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 - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, wage bills are increasing, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Strong track record of project management
– Kova Paint is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
Highly skilled collaborators
– Kova Paint 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 Kova: Becoming a Vietnamese Household Name in Paint HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Organizational Resilience of Kova Paint
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kova Paint does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Kova Paint digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kova Paint 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 recruit top talent
– Kova Paint is one of the leading recruiters in the industry. Managers in the Kova: Becoming a Vietnamese Household Name in Paint are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Cross disciplinary teams
– Horizontal connected teams at the Kova Paint 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.
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.
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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kova: Becoming a Vietnamese Household Name in Paint, in the dynamic environment Kova Paint has struggled to respond to the nimble upstart competition. Kova Paint has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kova Paint 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.
High cash cycle compare to competitors
Kova Paint 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Kova Paint 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.
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.
Lack of clear differentiation of Kova Paint products
– To increase the profitability and margins on the products, Kova Paint needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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 Kova Paint in the consumer business. Now Kova Paint can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kova Paint in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Kova Paint can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Kova Paint can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kova Paint 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, Kova: Becoming a Vietnamese Household Name in Paint, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kova Paint in the Sales & Marketing industry. The Sales & Marketing 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.
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.
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.
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.
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.
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 Kova Paint in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kova: Becoming a Vietnamese Household Name in Paint, Kova Paint may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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.
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.
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.