Case Study Description of E-Commerce at Williams-Sonoma
Describes Williams-Sonoma's development of a third channel of business on the Internet. Describes the strategies for managing changes in the organizational, operational, and technological structure of the company. The new e-commerce division confronts challenges posed by the company's traditional dual-channel (retail and catalog) approach.
Swot Analysis of "E-Commerce at Williams-Sonoma" written by Rosabeth Moss Kanter, Daniel Galvin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Williams Sonoma's facing as an external strategic factors. Some of the topics covered in E-Commerce at Williams-Sonoma case study are - Strategic Management Strategies, Internet and Technology & Operations.
Some of the macro environment factors that can be used to understand the E-Commerce at Williams-Sonoma casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of E-Commerce at Williams-Sonoma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in E-Commerce at Williams-Sonoma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Williams Sonoma's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Williams Sonoma's 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 E-Commerce at Williams-Sonoma can be done for the following purposes –
1. Strategic planning using facts provided in E-Commerce at Williams-Sonoma case study
2. Improving business portfolio management of Williams Sonoma's
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 Williams Sonoma's
Strengths E-Commerce at Williams-Sonoma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Williams Sonoma's in E-Commerce at Williams-Sonoma Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– E-Commerce at Williams-Sonoma firm has clearly differentiated products in the market place. This has enabled Williams Sonoma's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Williams Sonoma's to invest into research and development (R&D) and innovation.
High brand equity
– Williams Sonoma's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Williams Sonoma's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Williams Sonoma's 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 Rosabeth Moss Kanter, Daniel Galvin 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.
Innovation driven organization
– Williams Sonoma's is one of the most innovative firm in sector. Manager in E-Commerce at Williams-Sonoma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Williams Sonoma's 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 Williams Sonoma's 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.
Ability to lead change in Technology & Operations field
– Williams Sonoma's 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 Williams Sonoma's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Williams Sonoma's 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 E-Commerce at Williams-Sonoma HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Williams Sonoma's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in E-Commerce at Williams-Sonoma 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.
Successful track record of launching new products
– Williams Sonoma's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Williams Sonoma's 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.
Diverse revenue streams
– Williams Sonoma's is present in almost all the verticals within the industry. This has provided firm in E-Commerce at Williams-Sonoma 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Williams Sonoma's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Williams Sonoma's 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.
Weaknesses E-Commerce at Williams-Sonoma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of E-Commerce at Williams-Sonoma are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Williams Sonoma's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study E-Commerce at Williams-Sonoma 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 E-Commerce at Williams-Sonoma 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 Williams Sonoma's 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Williams Sonoma's 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. Williams Sonoma's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Williams Sonoma's 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.
Capital Spending Reduction
– Even during the low interest decade, Williams Sonoma's 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.
Low market penetration in new markets
– Outside its home market of Williams Sonoma's, firm in the HBR case study E-Commerce at Williams-Sonoma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study E-Commerce at Williams-Sonoma, is just above the industry average. Williams Sonoma's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study E-Commerce at Williams-Sonoma, it seems that the employees of Williams Sonoma's 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.
Increasing silos among functional specialists
– The organizational structure of Williams Sonoma's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Williams Sonoma's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Williams Sonoma's to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study E-Commerce at Williams-Sonoma, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Interest costs
– Compare to the competition, Williams Sonoma's 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.
Opportunities E-Commerce at Williams-Sonoma | 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 E-Commerce at Williams-Sonoma are -
Learning at scale
– Online learning technologies has now opened space for Williams Sonoma's 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.
Buying journey improvements
– Williams Sonoma's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. E-Commerce at Williams-Sonoma 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Williams Sonoma's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Williams Sonoma's can use these opportunities to build new business models that can help the communities that Williams Sonoma's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Williams Sonoma's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Williams Sonoma's 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, E-Commerce at Williams-Sonoma, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Williams Sonoma's has opened avenues for new revenue streams for the organization in the industry. This can help Williams Sonoma's to build a more holistic ecosystem as suggested in the E-Commerce at Williams-Sonoma case study. Williams Sonoma's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Williams Sonoma's 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.
Manufacturing automation
– Williams Sonoma's 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.
Loyalty marketing
– Williams Sonoma's 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.
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. Williams Sonoma's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Williams Sonoma's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Williams Sonoma's in the consumer business. Now Williams Sonoma's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats E-Commerce at Williams-Sonoma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study E-Commerce at Williams-Sonoma are -
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 Williams Sonoma's business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Williams Sonoma's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Williams Sonoma's.
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.
Consumer confidence and its impact on Williams Sonoma's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study E-Commerce at Williams-Sonoma, Williams Sonoma's 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 .
Regulatory challenges
– Williams Sonoma's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Williams Sonoma's 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 E-Commerce at Williams-Sonoma .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Williams Sonoma's 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.
Shortening product life cycle
– it is one of the major threat that Williams Sonoma's is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Williams Sonoma's 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.
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 Williams Sonoma's in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of E-Commerce at Williams-Sonoma 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 E-Commerce at Williams-Sonoma 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 E-Commerce at Williams-Sonoma 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 E-Commerce at Williams-Sonoma 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 E-Commerce at Williams-Sonoma 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 Williams Sonoma's needs to make to build a sustainable competitive advantage.
