Case Study Description of Spreading Happiness: Warm Fuzz Cards
This is part of the subset of Ivey cases and technical notes written for Introductory-Level courses.In December 2008, Erica Mills and her husband, Craig, were making plans. They had recently decided to start a family within the next 12 months and were now making decisions about how to manage their careers as they were about to take this momentous step. Erica had started Warm Fuzz Cards, a Toronto-based greeting card company, just over two years ago in 2006. The business was growing slowly but profitably. Craig was employed as a human resources executive at a large company. He was very supportive of Erica's business. In fact, he believed that the business could grow much more quickly. Erica, on the other hand, liked her slow growth strategy. However, she was not sure that she could manage the business as it was currently structured and raise a family at the same time. They were going to have to decide what to do soon. They would need time to decide how fast to grow, develop a plan, raise money, and possibly hire staff, all before they started their family. This case provides students with an example of an entrepreneurial start-up and an understanding of: 1) the decision of how fast to grow 2) the decision of how much and where to invest in a growing business 3) how management skills, knowledge and preferences can impact decision-making in entrepreneurial/family business ventures 4) how important cash management is in the early stage of growth 5) how various stages in the development of a new venture will dictate the need for the detailed financial tracking and management of a business. This case is appropriate for a 75-minute introductory entrepreneurship class.
Swot Analysis of "Spreading Happiness: Warm Fuzz Cards" written by Colleen Sharen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Erica Fuzz facing as an external strategic factors. Some of the topics covered in Spreading Happiness: Warm Fuzz Cards case study are - Strategic Management Strategies, Entrepreneurial management, Informal leadership, Organizational culture and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Spreading Happiness: Warm Fuzz Cards casestudy better are - – cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, technology disruption, talent flight as more people leaving formal jobs, wage bills are increasing, increasing commodity prices, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Spreading Happiness: Warm Fuzz Cards
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Spreading Happiness: Warm Fuzz Cards case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Erica Fuzz, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Erica Fuzz 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 Spreading Happiness: Warm Fuzz Cards can be done for the following purposes –
1. Strategic planning using facts provided in Spreading Happiness: Warm Fuzz Cards case study
2. Improving business portfolio management of Erica Fuzz
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 Erica Fuzz
Strengths Spreading Happiness: Warm Fuzz Cards | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Erica Fuzz in Spreading Happiness: Warm Fuzz Cards Harvard Business Review case study are -
Organizational Resilience of Erica Fuzz
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Erica Fuzz does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Erica Fuzz is one of the most innovative firm in sector. Manager in Spreading Happiness: Warm Fuzz Cards Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Erica Fuzz 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
– Erica Fuzz 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 Spreading Happiness: Warm Fuzz Cards HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Erica Fuzz has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Erica Fuzz has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Erica Fuzz is present in almost all the verticals within the industry. This has provided firm in Spreading Happiness: Warm Fuzz Cards 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.
Low bargaining power of suppliers
– Suppliers of Erica Fuzz in the sector have low bargaining power. Spreading Happiness: Warm Fuzz Cards has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Erica Fuzz to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Erica Fuzz 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 Colleen Sharen 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.
Operational resilience
– The operational resilience strategy in the Spreading Happiness: Warm Fuzz Cards 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
– Spreading Happiness: Warm Fuzz Cards firm has clearly differentiated products in the market place. This has enabled Erica Fuzz to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Erica Fuzz to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Erica Fuzz 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 Spreading Happiness: Warm Fuzz Cards - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Erica Fuzz 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.
Weaknesses Spreading Happiness: Warm Fuzz Cards | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spreading Happiness: Warm Fuzz Cards are -
Aligning sales with marketing
– It come across in the case study Spreading Happiness: Warm Fuzz Cards 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 Spreading Happiness: Warm Fuzz Cards can leverage the sales team experience to cultivate customer relationships as Erica Fuzz is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Erica Fuzz 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.
Slow to strategic competitive environment developments
– As Spreading Happiness: Warm Fuzz Cards HBR case study mentions - Erica Fuzz 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.
Products dominated business model
– Even though Erica Fuzz 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 - Spreading Happiness: Warm Fuzz Cards should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Spreading Happiness: Warm Fuzz Cards 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 Erica Fuzz has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Erica Fuzz, firm in the HBR case study Spreading Happiness: Warm Fuzz Cards needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Erica Fuzz supply chain. Even after few cautionary changes mentioned in the HBR case study - Spreading Happiness: Warm Fuzz Cards, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Erica Fuzz vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Spreading Happiness: Warm Fuzz Cards 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 Erica Fuzz 's lucrative customers.
Need for greater diversity
– Erica Fuzz has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Spreading Happiness: Warm Fuzz Cards, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Erica Fuzz 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.
Opportunities Spreading Happiness: Warm Fuzz Cards | 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 Spreading Happiness: Warm Fuzz Cards are -
Leveraging digital technologies
– Erica Fuzz 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.
Learning at scale
– Online learning technologies has now opened space for Erica Fuzz 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Erica Fuzz 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, Spreading Happiness: Warm Fuzz Cards, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Erica Fuzz in the consumer business. Now Erica Fuzz can target international markets with far fewer capital restrictions requirements than the existing system.
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 Erica Fuzz 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.
Better consumer reach
– The expansion of the 5G network will help Erica Fuzz to increase its market reach. Erica Fuzz 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.
Loyalty marketing
– Erica Fuzz 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Erica Fuzz can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Erica Fuzz 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Erica Fuzz is facing challenges because of the dominance of functional experts in the organization. Spreading Happiness: Warm Fuzz Cards 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.
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. Erica Fuzz can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Erica Fuzz 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Erica Fuzz 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. Erica Fuzz 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 Spreading Happiness: Warm Fuzz Cards External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Spreading Happiness: Warm Fuzz Cards are -
Stagnating economy with rate increase
– Erica Fuzz 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Erica Fuzz 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 Spreading Happiness: Warm Fuzz Cards .
Environmental challenges
– Erica Fuzz 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. Erica Fuzz can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Shortening product life cycle
– it is one of the major threat that Erica Fuzz is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Erica Fuzz 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Erica Fuzz 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.
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. Erica Fuzz needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Erica Fuzz has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Erica Fuzz 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Erica Fuzz with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Erica Fuzz 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.
Regulatory challenges
– Erica Fuzz 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 Innovation & Entrepreneurship industry regulations.
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 Erica Fuzz.
Weighted SWOT Analysis of Spreading Happiness: Warm Fuzz Cards 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 Spreading Happiness: Warm Fuzz Cards 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 Spreading Happiness: Warm Fuzz Cards 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 Spreading Happiness: Warm Fuzz Cards 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 Spreading Happiness: Warm Fuzz Cards 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 Erica Fuzz needs to make to build a sustainable competitive advantage.