Zalora: Dressing Up the Mobile App to Engage Customers SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Zalora: Dressing Up the Mobile App to Engage Customers
In March 2013, Zalora, a leading online fashion retailer in Asia-Pacific, had diversified it sales channels by launching the Zalora mobile app. Almost three years on, Tito Costa, the Managing Director of Zalora, is faced with some hard-hitting questions, specifically in relation to where he should focus the company's future investments. Although the mobile app was an important channel to draw in customers, conversion rates and retention needed improvement. Tito knew that the question was not whether to have a mobile app or not, it was about getting the best value from it. What investments and incentives were needed to create a large and growing set of loyal customers who would see the Zalora as their go-to app for all their fashion needs? Did Zalora have the resources to execute these plans? And, importantly, would these investments be worthwhile?
Authors :: Srinivas K. Reddy, Sandeep R. Chandukala, Sarita Mathur
Swot Analysis of "Zalora: Dressing Up the Mobile App to Engage Customers" written by Srinivas K. Reddy, Sandeep R. Chandukala, Sarita Mathur includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zalora App facing as an external strategic factors. Some of the topics covered in Zalora: Dressing Up the Mobile App to Engage Customers case study are - Strategic Management Strategies, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Zalora: Dressing Up the Mobile App to Engage Customers casestudy better are - – central banks are concerned over increasing inflation, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
supply chains are disrupted by pandemic , there is backlash against globalization, etc
Introduction to SWOT Analysis of Zalora: Dressing Up the Mobile App to Engage Customers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zalora: Dressing Up the Mobile App to Engage Customers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zalora App, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zalora App 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 Zalora: Dressing Up the Mobile App to Engage Customers can be done for the following purposes –
1. Strategic planning using facts provided in Zalora: Dressing Up the Mobile App to Engage Customers case study
2. Improving business portfolio management of Zalora App
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 Zalora App
Strengths Zalora: Dressing Up the Mobile App to Engage Customers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zalora App in Zalora: Dressing Up the Mobile App to Engage Customers Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Zalora App 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.
Strong track record of project management
– Zalora App is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Zalora App 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 Zalora App in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Zalora App is one of the leading recruiters in the industry. Managers in the Zalora: Dressing Up the Mobile App to Engage Customers are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Zalora App 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 Srinivas K. Reddy, Sandeep R. Chandukala, Sarita Mathur 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.
High brand equity
– Zalora App has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zalora App to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Zalora App digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zalora App 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.
Organizational Resilience of Zalora App
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zalora App does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Zalora App is one of the most innovative firm in sector. Manager in Zalora: Dressing Up the Mobile App to Engage Customers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Zalora App has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Zalora: Dressing Up the Mobile App to Engage Customers 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.
Superior customer experience
– The customer experience strategy of Zalora App in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Zalora App in the sector have low bargaining power. Zalora: Dressing Up the Mobile App to Engage Customers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zalora App to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Zalora: Dressing Up the Mobile App to Engage Customers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zalora: Dressing Up the Mobile App to Engage Customers are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Zalora: Dressing Up the Mobile App to Engage Customers, is just above the industry average. Zalora App 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora App has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Srinivas K. Reddy, Sandeep R. Chandukala, Sarita Mathur suggests that, Zalora App 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.
Low market penetration in new markets
– Outside its home market of Zalora App, firm in the HBR case study Zalora: Dressing Up the Mobile App to Engage Customers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Zalora: Dressing Up the Mobile App to Engage Customers HBR case study mentions - Zalora App 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.
Capital Spending Reduction
– Even during the low interest decade, Zalora App 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.
Lack of clear differentiation of Zalora App products
– To increase the profitability and margins on the products, Zalora App needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora App 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Zalora App is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Zalora App needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zalora App to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Zalora: Dressing Up the Mobile App to Engage Customers, 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.
Slow decision making process
– As mentioned earlier in the report, Zalora App 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. Zalora App 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.
Opportunities Zalora: Dressing Up the Mobile App to Engage Customers | 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 Zalora: Dressing Up the Mobile App to Engage Customers are -
Manufacturing automation
– Zalora App can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zalora App can use these opportunities to build new business models that can help the communities that Zalora App operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zalora App is facing challenges because of the dominance of functional experts in the organization. Zalora: Dressing Up the Mobile App to Engage Customers case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zalora App can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Zalora App 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. Zalora App can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Zalora App 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.
Leveraging digital technologies
– Zalora App 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.
Buying journey improvements
– Zalora App can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Zalora: Dressing Up the Mobile App to Engage Customers 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.
Loyalty marketing
– Zalora App 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.
Better consumer reach
– The expansion of the 5G network will help Zalora App to increase its market reach. Zalora App 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.
Creating value in data economy
– The success of analytics program of Zalora App has opened avenues for new revenue streams for the organization in the industry. This can help Zalora App to build a more holistic ecosystem as suggested in the Zalora: Dressing Up the Mobile App to Engage Customers case study. Zalora App can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Zalora App 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 Zalora: Dressing Up the Mobile App to Engage Customers - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zalora App to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Zalora: Dressing Up the Mobile App to Engage Customers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Zalora: Dressing Up the Mobile App to Engage Customers are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zalora App with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Zalora App 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.
Shortening product life cycle
– it is one of the major threat that Zalora App is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Zalora App
– 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 Zalora App.
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. Zalora App needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zalora App 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.
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 Zalora App.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zalora App 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 Zalora: Dressing Up the Mobile App to Engage Customers .
Technology acceleration in Forth Industrial Revolution
– Zalora App has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Zalora App 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.
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. Zalora App can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Zalora App 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Zalora: Dressing Up the Mobile App to Engage Customers, Zalora App 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 .
Weighted SWOT Analysis of Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora: Dressing Up the Mobile App to Engage Customers 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 Zalora App needs to make to build a sustainable competitive advantage.