Case Study Description of SEWA Trade Facilitation Center: Changing the Spool
The case is about the decision to convert a not-for-profit organization into a for-profit company. STFC, which is part of a larger non-profit organization - the Self-Employed Women's Association (SEWA) - works to improve the livelihoods of very poor rural and urban women in India. It does so by translating traditional Indian embroidery skills into contemporary apparel and home furnishings that STFC then helps to market and sell around the world. Organized as a producers' cooperative, STFC is owned by its artisan-members. STFC is thinking of changing to for-profit status because it would enable faster and more sustainable growth by providing access to outside funds, and also allow the payment of dividends, which would further improve the women's livelihoods. The legal and financial implications of such a move aside, it is not clear that STFC would be able to withstand the changes such a transformation would entail. Most importantly, would an organization accustomed to taking decisions based solely on social benefit criteria be able to adjust to a for-profit mentality? And, would customers accept the change?
Swot Analysis of "SEWA Trade Facilitation Center: Changing the Spool" written by Mukti Khaire, Kathleen L. McGinn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stfc Sewa facing as an external strategic factors. Some of the topics covered in SEWA Trade Facilitation Center: Changing the Spool case study are - Strategic Management Strategies, Change management, Economy, Gender, Growth strategy, Innovation, Social enterprise, Strategy execution and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the SEWA Trade Facilitation Center: Changing the Spool casestudy better are - – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of SEWA Trade Facilitation Center: Changing the Spool
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SEWA Trade Facilitation Center: Changing the Spool case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stfc Sewa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stfc Sewa 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 SEWA Trade Facilitation Center: Changing the Spool can be done for the following purposes –
1. Strategic planning using facts provided in SEWA Trade Facilitation Center: Changing the Spool case study
2. Improving business portfolio management of Stfc Sewa
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 Stfc Sewa
Strengths SEWA Trade Facilitation Center: Changing the Spool | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stfc Sewa in SEWA Trade Facilitation Center: Changing the Spool Harvard Business Review case study are -
Innovation driven organization
– Stfc Sewa is one of the most innovative firm in sector. Manager in SEWA Trade Facilitation Center: Changing the Spool Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Stfc Sewa 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 Stfc Sewa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SEWA Trade Facilitation Center: Changing the Spool Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Stfc Sewa is present in almost all the verticals within the industry. This has provided firm in SEWA Trade Facilitation Center: Changing the Spool 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.
Ability to lead change in Innovation & Entrepreneurship field
– Stfc Sewa 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 Stfc Sewa in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Stfc Sewa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Stfc Sewa digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stfc Sewa 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.
Effective Research and Development (R&D)
– Stfc Sewa 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 SEWA Trade Facilitation Center: Changing the Spool - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– SEWA Trade Facilitation Center: Changing the Spool firm has clearly differentiated products in the market place. This has enabled Stfc Sewa to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Stfc Sewa to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Stfc Sewa 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
– Stfc Sewa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stfc Sewa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Stfc Sewa
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stfc Sewa does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Stfc Sewa is one of the leading recruiters in the industry. Managers in the SEWA Trade Facilitation Center: Changing the Spool 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 SEWA Trade Facilitation Center: Changing the Spool | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SEWA Trade Facilitation Center: Changing the Spool are -
Slow decision making process
– As mentioned earlier in the report, Stfc Sewa 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. Stfc Sewa 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 SEWA Trade Facilitation Center: Changing the Spool, is just above the industry average. Stfc Sewa 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.
Capital Spending Reduction
– Even during the low interest decade, Stfc Sewa 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Stfc Sewa 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SEWA Trade Facilitation Center: Changing the Spool, in the dynamic environment Stfc Sewa has struggled to respond to the nimble upstart competition. Stfc Sewa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Mukti Khaire, Kathleen L. McGinn suggests that, Stfc Sewa 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.
High cash cycle compare to competitors
Stfc Sewa 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.
High operating costs
– Compare to the competitors, firm in the HBR case study SEWA Trade Facilitation Center: Changing the Spool 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 Stfc Sewa 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the SEWA Trade Facilitation Center: Changing the Spool 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 Stfc Sewa has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Stfc Sewa, firm in the HBR case study SEWA Trade Facilitation Center: Changing the Spool needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study SEWA Trade Facilitation Center: Changing the Spool, 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.
Opportunities SEWA Trade Facilitation Center: Changing the Spool | 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 SEWA Trade Facilitation Center: Changing the Spool are -
Using analytics as competitive advantage
– Stfc Sewa 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 SEWA Trade Facilitation Center: Changing the Spool - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stfc Sewa to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Stfc Sewa to increase its market reach. Stfc Sewa 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stfc Sewa can use these opportunities to build new business models that can help the communities that Stfc Sewa operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stfc Sewa 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, SEWA Trade Facilitation Center: Changing the Spool, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Stfc Sewa has opened avenues for new revenue streams for the organization in the industry. This can help Stfc Sewa to build a more holistic ecosystem as suggested in the SEWA Trade Facilitation Center: Changing the Spool case study. Stfc Sewa can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Stfc Sewa 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.
Building a culture of innovation
– managers at Stfc Sewa 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.
Buying journey improvements
– Stfc Sewa can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SEWA Trade Facilitation Center: Changing the Spool 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stfc Sewa 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 Stfc Sewa 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.
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. Stfc Sewa can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Stfc Sewa 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stfc Sewa 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 Stfc Sewa to hire the very best people irrespective of their geographical location.
Threats SEWA Trade Facilitation Center: Changing the Spool External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SEWA Trade Facilitation Center: Changing the Spool are -
Consumer confidence and its impact on Stfc Sewa 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.
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 Stfc Sewa.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SEWA Trade Facilitation Center: Changing the Spool, Stfc Sewa 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 .
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. Stfc Sewa can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Stfc Sewa
– 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 Stfc Sewa.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Stfc Sewa 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 dependence on third party suppliers
– Stfc Sewa 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Stfc Sewa 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 SEWA Trade Facilitation Center: Changing the Spool .
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.
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. Stfc Sewa 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Stfc Sewa with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Stfc Sewa 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.
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 Stfc Sewa business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of SEWA Trade Facilitation Center: Changing the Spool 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 SEWA Trade Facilitation Center: Changing the Spool 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 SEWA Trade Facilitation Center: Changing the Spool 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 SEWA Trade Facilitation Center: Changing the Spool 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 SEWA Trade Facilitation Center: Changing the Spool 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 Stfc Sewa needs to make to build a sustainable competitive advantage.
