Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A)
This three part case series deals with the distribution of FMCG (Fast Moving Consumer Goods) to low income areas (slums) in Kenya. In the (A) case, students are introduced to a young African entrepreneur, Mr. Ng'ang'a Wanjohi. Since graduating in 1998, Wanjohi has been involved in four start-ups - none of which has been successful. However, he has learned a lot along the way and is not deterred. He sees an enormous opportunity in the fragmented Kenyan micro retail market, consisting of 100,000 kiosks, primarily in low income areas. This market, which represents 75% of the Kenyan retail market, is "dingy, dirty, smelly and dangerous" and neglected by many FMCG companies. Students are asked to analyze and refine a business plan for product distribution in this market by Bicycle Sales Representatives (BSRs). Learning objectives: The case series would be suitable for a core marketing course (dealing with the market challenge, and distribution and retail issues in Africa), a course on supply chain (distribution issues in Africa), an entrepreneurship course (dealing with business growth strategies) or a general management course. In all these courses, the case series can be used to illustrate the challenge and complexity of reaching low income customers in developing countries.
Authors :: Leif Sjoblom, Winifred Karugu, Lisa Schuepbach
Swot Analysis of "Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A)" written by Leif Sjoblom, Winifred Karugu, Lisa Schuepbach includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wanjohi Fmcg facing as an external strategic factors. Some of the topics covered in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) case study are - Strategic Management Strategies, Marketing, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) casestudy better are - – increasing government debt because of Covid-19 spendings, there is backlash against globalization, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, technology disruption,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wanjohi Fmcg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wanjohi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) can be done for the following purposes –
1. Strategic planning using facts provided in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) case study
2. Improving business portfolio management of Wanjohi Fmcg
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 Wanjohi Fmcg
Strengths Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wanjohi Fmcg in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Wanjohi Fmcg in the sector have low bargaining power. Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wanjohi Fmcg to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Wanjohi Fmcg is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Wanjohi Fmcg 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.
High brand equity
– Wanjohi Fmcg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wanjohi Fmcg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Wanjohi Fmcg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wanjohi Fmcg 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.
Organizational Resilience of Wanjohi Fmcg
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wanjohi Fmcg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Wanjohi Fmcg has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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.
Superior customer experience
– The customer experience strategy of Wanjohi Fmcg in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Wanjohi Fmcg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wanjohi Fmcg 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
– Wanjohi Fmcg is one of the leading recruiters in the industry. Managers in the Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Wanjohi Fmcg is one of the most innovative firm in sector. Manager in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Wanjohi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A), is just above the industry average. Wanjohi Fmcg 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, Wanjohi Fmcg 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.
Aligning sales with marketing
– It come across in the case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) can leverage the sales team experience to cultivate customer relationships as Wanjohi Fmcg is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A), it seems that the employees of Wanjohi Fmcg 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.
High cash cycle compare to competitors
Wanjohi Fmcg has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Wanjohi Fmcg, firm in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Leif Sjoblom, Winifred Karugu, Lisa Schuepbach suggests that, Wanjohi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A), in the dynamic environment Wanjohi Fmcg has struggled to respond to the nimble upstart competition. Wanjohi Fmcg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Wanjohi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Wanjohi Fmcg has relatively successful track record of launching new products.
Need for greater diversity
– Wanjohi Fmcg 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.
Opportunities Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) | 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) are -
Better consumer reach
– The expansion of the 5G network will help Wanjohi Fmcg to increase its market reach. Wanjohi Fmcg 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.
Creating value in data economy
– The success of analytics program of Wanjohi Fmcg has opened avenues for new revenue streams for the organization in the industry. This can help Wanjohi Fmcg to build a more holistic ecosystem as suggested in the Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) case study. Wanjohi Fmcg can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Wanjohi Fmcg 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.
Leveraging digital technologies
– Wanjohi Fmcg 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.
Building a culture of innovation
– managers at Wanjohi Fmcg 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 Innovation & Entrepreneurship segment.
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 Wanjohi Fmcg in the consumer business. Now Wanjohi Fmcg can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wanjohi Fmcg 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.
Developing new processes and practices
– Wanjohi Fmcg 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wanjohi Fmcg to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Wanjohi Fmcg to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wanjohi Fmcg is facing challenges because of the dominance of functional experts in the organization. Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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. Wanjohi Fmcg can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wanjohi Fmcg 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, Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Wanjohi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wanjohi Fmcg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) are -
High dependence on third party suppliers
– Wanjohi Fmcg 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.
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. Wanjohi Fmcg needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Wanjohi Fmcg business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Wanjohi Fmcg has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Wanjohi Fmcg 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 Wanjohi Fmcg 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wanjohi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A), Wanjohi Fmcg 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 .
Environmental challenges
– Wanjohi Fmcg 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. Wanjohi Fmcg can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
Increasing wage structure of Wanjohi Fmcg
– 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 Wanjohi Fmcg.
Regulatory challenges
– Wanjohi Fmcg 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.
Consumer confidence and its impact on Wanjohi Fmcg 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.
Shortening product life cycle
– it is one of the major threat that Wanjohi Fmcg is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (A) 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 Wanjohi Fmcg needs to make to build a sustainable competitive advantage.
