Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga
As yoga grew in popularity in Singapore, there were many new yoga studios set up in attempts to tap into this growing service industry. Space & Light Studios Pte Ltd was one of them. A small and medium enterprise set up in December 2012, it differentiated itself by offering yoga classes that emphasised on the optimal alignment of the body. This case study explores the entrepreneurial journey of the owners of Space & Light Studios and examines the viability of this yoga business utilising Cost-Volume-Profit analysis - a management accounting tool.
Swot Analysis of "Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga" written by Wei Hwa Chua, Wei Chern Chua, Beng Geok Wee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yoga Studios facing as an external strategic factors. Some of the topics covered in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yoga Studios, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yoga Studios 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga can be done for the following purposes –
1. Strategic planning using facts provided in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga case study
2. Improving business portfolio management of Yoga Studios
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yoga Studios
Strengths Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yoga Studios in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga Harvard Business Review case study are -
Ability to recruit top talent
– Yoga Studios is one of the leading recruiters in the industry. Managers in the Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Yoga Studios 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.
High brand equity
– Yoga Studios has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yoga Studios to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Yoga Studios 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 Yoga Studios in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Yoga Studios 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.
Successful track record of launching new products
– Yoga Studios has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yoga Studios 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.
Learning organization
- Yoga Studios 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 Yoga Studios is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Yoga Studios is one of the most innovative firm in sector. Manager in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Yoga Studios has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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.
Highly skilled collaborators
– Yoga Studios 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Yoga Studios is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Yoga Studios 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 Wei Hwa Chua, Wei Chern Chua, Beng Geok Wee 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.
Weaknesses Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga are -
Skills based hiring
– The stress on hiring functional specialists at Yoga Studios 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Yoga Studios has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Yoga Studios 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 bargaining power of channel partners
– Because of the regulatory requirements, Wei Hwa Chua, Wei Chern Chua, Beng Geok Wee suggests that, Yoga Studios 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga, in the dynamic environment Yoga Studios has struggled to respond to the nimble upstart competition. Yoga Studios has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga, it seems that the employees of Yoga Studios 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.
Interest costs
– Compare to the competition, Yoga Studios 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.
Lack of clear differentiation of Yoga Studios products
– To increase the profitability and margins on the products, Yoga Studios needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Yoga Studios 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 - Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga can leverage the sales team experience to cultivate customer relationships as Yoga Studios is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Yoga Studios is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Yoga Studios needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yoga Studios to focus more on services rather than just following the product oriented approach.
Opportunities Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga | 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yoga Studios in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Yoga Studios 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 Finance & Accounting segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yoga Studios is facing challenges because of the dominance of functional experts in the organization. Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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.
Better consumer reach
– The expansion of the 5G network will help Yoga Studios to increase its market reach. Yoga Studios 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yoga Studios can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Yoga Studios can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Yoga Studios in the consumer business. Now Yoga Studios 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 Yoga Studios has opened avenues for new revenue streams for the organization in the industry. This can help Yoga Studios to build a more holistic ecosystem as suggested in the Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga case study. Yoga Studios can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Yoga Studios 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.
Developing new processes and practices
– Yoga Studios can develop new processes and procedures in Finance & Accounting 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.
Using analytics as competitive advantage
– Yoga Studios 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yoga Studios to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Yoga Studios 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Yoga Studios 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. Yoga Studios 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.
Threats Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga are -
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 Yoga Studios business can come under increasing regulations regarding data privacy, data security, 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga, Yoga Studios may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Yoga Studios with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Yoga Studios has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Yoga Studios needs to keep up with the evolution of technology in the Finance & Accounting 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.
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. Yoga Studios 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Yoga Studios 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.
Consumer confidence and its impact on Yoga Studios 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yoga Studios 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga .
Environmental challenges
– Yoga Studios 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. Yoga Studios can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Shortening product life cycle
– it is one of the major threat that Yoga Studios is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Yoga Studios 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 Finance & Accounting 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.
Weighted SWOT Analysis of Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Space & Light Studios: Cost-Volume-Profit Analysis and the Business of Yoga 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 Yoga Studios needs to make to build a sustainable competitive advantage.
