Kids & Company: Entering the U.S. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kids & Company: Entering the U.S.
In April 2017, Victoria Sopik and Jennifer Nashmi, CEO and CFO (respectively) of Kids & Company, a Canadian childcare provider that they had co-founded in the early 2000s and developed into a nearly 100-unit enterprise, are discussing how the company should proceed with its planned U.S. expansion. Kids & Company already has five U.S. childcare centers in and around Chicago, Illinois, and one under construction in Boston, Massachusetts, but before going any further, the two leaders plan to discuss what they have learned so far from their U.S. experience, and how that should inform their strategic growth decisions moving forward. Unlike Canada, the U.S. already has other large, for-profit childcare providers, so Kids & Co. will have to grow in a more mature market, albeit one where Kids & Company's leaders still see substantial opportunity. Company leaders also believe that the company's "boutique" childcare centers, which maintain a strict focus on customer service and flexible childcare options, would be well-received by U.S. consumers, and help it stand out from the existing, more-standardized options. The question now is how, and how fast, to grow. Should it just replicate the exact model it has developed in Canada-which has proven somewhat challenging thus far in the few years it has operated in the U.S.-or adjust elements of its model? Should it look to acquire established providers, or possibly even franchise the brand?
Authors :: Boris Groysberg, Matthew Preble, Katherine Connolly Baden
Swot Analysis of "Kids & Company: Entering the U.S." written by Boris Groysberg, Matthew Preble, Katherine Connolly Baden includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Childcare Kids facing as an external strategic factors. Some of the topics covered in Kids & Company: Entering the U.S. case study are - Strategic Management Strategies, Cross-cultural management, Customers, Entrepreneurship, Growth strategy, Leadership, Organizational culture, Personnel policies, Product development, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Kids & Company: Entering the U.S. casestudy better are - – there is increasing trade war between United States & China, technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Kids & Company: Entering the U.S.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kids & Company: Entering the U.S. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Childcare Kids, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Childcare Kids 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 Kids & Company: Entering the U.S. can be done for the following purposes –
1. Strategic planning using facts provided in Kids & Company: Entering the U.S. case study
2. Improving business portfolio management of Childcare Kids
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Childcare Kids
Strengths Kids & Company: Entering the U.S. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Childcare Kids in Kids & Company: Entering the U.S. Harvard Business Review case study are -
Training and development
– Childcare Kids has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kids & Company: Entering the U.S. 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.
Strong track record of project management
– Childcare Kids is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Childcare Kids 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 Childcare Kids is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kids & Company: Entering the U.S. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Childcare Kids 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 Boris Groysberg, Matthew Preble, Katherine Connolly Baden 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.
Operational resilience
– The operational resilience strategy in the Kids & Company: Entering the U.S. 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Childcare Kids digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Childcare Kids 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 Strategy & Execution field
– Childcare Kids 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 Childcare Kids in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Childcare Kids has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Childcare Kids to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Childcare Kids
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Childcare Kids does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Childcare Kids 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 Kids & Company: Entering the U.S. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Childcare Kids 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 Childcare Kids are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Kids & Company: Entering the U.S. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kids & Company: Entering the U.S. are -
Slow to strategic competitive environment developments
– As Kids & Company: Entering the U.S. HBR case study mentions - Childcare Kids 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.
Skills based hiring
– The stress on hiring functional specialists at Childcare Kids 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.
High cash cycle compare to competitors
Childcare Kids has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Kids & Company: Entering the U.S., it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Kids & Company: Entering the U.S. 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 Childcare Kids 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kids & Company: Entering the U.S., in the dynamic environment Childcare Kids has struggled to respond to the nimble upstart competition. Childcare Kids has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Childcare Kids 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. Childcare Kids 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.
Need for greater diversity
– Childcare Kids 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.
Lack of clear differentiation of Childcare Kids products
– To increase the profitability and margins on the products, Childcare Kids needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Childcare Kids supply chain. Even after few cautionary changes mentioned in the HBR case study - Kids & Company: Entering the U.S., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Childcare Kids vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kids & Company: Entering the U.S. 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 Childcare Kids has relatively successful track record of launching new products.
Opportunities Kids & Company: Entering the U.S. | 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 Kids & Company: Entering the U.S. are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Childcare Kids 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.
Buying journey improvements
– Childcare Kids can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kids & Company: Entering the U.S. 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 Childcare Kids 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Childcare Kids can use these opportunities to build new business models that can help the communities that Childcare Kids operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Childcare Kids has opened avenues for new revenue streams for the organization in the industry. This can help Childcare Kids to build a more holistic ecosystem as suggested in the Kids & Company: Entering the U.S. case study. Childcare Kids can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Childcare Kids 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, Kids & Company: Entering the U.S., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Childcare Kids 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Childcare Kids can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Childcare Kids in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Childcare Kids 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 Kids & Company: Entering the U.S. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Childcare Kids to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Childcare Kids to increase its market reach. Childcare Kids 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Childcare Kids to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Childcare Kids to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Childcare Kids 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. Childcare Kids 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.
Threats Kids & Company: Entering the U.S. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kids & Company: Entering the U.S. are -
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 Childcare Kids.
Stagnating economy with rate increase
– Childcare Kids 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 Childcare Kids business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Childcare Kids 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 Kids & Company: Entering the U.S. .
Increasing wage structure of Childcare Kids
– 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 Childcare Kids.
Shortening product life cycle
– it is one of the major threat that Childcare Kids is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Childcare Kids with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Childcare Kids needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Childcare Kids 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.
High dependence on third party suppliers
– Childcare Kids 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Childcare Kids in the Strategy & Execution industry. The Strategy & Execution 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.
Environmental challenges
– Childcare Kids 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. Childcare Kids can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Kids & Company: Entering the U.S. 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 Kids & Company: Entering the U.S. 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 Kids & Company: Entering the U.S. 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 Kids & Company: Entering the U.S. 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 Kids & Company: Entering the U.S. 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 Childcare Kids needs to make to build a sustainable competitive advantage.
