Nykaa.com: A Passion for Beauty SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nykaa.com: A Passion for Beauty
The experience of being an entrepreneur was a childhood dream for Falguni Nayar. The opportunity to build Nykaa.com, a woman centered business, with a multi brand retail format in the beauty and wellness space , and the fact that she was doing it with her daughter Adwaita ( HBS MBA 2013) made it both exciting and meaningful. Still, she was the founder and with that came control over the most important decisions. While she sought advice from many people, Nykaa, like Adwaita, was her baby. How should she structure the organization and the team to best deliver the results she wanted?
Authors :: Paul A. Gompers, Anjali Raina, Rachna Chawla
Swot Analysis of "Nykaa.com: A Passion for Beauty" written by Paul A. Gompers, Anjali Raina, Rachna Chawla includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adwaita Nykaa.com facing as an external strategic factors. Some of the topics covered in Nykaa.com: A Passion for Beauty case study are - Strategic Management Strategies, Decision making, Entrepreneurship, Leadership, Operations management, Organizational culture, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Nykaa.com: A Passion for Beauty casestudy better are - – wage bills are increasing, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing commodity prices, supply chains are disrupted by pandemic , geopolitical disruptions,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Nykaa.com: A Passion for Beauty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nykaa.com: A Passion for Beauty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adwaita Nykaa.com, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adwaita Nykaa.com 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 Nykaa.com: A Passion for Beauty can be done for the following purposes –
1. Strategic planning using facts provided in Nykaa.com: A Passion for Beauty case study
2. Improving business portfolio management of Adwaita Nykaa.com
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Adwaita Nykaa.com
Strengths Nykaa.com: A Passion for Beauty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adwaita Nykaa.com in Nykaa.com: A Passion for Beauty Harvard Business Review case study are -
Successful track record of launching new products
– Adwaita Nykaa.com has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Adwaita Nykaa.com 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
– Adwaita Nykaa.com is present in almost all the verticals within the industry. This has provided firm in Nykaa.com: A Passion for Beauty 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.
Organizational Resilience of Adwaita Nykaa.com
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Adwaita Nykaa.com does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Adwaita Nykaa.com 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 Adwaita Nykaa.com is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nykaa.com: A Passion for Beauty Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Adwaita Nykaa.com 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.
Analytics focus
– Adwaita Nykaa.com 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 Paul A. Gompers, Anjali Raina, Rachna Chawla 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Adwaita Nykaa.com digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Adwaita Nykaa.com 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.
Superior customer experience
– The customer experience strategy of Adwaita Nykaa.com in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Adwaita Nykaa.com is one of the most innovative firm in sector. Manager in Nykaa.com: A Passion for Beauty Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Innovation & Entrepreneurship field
– Adwaita Nykaa.com 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 Adwaita Nykaa.com in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Adwaita Nykaa.com has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nykaa.com: A Passion for Beauty 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.
Low bargaining power of suppliers
– Suppliers of Adwaita Nykaa.com in the sector have low bargaining power. Nykaa.com: A Passion for Beauty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Adwaita Nykaa.com to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Nykaa.com: A Passion for Beauty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nykaa.com: A Passion for Beauty are -
High cash cycle compare to competitors
Adwaita Nykaa.com 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nykaa.com: A Passion for Beauty, in the dynamic environment Adwaita Nykaa.com has struggled to respond to the nimble upstart competition. Adwaita Nykaa.com has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Adwaita Nykaa.com 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.
Interest costs
– Compare to the competition, Adwaita Nykaa.com has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study Nykaa.com: A Passion for Beauty, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
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 Adwaita Nykaa.com supply chain. Even after few cautionary changes mentioned in the HBR case study - Nykaa.com: A Passion for Beauty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Adwaita Nykaa.com vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Nykaa.com: A Passion for Beauty 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 Nykaa.com: A Passion for Beauty can leverage the sales team experience to cultivate customer relationships as Adwaita Nykaa.com is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nykaa.com: A Passion for Beauty 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 Adwaita Nykaa.com has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Nykaa.com: A Passion for Beauty 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 Adwaita Nykaa.com 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nykaa.com: A Passion for Beauty, it seems that the employees of Adwaita Nykaa.com 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nykaa.com: A Passion for Beauty, is just above the industry average. Adwaita Nykaa.com 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.
Opportunities Nykaa.com: A Passion for Beauty | 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 Nykaa.com: A Passion for Beauty are -
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. Adwaita Nykaa.com can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Adwaita Nykaa.com 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Adwaita Nykaa.com can use these opportunities to build new business models that can help the communities that Adwaita Nykaa.com operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Adwaita Nykaa.com in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Adwaita Nykaa.com 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.
Buying journey improvements
– Adwaita Nykaa.com can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nykaa.com: A Passion for Beauty 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Adwaita Nykaa.com is facing challenges because of the dominance of functional experts in the organization. Nykaa.com: A Passion for Beauty 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.
Manufacturing automation
– Adwaita Nykaa.com can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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 Adwaita Nykaa.com in the consumer business. Now Adwaita Nykaa.com can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Adwaita Nykaa.com 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 Innovation & Entrepreneurship segment.
Creating value in data economy
– The success of analytics program of Adwaita Nykaa.com has opened avenues for new revenue streams for the organization in the industry. This can help Adwaita Nykaa.com to build a more holistic ecosystem as suggested in the Nykaa.com: A Passion for Beauty case study. Adwaita Nykaa.com can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Adwaita Nykaa.com can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Adwaita Nykaa.com to increase its market reach. Adwaita Nykaa.com 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.
Threats Nykaa.com: A Passion for Beauty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nykaa.com: A Passion for Beauty are -
Technology acceleration in Forth Industrial Revolution
– Adwaita Nykaa.com has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Adwaita Nykaa.com needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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. Adwaita Nykaa.com needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing wage structure of Adwaita Nykaa.com
– 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 Adwaita Nykaa.com.
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 Adwaita Nykaa.com in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Adwaita Nykaa.com in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Adwaita Nykaa.com is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Adwaita Nykaa.com demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adwaita Nykaa.com with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Adwaita Nykaa.com can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Adwaita Nykaa.com 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 Nykaa.com: A Passion for Beauty .
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 Adwaita Nykaa.com.
High dependence on third party suppliers
– Adwaita Nykaa.com 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.
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.
Weighted SWOT Analysis of Nykaa.com: A Passion for Beauty 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 Nykaa.com: A Passion for Beauty 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 Nykaa.com: A Passion for Beauty 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 Nykaa.com: A Passion for Beauty 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 Nykaa.com: A Passion for Beauty 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 Adwaita Nykaa.com needs to make to build a sustainable competitive advantage.
