House of Tara: Building an African Beauty Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of House of Tara: Building an African Beauty Company
In early 2014, Tara Fela-Durotoye, the founder and CEO of House of Tara, was contemplating one of her greatest achievements to date. Her company had been named by L'OrA?al as a strategic distributor for Nigeria of leading international cosmetics brand Maybelline - marking another milestone in its ongoing success story. Lauded as a pioneer in the beauty and makeup industry in Nigeria, House of Tara was credited with launching the country's first makeup studio, establishing the first makeup school in West Africa, and creating a full makeup product line entirely dedicated to African women. From a small venture in the late 90s, the company had grown into a sophisticated organization with a broad array of products and services, a multi-channel distribution network, professional makeup schools, and high-touch customer service. With operations throughout the country, House of Tara was well placed to take advantage of the continued growth in cosmetics sales, fuelled by an emerging middle class with more disposable income. But despite the apparent opportunities, a number of distribution challenges remained. Unlike a typical beauty company operating through retail channels, House of Tara had a limited pool of beauty sales reps through which to reach the end customer. Since the mass-market segment accounted for the majority of cosmetics sales, how best could the products be made widely available? The case describes the evolution of House of Tara from a 'one woman show' initially offering bridal makeup services to a fully-fledged beauty business with a network of resellers and branded stores throughout the country. It gives an update on the latest developments that have seen House of Tara become the leading indigenous makeup brand in Nigeria, with a focus on how the local retail environment shaped its distribution strategy to reach its target markets.
Swot Analysis of "House of Tara: Building an African Beauty Company" written by Jesper Sorensen, Laurent De Clara includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tara Makeup facing as an external strategic factors. Some of the topics covered in House of Tara: Building an African Beauty Company case study are - Strategic Management Strategies, Emerging markets, Entrepreneurship, Marketing, Product development, Sales and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the House of Tara: Building an African Beauty Company casestudy better are - – increasing energy prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, technology disruption, geopolitical disruptions, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of House of Tara: Building an African Beauty Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in House of Tara: Building an African Beauty Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tara Makeup, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tara Makeup 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 House of Tara: Building an African Beauty Company can be done for the following purposes –
1. Strategic planning using facts provided in House of Tara: Building an African Beauty Company case study
2. Improving business portfolio management of Tara Makeup
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 Tara Makeup
Strengths House of Tara: Building an African Beauty Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tara Makeup in House of Tara: Building an African Beauty Company Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Tara Makeup digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tara Makeup 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.
Training and development
– Tara Makeup has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in House of Tara: Building an African Beauty Company 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.
High brand equity
– Tara Makeup has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tara Makeup to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Tara Makeup
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tara Makeup does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Tara Makeup is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Tara Makeup in the sector have low bargaining power. House of Tara: Building an African Beauty Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tara Makeup to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Tara Makeup 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 Tara Makeup is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in House of Tara: Building an African Beauty Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the House of Tara: Building an African Beauty Company 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.
Analytics focus
– Tara Makeup 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 Jesper Sorensen, Laurent De Clara 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.
Innovation driven organization
– Tara Makeup is one of the most innovative firm in sector. Manager in House of Tara: Building an African Beauty Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Tara Makeup is one of the leading recruiters in the industry. Managers in the House of Tara: Building an African Beauty Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Tara Makeup in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses House of Tara: Building an African Beauty Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of House of Tara: Building an African Beauty Company are -
Increasing silos among functional specialists
– The organizational structure of Tara Makeup is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Tara Makeup needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tara Makeup to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study House of Tara: Building an African Beauty Company, 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.
High cash cycle compare to competitors
Tara Makeup 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study House of Tara: Building an African Beauty Company, it seems that the employees of Tara Makeup 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tara Makeup is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study House of Tara: Building an African Beauty Company 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 bargaining power of channel partners
– Because of the regulatory requirements, Jesper Sorensen, Laurent De Clara suggests that, Tara Makeup 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.
Skills based hiring
– The stress on hiring functional specialists at Tara Makeup 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tara Makeup 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.
Need for greater diversity
– Tara Makeup 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study House of Tara: Building an African Beauty Company, in the dynamic environment Tara Makeup has struggled to respond to the nimble upstart competition. Tara Makeup has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study House of Tara: Building an African Beauty Company 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 Tara Makeup 's lucrative customers.
Opportunities House of Tara: Building an African Beauty Company | 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 House of Tara: Building an African Beauty Company are -
Using analytics as competitive advantage
– Tara Makeup 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 House of Tara: Building an African Beauty Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tara Makeup to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Tara Makeup in the consumer business. Now Tara Makeup can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Tara Makeup 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.
Manufacturing automation
– Tara Makeup 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.
Creating value in data economy
– The success of analytics program of Tara Makeup has opened avenues for new revenue streams for the organization in the industry. This can help Tara Makeup to build a more holistic ecosystem as suggested in the House of Tara: Building an African Beauty Company case study. Tara Makeup can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Tara Makeup 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.
Developing new processes and practices
– Tara Makeup 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. Tara Makeup 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. Tara Makeup 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.
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. Tara Makeup can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tara Makeup 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, Tara Makeup can use these opportunities to build new business models that can help the communities that Tara Makeup operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tara Makeup 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.
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 Tara Makeup 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 House of Tara: Building an African Beauty Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study House of Tara: Building an African Beauty Company are -
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 Tara Makeup.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study House of Tara: Building an African Beauty Company, Tara Makeup 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 .
High dependence on third party suppliers
– Tara Makeup 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.
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 Tara Makeup in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Tara Makeup is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High 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. Tara Makeup needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Environmental challenges
– Tara Makeup 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. Tara Makeup can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tara Makeup with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Tara Makeup business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Tara Makeup 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.
Technology acceleration in Forth Industrial Revolution
– Tara Makeup has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Tara Makeup 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.
Weighted SWOT Analysis of House of Tara: Building an African Beauty Company 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 House of Tara: Building an African Beauty Company 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 House of Tara: Building an African Beauty Company 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 House of Tara: Building an African Beauty Company 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 House of Tara: Building an African Beauty Company 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 Tara Makeup needs to make to build a sustainable competitive advantage.