snapdeal Return
Strengths Snapdeal: A Nightmare or a Benefit in Reverse Logistics? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Snapdeal Return in Snapdeal: A Nightmare or a Benefit in Reverse Logistics? Harvard Business Review case study are -
Learning organization
- Snapdeal Return 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 Snapdeal Return is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Snapdeal: A Nightmare or a Benefit in Reverse Logistics? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Snapdeal Return 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Snapdeal Return has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Snapdeal Return 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Snapdeal Return digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Snapdeal Return 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.
Low bargaining power of suppliers
– Suppliers of Snapdeal Return in the sector have low bargaining power. Snapdeal: A Nightmare or a Benefit in Reverse Logistics? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Snapdeal Return to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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.
Effective Research and Development (R&D)
– Snapdeal Return 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Snapdeal Return 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 Poonam Garg, Rashmi Kumar Aggarwal, Vaibhav Garg 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.
High brand equity
– Snapdeal Return has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Snapdeal Return to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Snapdeal Return 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 Technology & Operations industry
– Snapdeal: A Nightmare or a Benefit in Reverse Logistics? firm has clearly differentiated products in the market place. This has enabled Snapdeal Return to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Snapdeal Return to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Snapdeal Return 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 Snapdeal Return in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Snapdeal: A Nightmare or a Benefit in Reverse Logistics? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Snapdeal: A Nightmare or a Benefit in Reverse Logistics? are -
Lack of clear differentiation of Snapdeal Return products
– To increase the profitability and margins on the products, Snapdeal Return needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal Return has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Snapdeal Return 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 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 Snapdeal Return supply chain. Even after few cautionary changes mentioned in the HBR case study - Snapdeal: A Nightmare or a Benefit in Reverse Logistics?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Snapdeal Return vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Snapdeal Return 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 - Snapdeal: A Nightmare or a Benefit in Reverse Logistics? should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Snapdeal Return 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.
Capital Spending Reduction
– Even during the low interest decade, Snapdeal Return has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Snapdeal: A Nightmare or a Benefit in Reverse Logistics?, in the dynamic environment Snapdeal Return has struggled to respond to the nimble upstart competition. Snapdeal Return has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Snapdeal Return 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.
Aligning sales with marketing
– It come across in the case study Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? can leverage the sales team experience to cultivate customer relationships as Snapdeal Return is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Snapdeal Return is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Snapdeal: A Nightmare or a Benefit in Reverse Logistics? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Snapdeal: A Nightmare or a Benefit in Reverse Logistics? | 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? are -
Better consumer reach
– The expansion of the 5G network will help Snapdeal Return to increase its market reach. Snapdeal Return 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Snapdeal Return is facing challenges because of the dominance of functional experts in the organization. Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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.
Buying journey improvements
– Snapdeal Return can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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.
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. Snapdeal Return can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Snapdeal Return has opened avenues for new revenue streams for the organization in the industry. This can help Snapdeal Return to build a more holistic ecosystem as suggested in the Snapdeal: A Nightmare or a Benefit in Reverse Logistics? case study. Snapdeal Return can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Snapdeal Return 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. Snapdeal Return 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Snapdeal Return in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Snapdeal Return 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.
Building a culture of innovation
– managers at Snapdeal Return 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.
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 Snapdeal Return 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.
Loyalty marketing
– Snapdeal Return 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
– Snapdeal Return 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Snapdeal Return can use these opportunities to build new business models that can help the communities that Snapdeal Return operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Snapdeal: A Nightmare or a Benefit in Reverse Logistics? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Snapdeal: A Nightmare or a Benefit in Reverse Logistics? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Snapdeal Return 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Snapdeal: A Nightmare or a Benefit in Reverse Logistics?, Snapdeal Return 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 .
Shortening product life cycle
– it is one of the major threat that Snapdeal Return is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Snapdeal Return 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.
Stagnating economy with rate increase
– Snapdeal Return 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.
Regulatory challenges
– Snapdeal Return 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.
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.
Technology acceleration in Forth Industrial Revolution
– Snapdeal Return has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Snapdeal Return 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Snapdeal Return in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Snapdeal Return 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
– Snapdeal Return 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. Snapdeal Return can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High dependence on third party suppliers
– Snapdeal Return high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Snapdeal Return 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal: A Nightmare or a Benefit in Reverse Logistics? 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 Snapdeal Return needs to make to build a sustainable competitive advantage.
