Sunmoon: Transforming an Asset Heavy Legacy Business Model SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sunmoon: Transforming an Asset Heavy Legacy Business Model
Set in 2016, this case presents the ten-year long journey undertaken by SunMoon to transform its legacy business model that had led the company to become a loss-making, cost-inefficient and debt-ridden entity in 2007. Gary Loh, who joined the company in 2007, spearheaded the efforts to restructure the debt, modernise operations, and change the business model. However, the process was arduous, being besieged on one hand by financial issues such as capital inadequacy, downward spiral in revenues and increasing losses; and on the other hand by operational issues such as inter-personal conflicts, debt settlement challenges and labour unrest. The case further discusses how SunMoon, after having divested its non-performing assets and non-core businesses, set out to achieve its new strategic vision to be an asset-light, brand-focused, and consumer-oriented company. Its new business model centred on building and leveraging SunMoon's brand equity, developing a larger retail network across more geographies and dealing in a wider range of products. While SunMoon's deal with Yiguo (Alibaba backed) - the leading fresh food e-commerce company in China, was a testament to its new model, fruits being a commodity product and the highly fragmented nature of the industry raised various concerns: Would SunMoon be able to become the industry benchmark in quality for both buyers and growers, and provide an aggregator platform like Uber or Airbnb? Would it be able to create the last mile connectivity with end-consumers and provide brand differentiation among them?
Swot Analysis of "Sunmoon: Transforming an Asset Heavy Legacy Business Model" written by Simon Schillebeeckx, Sheetal Mittal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sunmoon Sunmoon's facing as an external strategic factors. Some of the topics covered in Sunmoon: Transforming an Asset Heavy Legacy Business Model case study are - Strategic Management Strategies, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sunmoon: Transforming an Asset Heavy Legacy Business Model casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , technology disruption, geopolitical disruptions, increasing energy prices,
wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Sunmoon: Transforming an Asset Heavy Legacy Business Model
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sunmoon: Transforming an Asset Heavy Legacy Business Model case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sunmoon Sunmoon's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sunmoon Sunmoon's 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model can be done for the following purposes –
1. Strategic planning using facts provided in Sunmoon: Transforming an Asset Heavy Legacy Business Model case study
2. Improving business portfolio management of Sunmoon Sunmoon's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sunmoon Sunmoon's
Strengths Sunmoon: Transforming an Asset Heavy Legacy Business Model | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sunmoon Sunmoon's in Sunmoon: Transforming an Asset Heavy Legacy Business Model Harvard Business Review case study are -
Organizational Resilience of Sunmoon Sunmoon's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sunmoon Sunmoon's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Sunmoon Sunmoon's is present in almost all the verticals within the industry. This has provided firm in Sunmoon: Transforming an Asset Heavy Legacy Business Model 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.
Ability to lead change in Strategy & Execution field
– Sunmoon Sunmoon's 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 Sunmoon Sunmoon's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Sunmoon Sunmoon's 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.
Cross disciplinary teams
– Horizontal connected teams at the Sunmoon Sunmoon's 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Sunmoon: Transforming an Asset Heavy Legacy Business Model firm has clearly differentiated products in the market place. This has enabled Sunmoon Sunmoon's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sunmoon Sunmoon's to invest into research and development (R&D) and innovation.
High brand equity
– Sunmoon Sunmoon's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sunmoon Sunmoon's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Sunmoon Sunmoon's in the sector have low bargaining power. Sunmoon: Transforming an Asset Heavy Legacy Business Model has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sunmoon Sunmoon's to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Sunmoon Sunmoon's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon Sunmoon's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Sunmoon Sunmoon's is one of the leading recruiters in the industry. Managers in the Sunmoon: Transforming an Asset Heavy Legacy Business Model are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Sunmoon: Transforming an Asset Heavy Legacy Business Model 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.
Weaknesses Sunmoon: Transforming an Asset Heavy Legacy Business Model | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sunmoon: Transforming an Asset Heavy Legacy Business Model are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sunmoon: Transforming an Asset Heavy Legacy Business Model, is just above the industry average. Sunmoon Sunmoon's 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 existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Sunmoon Sunmoon's supply chain. Even after few cautionary changes mentioned in the HBR case study - Sunmoon: Transforming an Asset Heavy Legacy Business Model, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sunmoon Sunmoon's vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon Sunmoon's has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Sunmoon Sunmoon's 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.
Increasing silos among functional specialists
– The organizational structure of Sunmoon Sunmoon's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sunmoon Sunmoon's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sunmoon Sunmoon's to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Sunmoon Sunmoon's, firm in the HBR case study Sunmoon: Transforming an Asset Heavy Legacy Business Model needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Sunmoon Sunmoon's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Sunmoon: Transforming an Asset Heavy Legacy Business Model, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sunmoon Sunmoon's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sunmoon: Transforming an Asset Heavy Legacy Business Model can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Sunmoon Sunmoon's 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. Sunmoon Sunmoon's 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Simon Schillebeeckx, Sheetal Mittal suggests that, Sunmoon Sunmoon's 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.
Opportunities Sunmoon: Transforming an Asset Heavy Legacy Business Model | 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model are -
Loyalty marketing
– Sunmoon Sunmoon's 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.
Learning at scale
– Online learning technologies has now opened space for Sunmoon Sunmoon's 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.
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. Sunmoon Sunmoon's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Sunmoon Sunmoon's 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
– Sunmoon Sunmoon's 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sunmoon Sunmoon's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Sunmoon Sunmoon's in the consumer business. Now Sunmoon Sunmoon's can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sunmoon Sunmoon's 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 Sunmoon Sunmoon's 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, Sunmoon Sunmoon's 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, Sunmoon: Transforming an Asset Heavy Legacy Business Model, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Sunmoon Sunmoon's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Sunmoon Sunmoon's to increase its market reach. Sunmoon Sunmoon's 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.
Building a culture of innovation
– managers at Sunmoon Sunmoon's 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 Strategy & Execution segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sunmoon Sunmoon's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Sunmoon Sunmoon's has opened avenues for new revenue streams for the organization in the industry. This can help Sunmoon Sunmoon's to build a more holistic ecosystem as suggested in the Sunmoon: Transforming an Asset Heavy Legacy Business Model case study. Sunmoon Sunmoon's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Sunmoon: Transforming an Asset Heavy Legacy Business Model External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sunmoon: Transforming an Asset Heavy Legacy Business Model are -
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 Sunmoon Sunmoon's in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Sunmoon Sunmoon's
– 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 Sunmoon Sunmoon's.
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. Sunmoon Sunmoon's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Sunmoon Sunmoon's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Sunmoon Sunmoon's is facing in Strategy & Execution 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. Sunmoon Sunmoon's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Sunmoon Sunmoon's 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 Strategy & Execution industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sunmoon Sunmoon's 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model .
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 Sunmoon Sunmoon's in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sunmoon Sunmoon's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Sunmoon Sunmoon's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Sunmoon Sunmoon's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon Sunmoon's needs to make to build a sustainable competitive advantage.