Case Study Description of Funskool India: Defend, Lead, and Counter Rivals
In April 2017, the chief executive officer of Funskool India Limited (Funskool), was formulating a growth strategy to increase the company's annual revenues from 1.9 billion in 2016 to 5 billion by 2020. The Indian toy manufacturer had primarily catered to the local market while also exporting toys to developed markets. In 2006, the company expanded its line of products, set up an exclusive design department to develop new products, redesigned its advertising and promotional activities, and expanded into retail outlets. However, Chinese importers were upgrading and moving up the product segment ladder, where Funskool had a strong presence, and video games, which Funskool did not produce, were seeing exponential growth. How could Funskool augment the revenue obtained from the sale of its own brands? With Chinese competitors targeting consumers higher up the segment, should Funskool target customers in the lower economic levels? Should it enter the digital space to prevent a growth stall and catapult itself to the next stage in the growth cycle? The company needed to make some decisions and take steps to face these emerging challenges. Rakesh Gupta is affiliated with Institute of Management Technology, Ghaziabad. Sandeep Puri is affiliated with Asian Institute of Management.
Swot Analysis of "Funskool India: Defend, Lead, and Counter Rivals" written by Rakesh Gupta, Valiaparampil Joseph Sebastian, Sandeep Puri, Kirthivasan Sathya Narayanan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Funskool 20b9 facing as an external strategic factors. Some of the topics covered in Funskool India: Defend, Lead, and Counter Rivals case study are - Strategic Management Strategies, Growth strategy, Manufacturing and Global Business.
Some of the macro environment factors that can be used to understand the Funskool India: Defend, Lead, and Counter Rivals casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Funskool India: Defend, Lead, and Counter Rivals
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Funskool India: Defend, Lead, and Counter Rivals case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Funskool 20b9, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Funskool 20b9 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 Funskool India: Defend, Lead, and Counter Rivals can be done for the following purposes –
1. Strategic planning using facts provided in Funskool India: Defend, Lead, and Counter Rivals case study
2. Improving business portfolio management of Funskool 20b9
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Funskool 20b9
Strengths Funskool India: Defend, Lead, and Counter Rivals | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Funskool 20b9 in Funskool India: Defend, Lead, and Counter Rivals Harvard Business Review case study are -
Diverse revenue streams
– Funskool 20b9 is present in almost all the verticals within the industry. This has provided firm in Funskool India: Defend, Lead, and Counter Rivals 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 Funskool 20b9 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Funskool 20b9 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 Funskool India: Defend, Lead, and Counter Rivals HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Funskool 20b9 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.
Organizational Resilience of Funskool 20b9
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Funskool 20b9 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Funskool 20b9 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.
Learning organization
- Funskool 20b9 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 Funskool 20b9 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Funskool India: Defend, Lead, and Counter Rivals Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Funskool 20b9 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Funskool 20b9 is one of the most innovative firm in sector. Manager in Funskool India: Defend, Lead, and Counter Rivals Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Funskool 20b9 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Funskool 20b9 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Funskool 20b9 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 Rakesh Gupta, Valiaparampil Joseph Sebastian, Sandeep Puri, Kirthivasan Sathya Narayanan 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.
Low bargaining power of suppliers
– Suppliers of Funskool 20b9 in the sector have low bargaining power. Funskool India: Defend, Lead, and Counter Rivals has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Funskool 20b9 to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Funskool India: Defend, Lead, and Counter Rivals | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Funskool India: Defend, Lead, and Counter Rivals are -
Skills based hiring
– The stress on hiring functional specialists at Funskool 20b9 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.
Slow decision making process
– As mentioned earlier in the report, Funskool 20b9 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. Funskool 20b9 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, Funskool 20b9 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.
Low market penetration in new markets
– Outside its home market of Funskool 20b9, firm in the HBR case study Funskool India: Defend, Lead, and Counter Rivals needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Funskool 20b9 has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Funskool India: Defend, Lead, and Counter Rivals should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Funskool India: Defend, Lead, and Counter Rivals 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 Funskool 20b9 has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Rakesh Gupta, Valiaparampil Joseph Sebastian, Sandeep Puri, Kirthivasan Sathya Narayanan suggests that, Funskool 20b9 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Funskool India: Defend, Lead, and Counter Rivals, is just above the industry average. Funskool 20b9 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.
Aligning sales with marketing
– It come across in the case study Funskool India: Defend, Lead, and Counter Rivals that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Funskool India: Defend, Lead, and Counter Rivals can leverage the sales team experience to cultivate customer relationships as Funskool 20b9 is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Funskool 20b9 is dominated by functional specialists. It is not different from other players in the Global Business segment. Funskool 20b9 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Funskool 20b9 to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Funskool 20b9 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.
Opportunities Funskool India: Defend, Lead, and Counter Rivals | 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 Funskool India: Defend, Lead, and Counter Rivals are -
Developing new processes and practices
– Funskool 20b9 can develop new processes and procedures in Global Business 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.
Manufacturing automation
– Funskool 20b9 can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Using analytics as competitive advantage
– Funskool 20b9 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 Funskool India: Defend, Lead, and Counter Rivals - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Funskool 20b9 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Funskool 20b9 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 Global Business segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Funskool 20b9 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Funskool 20b9 in the consumer business. Now Funskool 20b9 can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Funskool 20b9 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Funskool 20b9 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. Funskool 20b9 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.
Buying journey improvements
– Funskool 20b9 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Funskool India: Defend, Lead, and Counter Rivals 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.
Leveraging digital technologies
– Funskool 20b9 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.
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. Funskool 20b9 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, Funskool 20b9 can use these opportunities to build new business models that can help the communities that Funskool 20b9 operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Funskool 20b9 to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Funskool India: Defend, Lead, and Counter Rivals External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Funskool India: Defend, Lead, and Counter Rivals are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Funskool 20b9 in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Funskool 20b9 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Funskool 20b9 needs to understand the core reasons impacting the Global Business 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. Funskool 20b9 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
– Funskool 20b9 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.
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.
Increasing wage structure of Funskool 20b9
– 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 Funskool 20b9.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Funskool India: Defend, Lead, and Counter Rivals, Funskool 20b9 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Funskool 20b9.
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 Funskool 20b9 business can come under increasing regulations regarding data privacy, data security, etc.
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 Funskool 20b9 in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Funskool 20b9 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 Global Business industry regulations.
Consumer confidence and its impact on Funskool 20b9 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 Funskool India: Defend, Lead, and Counter Rivals 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 Funskool India: Defend, Lead, and Counter Rivals 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 Funskool India: Defend, Lead, and Counter Rivals 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 Funskool India: Defend, Lead, and Counter Rivals 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 Funskool India: Defend, Lead, and Counter Rivals 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 Funskool 20b9 needs to make to build a sustainable competitive advantage.
