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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, wage bills are increasing, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
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 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 -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Sunmoon Sunmoon's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sunmoon Sunmoon's 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.
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.
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.
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.
Highly skilled collaborators
– Sunmoon Sunmoon's 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Innovation driven organization
– Sunmoon Sunmoon's is one of the most innovative firm in sector. Manager in Sunmoon: Transforming an Asset Heavy Legacy Business Model Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Sunmoon Sunmoon's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sunmoon Sunmoon's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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 -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon Sunmoon's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Sunmoon: Transforming an Asset Heavy Legacy Business Model 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 Sunmoon: Transforming an Asset Heavy Legacy Business Model can leverage the sales team experience to cultivate customer relationships as Sunmoon Sunmoon's is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Sunmoon Sunmoon's 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 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.
High cash cycle compare to competitors
Sunmoon Sunmoon's 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.
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.
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.
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.
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.
Lack of clear differentiation of Sunmoon Sunmoon's products
– To increase the profitability and margins on the products, Sunmoon Sunmoon's needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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 Sunmoon Sunmoon's 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sunmoon Sunmoon's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sunmoon Sunmoon's 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. Sunmoon Sunmoon's 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sunmoon Sunmoon's is facing challenges because of the dominance of functional experts in the organization. Sunmoon: Transforming an Asset Heavy Legacy Business Model 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.
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.
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.
Developing new processes and practices
– Sunmoon Sunmoon's can develop new processes and procedures in Strategy & Execution 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sunmoon Sunmoon's 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.
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.
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 -
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.
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 Sunmoon Sunmoon's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sunmoon: Transforming an Asset Heavy Legacy Business Model, Sunmoon Sunmoon's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sunmoon Sunmoon's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Sunmoon Sunmoon's 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.
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 .
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.
