Natura: Global Beauty Made in Brazil, Portuguese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Natura: Global Beauty Made in Brazil, Portuguese Version
Explores the globalization strategies of Natura, Brazil's largest cosmetics company. Founded in 1969, Natura grew using a direct selling model. Led by its three founders, the firm made distinctive use of Brazil's diversity and became characterized by high ethical and environmental standards. Natura began to seek international markets in 1982, but experienced many setbacks until surviving the economic crisis in Argentina in 2001. The company opened operations in France and Mexico in 2005, and the three founders are now exploring opportunities in Moscow. To pursue further globalization, Natura must now decide whether to continue to rely primarily on the direct sales model or to experiment with other models--and whether to make acquisitions or become part of a larger group.
Authors :: Geoffrey G. Jones, Ricardo Reisen de Pinho
Swot Analysis of "Natura: Global Beauty Made in Brazil, Portuguese Version" written by Geoffrey G. Jones, Ricardo Reisen de Pinho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Natura Brazil's facing as an external strategic factors. Some of the topics covered in Natura: Global Beauty Made in Brazil, Portuguese Version case study are - Strategic Management Strategies, Globalization, Mergers & acquisitions, Sales, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Natura: Global Beauty Made in Brazil, Portuguese Version casestudy better are - – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , geopolitical disruptions,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Natura: Global Beauty Made in Brazil, Portuguese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Natura: Global Beauty Made in Brazil, Portuguese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Natura Brazil's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Natura Brazil's 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 Natura: Global Beauty Made in Brazil, Portuguese Version can be done for the following purposes –
1. Strategic planning using facts provided in Natura: Global Beauty Made in Brazil, Portuguese Version case study
2. Improving business portfolio management of Natura Brazil's
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 Natura Brazil's
Strengths Natura: Global Beauty Made in Brazil, Portuguese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Natura Brazil's in Natura: Global Beauty Made in Brazil, Portuguese Version Harvard Business Review case study are -
Training and development
– Natura Brazil's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Natura: Global Beauty Made in Brazil, Portuguese Version 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.
Diverse revenue streams
– Natura Brazil's is present in almost all the verticals within the industry. This has provided firm in Natura: Global Beauty Made in Brazil, Portuguese Version 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.
Superior customer experience
– The customer experience strategy of Natura Brazil's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Global Business field
– Natura Brazil's 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 Natura Brazil's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Natura Brazil's 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 Natura Brazil's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Natura: Global Beauty Made in Brazil, Portuguese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Natura Brazil's 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 Natura: Global Beauty Made in Brazil, Portuguese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Natura: Global Beauty Made in Brazil, Portuguese Version 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Natura Brazil's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Natura Brazil's 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.
Sustainable margins compare to other players in Global Business industry
– Natura: Global Beauty Made in Brazil, Portuguese Version firm has clearly differentiated products in the market place. This has enabled Natura Brazil's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Natura Brazil's to invest into research and development (R&D) and innovation.
Analytics focus
– Natura Brazil's 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 Geoffrey G. Jones, Ricardo Reisen de Pinho 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.
Successful track record of launching new products
– Natura Brazil's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Natura Brazil's 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.
Ability to recruit top talent
– Natura Brazil's is one of the leading recruiters in the industry. Managers in the Natura: Global Beauty Made in Brazil, Portuguese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Natura: Global Beauty Made in Brazil, Portuguese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Natura: Global Beauty Made in Brazil, Portuguese Version are -
Increasing silos among functional specialists
– The organizational structure of Natura Brazil's is dominated by functional specialists. It is not different from other players in the Global Business segment. Natura Brazil's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Natura Brazil's to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Natura: Global Beauty Made in Brazil, Portuguese Version, in the dynamic environment Natura Brazil's has struggled to respond to the nimble upstart competition. Natura Brazil's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Natura Brazil's supply chain. Even after few cautionary changes mentioned in the HBR case study - Natura: Global Beauty Made in Brazil, Portuguese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Natura Brazil's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Natura: Global Beauty Made in Brazil, Portuguese Version, is just above the industry average. Natura Brazil's 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.
Interest costs
– Compare to the competition, Natura Brazil's 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 Natura: Global Beauty Made in Brazil, Portuguese Version, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Natura: Global Beauty Made in Brazil, Portuguese Version, it seems that the employees of Natura Brazil's 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.
Slow to strategic competitive environment developments
– As Natura: Global Beauty Made in Brazil, Portuguese Version HBR case study mentions - Natura Brazil's 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.
Low market penetration in new markets
– Outside its home market of Natura Brazil's, firm in the HBR case study Natura: Global Beauty Made in Brazil, Portuguese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Natura Brazil's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Natura: Global Beauty Made in Brazil, Portuguese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Natura: Global Beauty Made in Brazil, Portuguese Version 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 Natura Brazil's 's lucrative customers.
Opportunities Natura: Global Beauty Made in Brazil, Portuguese Version | 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 Natura: Global Beauty Made in Brazil, Portuguese Version are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Natura Brazil's 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 Natura Brazil's in the consumer business. Now Natura Brazil's can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Natura Brazil's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Natura Brazil's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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. Natura Brazil's 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. Natura Brazil's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Natura Brazil's 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.
Using analytics as competitive advantage
– Natura Brazil's 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 Natura: Global Beauty Made in Brazil, Portuguese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Natura Brazil's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Natura Brazil's is facing challenges because of the dominance of functional experts in the organization. Natura: Global Beauty Made in Brazil, Portuguese Version 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Natura Brazil's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Natura Brazil's can use these opportunities to build new business models that can help the communities that Natura Brazil's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Creating value in data economy
– The success of analytics program of Natura Brazil's has opened avenues for new revenue streams for the organization in the industry. This can help Natura Brazil's to build a more holistic ecosystem as suggested in the Natura: Global Beauty Made in Brazil, Portuguese Version case study. Natura Brazil's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Natura Brazil's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Natura Brazil's can develop new processes and procedures in Global Business 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.
Threats Natura: Global Beauty Made in Brazil, Portuguese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Natura: Global Beauty Made in Brazil, Portuguese Version are -
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. Natura Brazil's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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. Natura Brazil's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Natura Brazil's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Natura Brazil's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Natura: Global Beauty Made in Brazil, Portuguese Version, Natura Brazil's 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 .
Increasing wage structure of Natura Brazil's
– 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 Natura Brazil's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Natura Brazil's 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 Natura: Global Beauty Made in Brazil, Portuguese Version .
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.
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 Natura Brazil's in the Global Business sector and impact the bottomline of the organization.
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. Natura Brazil's 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.
Technology acceleration in Forth Industrial Revolution
– Natura Brazil's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Natura Brazil's needs to keep up with the evolution of technology in the Global Business 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.
Regulatory challenges
– Natura Brazil's 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.
Weighted SWOT Analysis of Natura: Global Beauty Made in Brazil, Portuguese Version 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 Natura: Global Beauty Made in Brazil, Portuguese Version 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 Natura: Global Beauty Made in Brazil, Portuguese Version 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 Natura: Global Beauty Made in Brazil, Portuguese Version 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 Natura: Global Beauty Made in Brazil, Portuguese Version 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 Natura Brazil's needs to make to build a sustainable competitive advantage.