Offshoring: Where Should KindyBis Make Its Socks? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Offshoring: Where Should KindyBis Make Its Socks?
This case presents a fictitious firm, KindyBis, which must decide whether or not to engage in offshoring, and if so, how. Students structure and model an offshoring decision and choose an international site and suppliers. The case was designed to use a combined SWOT (Strengths-Weaknesses/Opportunities-Threats) - AHP (Analytic Hierarchy Process) technique, but other methods can be used. The instructor is provided with an Excel file containing details of the calculations. In addition, we have produced a generic analysis grid that can model different circumstances depending on the conclusions arrived at during class discussions.
Swot Analysis of "Offshoring: Where Should KindyBis Make Its Socks?" written by Fabien Peyrol, Claudia Rebolledo, Jean-Francois Cordeau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Offshoring Kindybis facing as an external strategic factors. Some of the topics covered in Offshoring: Where Should KindyBis Make Its Socks? case study are - Strategic Management Strategies, International business, Operations management, Sales and Global Business.
Some of the macro environment factors that can be used to understand the Offshoring: Where Should KindyBis Make Its Socks? casestudy better are - – increasing household debt because of falling income levels, technology disruption, there is backlash against globalization, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Offshoring: Where Should KindyBis Make Its Socks?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Offshoring: Where Should KindyBis Make Its Socks? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Offshoring Kindybis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Offshoring Kindybis 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 Offshoring: Where Should KindyBis Make Its Socks? can be done for the following purposes –
1. Strategic planning using facts provided in Offshoring: Where Should KindyBis Make Its Socks? case study
2. Improving business portfolio management of Offshoring Kindybis
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Offshoring Kindybis
Strengths Offshoring: Where Should KindyBis Make Its Socks? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Offshoring Kindybis in Offshoring: Where Should KindyBis Make Its Socks? Harvard Business Review case study are -
Diverse revenue streams
– Offshoring Kindybis is present in almost all the verticals within the industry. This has provided firm in Offshoring: Where Should KindyBis Make Its Socks? 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.
Innovation driven organization
– Offshoring Kindybis is one of the most innovative firm in sector. Manager in Offshoring: Where Should KindyBis Make Its Socks? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Offshoring Kindybis in the sector have low bargaining power. Offshoring: Where Should KindyBis Make Its Socks? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Offshoring Kindybis to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Offshoring Kindybis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Offshoring Kindybis 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.
Effective Research and Development (R&D)
– Offshoring Kindybis 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 Offshoring: Where Should KindyBis Make Its Socks? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Offshoring Kindybis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Offshoring Kindybis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Offshoring Kindybis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Offshoring: Where Should KindyBis Make Its Socks? firm has clearly differentiated products in the market place. This has enabled Offshoring Kindybis to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Offshoring Kindybis to invest into research and development (R&D) and innovation.
High brand equity
– Offshoring Kindybis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Offshoring Kindybis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Offshoring Kindybis is one of the leading recruiters in the industry. Managers in the Offshoring: Where Should KindyBis Make Its Socks? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Offshoring Kindybis 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 Offshoring: Where Should KindyBis Make Its Socks? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Offshoring Kindybis 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.
Weaknesses Offshoring: Where Should KindyBis Make Its Socks? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Offshoring: Where Should KindyBis Make Its Socks? are -
Workers concerns about automation
– As automation is fast increasing in the segment, Offshoring Kindybis 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Offshoring Kindybis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Offshoring: Where Should KindyBis Make Its Socks? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Offshoring Kindybis 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.
Slow decision making process
– As mentioned earlier in the report, Offshoring Kindybis 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. Offshoring Kindybis 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.
Lack of clear differentiation of Offshoring Kindybis products
– To increase the profitability and margins on the products, Offshoring Kindybis needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Offshoring Kindybis supply chain. Even after few cautionary changes mentioned in the HBR case study - Offshoring: Where Should KindyBis Make Its Socks?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Offshoring Kindybis vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Offshoring Kindybis 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.
No frontier risks strategy
– After analyzing the HBR case study Offshoring: Where Should KindyBis Make Its Socks?, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Aligning sales with marketing
– It come across in the case study Offshoring: Where Should KindyBis Make Its Socks? 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 Offshoring: Where Should KindyBis Make Its Socks? can leverage the sales team experience to cultivate customer relationships as Offshoring Kindybis is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Offshoring: Where Should KindyBis Make Its Socks?, is just above the industry average. Offshoring Kindybis 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 strategic competitive environment developments
– As Offshoring: Where Should KindyBis Make Its Socks? HBR case study mentions - Offshoring Kindybis takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Offshoring: Where Should KindyBis Make Its Socks? | 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 Offshoring: Where Should KindyBis Make Its Socks? are -
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 Offshoring Kindybis in the consumer business. Now Offshoring Kindybis can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Offshoring Kindybis 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Offshoring Kindybis 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. Offshoring Kindybis 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.
Learning at scale
– Online learning technologies has now opened space for Offshoring Kindybis 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Offshoring Kindybis 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.
Leveraging digital technologies
– Offshoring Kindybis can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Offshoring Kindybis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Offshoring: Where Should KindyBis Make Its Socks? 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.
Building a culture of innovation
– managers at Offshoring Kindybis 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 Global Business segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Offshoring Kindybis can use these opportunities to build new business models that can help the communities that Offshoring Kindybis operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Offshoring Kindybis can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Offshoring Kindybis 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Offshoring Kindybis is facing challenges because of the dominance of functional experts in the organization. Offshoring: Where Should KindyBis Make Its Socks? 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.
Creating value in data economy
– The success of analytics program of Offshoring Kindybis has opened avenues for new revenue streams for the organization in the industry. This can help Offshoring Kindybis to build a more holistic ecosystem as suggested in the Offshoring: Where Should KindyBis Make Its Socks? case study. Offshoring Kindybis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Offshoring: Where Should KindyBis Make Its Socks? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Offshoring: Where Should KindyBis Make Its Socks? are -
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.
Shortening product life cycle
– it is one of the major threat that Offshoring Kindybis is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Offshoring Kindybis 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.
Stagnating economy with rate increase
– Offshoring Kindybis 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Offshoring Kindybis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Offshoring Kindybis in the Global Business sector and impact the bottomline of the organization.
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 Offshoring Kindybis business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Offshoring Kindybis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Offshoring Kindybis in the Global Business industry. The Global Business 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.
Regulatory challenges
– Offshoring Kindybis 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 Global Business industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Offshoring: Where Should KindyBis Make Its Socks?, Offshoring Kindybis may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
High dependence on third party suppliers
– Offshoring Kindybis 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.
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 Offshoring Kindybis.
Weighted SWOT Analysis of Offshoring: Where Should KindyBis Make Its Socks? 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 Offshoring: Where Should KindyBis Make Its Socks? 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 Offshoring: Where Should KindyBis Make Its Socks? 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 Offshoring: Where Should KindyBis Make Its Socks? 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 Offshoring: Where Should KindyBis Make Its Socks? 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 Offshoring Kindybis needs to make to build a sustainable competitive advantage.
