×




The Virtual Market: "Mom-and-Pop" Shops Reborn SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Virtual Market: "Mom-and-Pop" Shops Reborn


In 2013, two entrepreneurs launched the Virtual Market in Mexico City with a mission to transform small traditional retailers (the so-called "mom-and-pop" shops) into competitive market players. The family-owned shops were strongly embedded in the society, culture, and economy of Mexico and Latin America, producing 50 per cent of the region's retail sales and 15 per cent of Mexico's true gross domestic product. However, economic growth had increased consumers' earnings, leading to previously low-income consumers gaining financial status. The traditional shops were unable to compete with the new demands for cashless payment methods, wider ranges of products and services, and lower prices. To remedy the situation, the Virtual Market gained the trust of the shop owners and worked to improve their financial, technological, and business literacy. By 2017, the Virtual Market had successfully worked with 10,000 shops but had still not attained break-even. Was its business model sustainable in the long term? Could it be replicated in other countries and with other cultures? How could it scale up and secure profits? Jasenko Ljubica and Miguel Montoya are affiliated with Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM).

Authors :: Jasenko Ljubica, Miguel Montoya

Topics :: Innovation & Entrepreneurship

Tags :: Emerging markets, Innovation, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Virtual Market: "Mom-and-Pop" Shops Reborn" written by Jasenko Ljubica, Miguel Montoya includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shops Virtual facing as an external strategic factors. Some of the topics covered in The Virtual Market: "Mom-and-Pop" Shops Reborn case study are - Strategic Management Strategies, Emerging markets, Innovation and Innovation & Entrepreneurship.


Some of the macro environment factors that can be used to understand the The Virtual Market: "Mom-and-Pop" Shops Reborn casestudy better are - – wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , increasing commodity prices, etc



12 Hrs

$59.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now

24 Hrs

$49.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now

48 Hrs

$39.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now







Introduction to SWOT Analysis of The Virtual Market: "Mom-and-Pop" Shops Reborn


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Virtual Market: "Mom-and-Pop" Shops Reborn case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shops Virtual, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shops Virtual 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 The Virtual Market: "Mom-and-Pop" Shops Reborn can be done for the following purposes –
1. Strategic planning using facts provided in The Virtual Market: "Mom-and-Pop" Shops Reborn case study
2. Improving business portfolio management of Shops Virtual
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 Shops Virtual




Strengths The Virtual Market: "Mom-and-Pop" Shops Reborn | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shops Virtual in The Virtual Market: "Mom-and-Pop" Shops Reborn Harvard Business Review case study are -

Training and development

– Shops Virtual has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Virtual Market: "Mom-and-Pop" Shops Reborn 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.

Strong track record of project management

– Shops Virtual is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– Shops Virtual 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 The Virtual Market: "Mom-and-Pop" Shops Reborn HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Cross disciplinary teams

– Horizontal connected teams at the Shops Virtual 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.

Ability to lead change in Innovation & Entrepreneurship field

– Shops Virtual 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 Shops Virtual in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Digital Transformation in Innovation & Entrepreneurship segment

- digital transformation varies from industry to industry. For Shops Virtual digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shops Virtual 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.

Operational resilience

– The operational resilience strategy in the The Virtual Market: "Mom-and-Pop" Shops Reborn 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.

Sustainable margins compare to other players in Innovation & Entrepreneurship industry

– The Virtual Market: "Mom-and-Pop" Shops Reborn firm has clearly differentiated products in the market place. This has enabled Shops Virtual to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Shops Virtual to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

– Suppliers of Shops Virtual in the sector have low bargaining power. The Virtual Market: "Mom-and-Pop" Shops Reborn has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shops Virtual to manage not only supply disruptions but also source products at highly competitive prices.

Successful track record of launching new products

– Shops Virtual has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shops Virtual 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.

High switching costs

– The high switching costs that Shops Virtual 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.

Diverse revenue streams

– Shops Virtual is present in almost all the verticals within the industry. This has provided firm in The Virtual Market: "Mom-and-Pop" Shops Reborn 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 The Virtual Market: "Mom-and-Pop" Shops Reborn | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Virtual Market: "Mom-and-Pop" Shops Reborn are -

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study The Virtual Market: "Mom-and-Pop" Shops Reborn, it seems that the employees of Shops Virtual 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.

Increasing silos among functional specialists

– The organizational structure of Shops Virtual is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Shops Virtual needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shops Virtual to focus more on services rather than just following the product oriented approach.

Aligning sales with marketing

– It come across in the case study The Virtual Market: "Mom-and-Pop" Shops Reborn 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 The Virtual Market: "Mom-and-Pop" Shops Reborn can leverage the sales team experience to cultivate customer relationships as Shops Virtual is planning to shift buying processes online.

Skills based hiring

– The stress on hiring functional specialists at Shops Virtual 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, Shops Virtual 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.

Capital Spending Reduction

– Even during the low interest decade, Shops Virtual 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 dependence on star products

– The top 2 products and services of the firm as mentioned in the The Virtual Market: "Mom-and-Pop" Shops Reborn 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 Shops Virtual has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, firm in the HBR case study The Virtual Market: "Mom-and-Pop" Shops Reborn 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 Shops Virtual 's lucrative customers.

High bargaining power of channel partners

– Because of the regulatory requirements, Jasenko Ljubica, Miguel Montoya suggests that, Shops Virtual 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.

Low market penetration in new markets

– Outside its home market of Shops Virtual, firm in the HBR case study The Virtual Market: "Mom-and-Pop" Shops Reborn needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow decision making process

– As mentioned earlier in the report, Shops Virtual 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. Shops Virtual 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.




Opportunities The Virtual Market: "Mom-and-Pop" Shops Reborn | 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 The Virtual Market: "Mom-and-Pop" Shops Reborn are -

Developing new processes and practices

– Shops Virtual can develop new processes and procedures in Innovation & Entrepreneurship 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, Shops Virtual 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

– Shops Virtual can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Virtual Market: "Mom-and-Pop" Shops Reborn 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 Shops Virtual to increase its market reach. Shops Virtual 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Shops Virtual 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Shops Virtual 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

– Shops Virtual 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.

Using analytics as competitive advantage

– Shops Virtual has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Virtual Market: "Mom-and-Pop" Shops Reborn - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shops Virtual to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Shops Virtual 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, The Virtual Market: "Mom-and-Pop" Shops Reborn, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Loyalty marketing

– Shops Virtual 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.

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 Shops Virtual in the consumer business. Now Shops Virtual can target international markets with far fewer capital restrictions requirements than the existing system.

Creating value in data economy

– The success of analytics program of Shops Virtual has opened avenues for new revenue streams for the organization in the industry. This can help Shops Virtual to build a more holistic ecosystem as suggested in the The Virtual Market: "Mom-and-Pop" Shops Reborn case study. Shops Virtual 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 Shops Virtual can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.




Threats The Virtual Market: "Mom-and-Pop" Shops Reborn External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study The Virtual Market: "Mom-and-Pop" Shops Reborn are -

Stagnating economy with rate increase

– Shops Virtual 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.

Consumer confidence and its impact on Shops Virtual 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.

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 Shops Virtual in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Shops Virtual has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Shops Virtual 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shops Virtual 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.

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. Shops Virtual can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Shops Virtual 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.

Shortening product life cycle

– it is one of the major threat that Shops Virtual is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Shops Virtual

– 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 Shops Virtual.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Virtual Market: "Mom-and-Pop" Shops Reborn, Shops Virtual may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shops Virtual with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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 Shops Virtual business can come under increasing regulations regarding data privacy, data security, etc.




Weighted SWOT Analysis of The Virtual Market: "Mom-and-Pop" Shops Reborn 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 The Virtual Market: "Mom-and-Pop" Shops Reborn 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 The Virtual Market: "Mom-and-Pop" Shops Reborn 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 The Virtual Market: "Mom-and-Pop" Shops Reborn 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 The Virtual Market: "Mom-and-Pop" Shops Reborn 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 Shops Virtual needs to make to build a sustainable competitive advantage.



--- ---

Amicon Corp. (A) SWOT Analysis / TOWS Matrix

E. Raymond Corey, Noel Capon , Sales & Marketing


Arctic Timber AB: Engineered Woods Division (A) SWOT Analysis / TOWS Matrix

Michael L. Tushman, David Kiron, Wendy Smith , Organizational Development


Newsprint Industry SWOT Analysis / TOWS Matrix

Ramon Casadesus-Masanell, James Pyke, Nabil Al-Najjar , Strategy & Execution


Empire Blue Cross and Blue Shield (F) SWOT Analysis / TOWS Matrix

Regina E. Herzlinger, Ramona K. Hilgenkamp , Finance & Accounting


Buckingham Park SWOT Analysis / TOWS Matrix

Arthur I Segel, Joshua A. Katzin , Finance & Accounting


NewGrade Energy Inc. SWOT Analysis / TOWS Matrix

James E. Hatch, Saqib Khan , Finance & Accounting


Valuing the AOL Time Warner Merger SWOT Analysis / TOWS Matrix

Lynda M. Applegate , Innovation & Entrepreneurship