Fairdeal Appliances: Managing the Dealer Network for Optimal Sales SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fairdeal Appliances: Managing the Dealer Network for Optimal Sales
In January 2018, the regional manager of Fairdeal Appliances (Fairdeal) was deliberating the merits of continuing with a selective distribution strategy in Denpasar, Bali. Abdul Electronics, Denpasar's biggest retail outlet for Fairdeal appliances, had just taken on a dealership for Technica, which was a strong competitor to Fairdeal. However, if Fairdeal responded by approaching additional retail outlets to carry its appliances, it risked an increase in intra-channel competition, which could result in less dealer motivation to sell Fairdeal appliances and an overall reduction in Fairdeal sales in Denpasar. The regional manager also knew that if Fairdeal did not increase its presence through additional retail outlets, it would likely continue to lose sales from Abdul Electronics, but would have no possibility of making up the shortfall. In future, other retailers who sold Fairdeal appliances might also become Technica dealers. Had Fairdeal's selective distribution strategy run its course? Should Fairdeal open up the market and pursue an intensive distribution strategy? The entire market was waiting for a response from Fairdeal. Jaydeep Mukherjee is affiliated with Management Development Institute.
Swot Analysis of "Fairdeal Appliances: Managing the Dealer Network for Optimal Sales" written by Jaydeep Mukherjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fairdeal Appliances facing as an external strategic factors. Some of the topics covered in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales case study are - Strategic Management Strategies, Sales, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Fairdeal Appliances: Managing the Dealer Network for Optimal Sales casestudy better are - – cloud computing is disrupting traditional business models, geopolitical disruptions, increasing transportation and logistics costs, there is backlash against globalization, increasing commodity prices, technology disruption, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Fairdeal Appliances: Managing the Dealer Network for Optimal Sales
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fairdeal Appliances, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fairdeal Appliances 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales can be done for the following purposes –
1. Strategic planning using facts provided in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales case study
2. Improving business portfolio management of Fairdeal Appliances
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 Fairdeal Appliances
Strengths Fairdeal Appliances: Managing the Dealer Network for Optimal Sales | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fairdeal Appliances in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales Harvard Business Review case study are -
Ability to recruit top talent
– Fairdeal Appliances is one of the leading recruiters in the industry. Managers in the Fairdeal Appliances: Managing the Dealer Network for Optimal Sales are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Fairdeal Appliances 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 Fairdeal Appliances is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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.
Innovation driven organization
– Fairdeal Appliances is one of the most innovative firm in sector. Manager in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Fairdeal Appliances has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Sales & Marketing field
– Fairdeal Appliances 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 Fairdeal Appliances in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Fairdeal Appliances 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.
Training and development
– Fairdeal Appliances has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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.
Analytics focus
– Fairdeal Appliances 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 Jaydeep Mukherjee 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.
Strong track record of project management
– Fairdeal Appliances is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Fairdeal Appliances has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fairdeal Appliances 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.
Low bargaining power of suppliers
– Suppliers of Fairdeal Appliances in the sector have low bargaining power. Fairdeal Appliances: Managing the Dealer Network for Optimal Sales has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fairdeal Appliances to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Fairdeal Appliances: Managing the Dealer Network for Optimal Sales | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fairdeal Appliances: Managing the Dealer Network for Optimal Sales are -
Skills based hiring
– The stress on hiring functional specialists at Fairdeal Appliances 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales can leverage the sales team experience to cultivate customer relationships as Fairdeal Appliances is planning to shift buying processes online.
Products dominated business model
– Even though Fairdeal Appliances 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 - Fairdeal Appliances: Managing the Dealer Network for Optimal Sales should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales, it seems that the employees of Fairdeal Appliances don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Fairdeal Appliances 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.
High cash cycle compare to competitors
Fairdeal Appliances 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.
Lack of clear differentiation of Fairdeal Appliances products
– To increase the profitability and margins on the products, Fairdeal Appliances needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Fairdeal Appliances, firm in the HBR case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales, is just above the industry average. Fairdeal Appliances 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fairdeal Appliances is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Fairdeal Appliances: Managing the Dealer Network for Optimal Sales | 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fairdeal Appliances can use these opportunities to build new business models that can help the communities that Fairdeal Appliances operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fairdeal Appliances 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, Fairdeal Appliances: Managing the Dealer Network for Optimal Sales, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fairdeal Appliances 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. Fairdeal Appliances 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fairdeal Appliances 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 Fairdeal Appliances has opened avenues for new revenue streams for the organization in the industry. This can help Fairdeal Appliances to build a more holistic ecosystem as suggested in the Fairdeal Appliances: Managing the Dealer Network for Optimal Sales case study. Fairdeal Appliances can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Fairdeal Appliances can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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.
Better consumer reach
– The expansion of the 5G network will help Fairdeal Appliances to increase its market reach. Fairdeal Appliances 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.
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. Fairdeal Appliances can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fairdeal Appliances 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 Fairdeal Appliances to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fairdeal Appliances is facing challenges because of the dominance of functional experts in the organization. Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Sales & Marketing industry, but it has also influenced the consumer preferences. Fairdeal Appliances can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Fairdeal Appliances 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.
Loyalty marketing
– Fairdeal Appliances 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.
Threats Fairdeal Appliances: Managing the Dealer Network for Optimal Sales External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales are -
Environmental challenges
– Fairdeal Appliances 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. Fairdeal Appliances can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fairdeal Appliances with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Fairdeal Appliances 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.
High dependence on third party suppliers
– Fairdeal Appliances 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.
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 Fairdeal Appliances 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 Fairdeal Appliances in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fairdeal Appliances 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales .
Regulatory challenges
– Fairdeal Appliances 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Fairdeal Appliances is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fairdeal Appliances: Managing the Dealer Network for Optimal Sales, Fairdeal Appliances may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fairdeal Appliances 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.
Weighted SWOT Analysis of Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances: Managing the Dealer Network for Optimal Sales 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 Fairdeal Appliances needs to make to build a sustainable competitive advantage.
