Kova: Becoming a Vietnamese Household Name in Paint SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kova: Becoming a Vietnamese Household Name in Paint
Set in 2016, this case follows Phua Koon Kee, the CEO of Kova Group, one of the largest paint manufacturers in Vietnam, as he pondered upon the business expansion strategy that could elevate the Kova brand's status to that of a household name. Based on a patented NANO technology that used silicates from rice husks to make paint, Kova's products were of higher quality than its competitors, in terms of environmental-friendliness, durability, waterproof properties and anti-fungal capability. Kova's distinct competitive advantage was its adaptation for the tropical climate and its localisation for geographical landscapes in Vietnam and other SE Asian Markets, which were the key reasons Kova was able to enjoy price premiums in its home market. Despite offering innovative and superior-quality products, Kova faced multiple challenges to growth. Domestically, as the Vietnamese economy opened up to the entry of foreign paint companies, competition in the paint industry has intensified. Kova wanted to grow the retail market, where the bulk of its revenue stream was derived, but channel distribution to numerous small stores and brand promotions to end-consumers would demand the company to come up with a well-crafted strategy. Internationally, Kova suffered from a lack of brand presence and a poor country-of-origin image. Given the multi-faceted challenges, Phua is left thinking about developing an effective integrated marketing plan to create a strong brand positioning for Kova. How could he then leverage the distinctiveness of the Kova brand to gain a larger local market share and subsequently conquer overseas markets?
Swot Analysis of "Kova: Becoming a Vietnamese Household Name in Paint" written by Philip Zerrillo, Adina Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kova Paint facing as an external strategic factors. Some of the topics covered in Kova: Becoming a Vietnamese Household Name in Paint case study are - Strategic Management Strategies, Emerging markets and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Kova: Becoming a Vietnamese Household Name in Paint casestudy better are - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
technology disruption, increasing energy prices, etc
Introduction to SWOT Analysis of Kova: Becoming a Vietnamese Household Name in Paint
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kova: Becoming a Vietnamese Household Name in Paint case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kova Paint, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kova Paint 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 Kova: Becoming a Vietnamese Household Name in Paint can be done for the following purposes –
1. Strategic planning using facts provided in Kova: Becoming a Vietnamese Household Name in Paint case study
2. Improving business portfolio management of Kova Paint
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kova Paint
Strengths Kova: Becoming a Vietnamese Household Name in Paint | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kova Paint in Kova: Becoming a Vietnamese Household Name in Paint Harvard Business Review case study are -
Diverse revenue streams
– Kova Paint is present in almost all the verticals within the industry. This has provided firm in Kova: Becoming a Vietnamese Household Name in Paint 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.
Superior customer experience
– The customer experience strategy of Kova Paint in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Kova Paint has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kova: Becoming a Vietnamese Household Name in Paint Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Kova Paint 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.
Learning organization
- Kova Paint 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 Kova Paint is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kova: Becoming a Vietnamese Household Name in Paint Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Kova Paint is one of the most innovative firm in sector. Manager in Kova: Becoming a Vietnamese Household Name in Paint Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– Kova Paint 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 Kova Paint in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Sales & Marketing industry
– Kova: Becoming a Vietnamese Household Name in Paint firm has clearly differentiated products in the market place. This has enabled Kova Paint to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Kova Paint to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Kova Paint has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kova Paint 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.
Operational resilience
– The operational resilience strategy in the Kova: Becoming a Vietnamese Household Name in Paint 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.
Low bargaining power of suppliers
– Suppliers of Kova Paint in the sector have low bargaining power. Kova: Becoming a Vietnamese Household Name in Paint has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kova Paint to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Kova Paint has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kova Paint to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Kova: Becoming a Vietnamese Household Name in Paint | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kova: Becoming a Vietnamese Household Name in Paint are -
Interest costs
– Compare to the competition, Kova Paint 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kova: Becoming a Vietnamese Household Name in Paint, it seems that the employees of Kova Paint 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kova Paint is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kova: Becoming a Vietnamese Household Name in Paint can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Kova: Becoming a Vietnamese Household Name in Paint, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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 bargaining power of channel partners
– Because of the regulatory requirements, Philip Zerrillo, Adina Wong suggests that, Kova Paint 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.
Increasing silos among functional specialists
– The organizational structure of Kova Paint is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Kova Paint needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kova Paint to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kova: Becoming a Vietnamese Household Name in Paint 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 Kova Paint has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Kova: Becoming a Vietnamese Household Name in Paint 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 Kova Paint 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Kova Paint 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.
Low market penetration in new markets
– Outside its home market of Kova Paint, firm in the HBR case study Kova: Becoming a Vietnamese Household Name in Paint 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 Kova: Becoming a Vietnamese Household Name in Paint, is just above the industry average. Kova Paint 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.
Opportunities Kova: Becoming a Vietnamese Household Name in Paint | 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 Kova: Becoming a Vietnamese Household Name in Paint are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Kova Paint 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kova Paint 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. Kova Paint 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.
Building a culture of innovation
– managers at Kova Paint 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 Sales & Marketing segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Kova Paint can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Kova Paint 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, Kova Paint can use these opportunities to build new business models that can help the communities that Kova Paint operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Creating value in data economy
– The success of analytics program of Kova Paint has opened avenues for new revenue streams for the organization in the industry. This can help Kova Paint to build a more holistic ecosystem as suggested in the Kova: Becoming a Vietnamese Household Name in Paint case study. Kova Paint can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Kova Paint can develop new processes and procedures in Sales & Marketing 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.
Better consumer reach
– The expansion of the 5G network will help Kova Paint to increase its market reach. Kova Paint 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kova Paint can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kova Paint 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 Kova Paint to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Kova Paint can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kova: Becoming a Vietnamese Household Name in Paint 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.
Using analytics as competitive advantage
– Kova Paint 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 Kova: Becoming a Vietnamese Household Name in Paint - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kova Paint to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Kova: Becoming a Vietnamese Household Name in Paint External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kova: Becoming a Vietnamese Household Name in Paint are -
Technology acceleration in Forth Industrial Revolution
– Kova Paint has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kova Paint needs to keep up with the evolution of technology in the Sales & Marketing 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.
Regulatory challenges
– Kova Paint 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 Sales & Marketing industry regulations.
Increasing wage structure of Kova Paint
– 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 Kova Paint.
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. Kova Paint 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
– Kova Paint 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kova Paint with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Kova Paint 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kova Paint can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kova Paint 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 Kova: Becoming a Vietnamese Household Name in Paint .
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 Kova Paint business can come under increasing regulations regarding data privacy, data security, etc.
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 Kova Paint.
Shortening product life cycle
– it is one of the major threat that Kova Paint is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Kova Paint needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Kova: Becoming a Vietnamese Household Name in Paint 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 Kova: Becoming a Vietnamese Household Name in Paint 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 Kova: Becoming a Vietnamese Household Name in Paint 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 Kova: Becoming a Vietnamese Household Name in Paint 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 Kova: Becoming a Vietnamese Household Name in Paint 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 Kova Paint needs to make to build a sustainable competitive advantage.
