Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 (B)
This is the second part of a case series dealing with the distribution of FMCG (Fast Moving Consumer Goods) to low income areas (slums) in Kenya. It describes the successful launch of KasKazi Network - a revolutionary concept of distribution by bicycle to the "bottom of the pyramid." It reveals how Wanjohi dealt with the key stakeholders (FMCG manufacturers, wholesalers, and retailers) as well as operational issues and HR policies. 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 (B)" written by Leif Sjoblom, Winifred Karugu, Lisa Schuepbach includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kaskazi Fmcg facing as an external strategic factors. Some of the topics covered in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 (B) casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B)
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 (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kaskazi Fmcg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kaskazi 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 (B) can be done for the following purposes –
1. Strategic planning using facts provided in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) case study
2. Improving business portfolio management of Kaskazi 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 Kaskazi Fmcg
Strengths Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kaskazi Fmcg in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Kaskazi Fmcg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kaskazi 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.
High brand equity
– Kaskazi Fmcg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kaskazi Fmcg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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.
Highly skilled collaborators
– Kaskazi Fmcg 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Kaskazi Fmcg in the sector have low bargaining power. Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kaskazi Fmcg to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Kaskazi 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 (B) 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.
Ability to lead change in Innovation & Entrepreneurship field
– Kaskazi Fmcg 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 Kaskazi Fmcg in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Kaskazi Fmcg
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kaskazi Fmcg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) firm has clearly differentiated products in the market place. This has enabled Kaskazi Fmcg to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Kaskazi Fmcg to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Kaskazi Fmcg is present in almost all the verticals within the industry. This has provided firm in Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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.
Effective Research and Development (R&D)
– Kaskazi 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 (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Kaskazi Fmcg is one of the leading recruiters in the industry. Managers in the Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) | 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 (B) are -
Skills based hiring
– The stress on hiring functional specialists at Kaskazi 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.
Low market penetration in new markets
– Outside its home market of Kaskazi Fmcg, firm in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 Kaskazi Fmcg 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Kaskazi Fmcg has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Kaskazi Fmcg even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B), is just above the industry average. Kaskazi 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.
Increasing silos among functional specialists
– The organizational structure of Kaskazi Fmcg is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Kaskazi Fmcg needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kaskazi Fmcg to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Kaskazi Fmcg needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though Kaskazi Fmcg 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 - Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 (B) can leverage the sales team experience to cultivate customer relationships as Kaskazi Fmcg is planning to shift buying processes online.
Lack of clear differentiation of Kaskazi Fmcg products
– To increase the profitability and margins on the products, Kaskazi Fmcg needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Kaskazi Fmcg 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.
Opportunities Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) | 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 (B) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kaskazi Fmcg can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Kaskazi Fmcg 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kaskazi Fmcg can use these opportunities to build new business models that can help the communities that Kaskazi Fmcg operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Kaskazi Fmcg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Kaskazi Fmcg has opened avenues for new revenue streams for the organization in the industry. This can help Kaskazi Fmcg to build a more holistic ecosystem as suggested in the Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) case study. Kaskazi Fmcg can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Kaskazi Fmcg 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. Kaskazi Fmcg 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.
Manufacturing automation
– Kaskazi 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kaskazi 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 (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kaskazi Fmcg is facing challenges because of the dominance of functional experts in the organization. Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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.
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 Kaskazi Fmcg in the consumer business. Now Kaskazi 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 Kaskazi 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kaskazi Fmcg 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.
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 Kaskazi Fmcg 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.
Threats Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 (B) are -
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. Kaskazi Fmcg 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kaskazi Fmcg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kaskazi 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 (B) .
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 Kaskazi Fmcg business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Kaskazi Fmcg is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kaskazi 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 wage structure of Kaskazi 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 Kaskazi Fmcg.
Stagnating economy with rate increase
– Kaskazi Fmcg 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.
Environmental challenges
– Kaskazi 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. Kaskazi Fmcg can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Kaskazi Fmcg in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 Kaskazi Fmcg.
Regulatory challenges
– Kaskazi 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kaskazi Fmcg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Kaskazi Network Ltd - Distributing to the Bottom of the Pyramid (B) 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 (B) 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 (B) 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 (B) 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 (B) 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 Kaskazi Fmcg needs to make to build a sustainable competitive advantage.
