Vendex KBB: First Hundred Days in Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Vendex KBB: First Hundred Days in Crisis
Vendex KBB is at crisis point at the end of 2004, especially its flagship V&D department stores. A consortium of private-equity investors led by KKR, who bought the business a year earlier, persuade retail veteran Tony DeNunzio to take on the challenge of turning the diversified holding company around. Reluctant at first, he agrees, but only for three years and thereafter for 18 months part time. His mandate is clear: to turn around the iconic Dutch business by adding value to all stakeholders, not just the PE firm, a mission made more difficult by the reputation PE firms have recently acquired as 'barbarians at the gate'. About to embark on his first 100 days, what should he do on his first day? Please visit the dedicated case website http://cases.insead.edu/vendexkbb-maxeda/ (copy and paste the url into a browser) to view video interviews and other support material.
Swot Analysis of "Vendex KBB: First Hundred Days in Crisis" written by Joost De Haas, Anne-Marie Carrick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kbb Vendex facing as an external strategic factors. Some of the topics covered in Vendex KBB: First Hundred Days in Crisis case study are - Strategic Management Strategies, Entrepreneurial finance, Leadership and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Vendex KBB: First Hundred Days in Crisis casestudy better are - – increasing energy prices, geopolitical disruptions, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Vendex KBB: First Hundred Days in Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vendex KBB: First Hundred Days in Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kbb Vendex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kbb Vendex 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 Vendex KBB: First Hundred Days in Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Vendex KBB: First Hundred Days in Crisis case study
2. Improving business portfolio management of Kbb Vendex
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 Kbb Vendex
Strengths Vendex KBB: First Hundred Days in Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kbb Vendex in Vendex KBB: First Hundred Days in Crisis Harvard Business Review case study are -
Learning organization
- Kbb Vendex 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 Kbb Vendex is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Vendex KBB: First Hundred Days in Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Kbb Vendex is present in almost all the verticals within the industry. This has provided firm in Vendex KBB: First Hundred Days in Crisis 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)
– Kbb Vendex 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 Vendex KBB: First Hundred Days in Crisis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Kbb Vendex digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kbb Vendex 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.
Highly skilled collaborators
– Kbb Vendex 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 Vendex KBB: First Hundred Days in Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Vendex KBB: First Hundred Days in Crisis firm has clearly differentiated products in the market place. This has enabled Kbb Vendex to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Kbb Vendex to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Kbb Vendex in the sector have low bargaining power. Vendex KBB: First Hundred Days in Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kbb Vendex to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Kbb Vendex has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Vendex KBB: First Hundred Days in Crisis 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.
Innovation driven organization
– Kbb Vendex is one of the most innovative firm in sector. Manager in Vendex KBB: First Hundred Days in Crisis 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
– Kbb Vendex is one of the leading recruiters in the industry. Managers in the Vendex KBB: First Hundred Days in Crisis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Kbb Vendex 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 Joost De Haas, Anne-Marie Carrick 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.
Organizational Resilience of Kbb Vendex
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kbb Vendex does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Vendex KBB: First Hundred Days in Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vendex KBB: First Hundred Days in Crisis are -
Low market penetration in new markets
– Outside its home market of Kbb Vendex, firm in the HBR case study Vendex KBB: First Hundred Days in Crisis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Kbb Vendex 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.
Need for greater diversity
– Kbb Vendex has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Vendex KBB: First Hundred Days in Crisis, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kbb Vendex is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Vendex KBB: First Hundred Days in Crisis 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 cash cycle compare to competitors
Kbb Vendex 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 bargaining power of channel partners
– Because of the regulatory requirements, Joost De Haas, Anne-Marie Carrick suggests that, Kbb Vendex 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 Vendex KBB: First Hundred Days in Crisis, in the dynamic environment Kbb Vendex has struggled to respond to the nimble upstart competition. Kbb Vendex has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Kbb Vendex is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Kbb Vendex needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kbb Vendex to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Vendex KBB: First Hundred Days in Crisis 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 Kbb Vendex has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Kbb Vendex supply chain. Even after few cautionary changes mentioned in the HBR case study - Vendex KBB: First Hundred Days in Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kbb Vendex vulnerable to further global disruptions in South East Asia.
Opportunities Vendex KBB: First Hundred Days in Crisis | 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 Vendex KBB: First Hundred Days in Crisis are -
Learning at scale
– Online learning technologies has now opened space for Kbb Vendex 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.
Developing new processes and practices
– Kbb Vendex 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. Kbb Vendex 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. Kbb Vendex 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kbb Vendex 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kbb Vendex 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.
Buying journey improvements
– Kbb Vendex can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Vendex KBB: First Hundred Days in Crisis 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kbb Vendex is facing challenges because of the dominance of functional experts in the organization. Vendex KBB: First Hundred Days in Crisis 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.
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 Kbb Vendex 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.
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. Kbb Vendex can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kbb Vendex 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 Kbb Vendex to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kbb Vendex can use these opportunities to build new business models that can help the communities that Kbb Vendex operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Building a culture of innovation
– managers at Kbb Vendex 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.
Creating value in data economy
– The success of analytics program of Kbb Vendex has opened avenues for new revenue streams for the organization in the industry. This can help Kbb Vendex to build a more holistic ecosystem as suggested in the Vendex KBB: First Hundred Days in Crisis case study. Kbb Vendex can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Vendex KBB: First Hundred Days in Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vendex KBB: First Hundred Days in Crisis are -
Consumer confidence and its impact on Kbb Vendex 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.
Technology acceleration in Forth Industrial Revolution
– Kbb Vendex has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Kbb Vendex 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.
Stagnating economy with rate increase
– Kbb Vendex 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.
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. Kbb Vendex 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kbb Vendex 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 Vendex KBB: First Hundred Days in Crisis .
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 Kbb Vendex.
Shortening product life cycle
– it is one of the major threat that Kbb Vendex 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 Kbb Vendex 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.
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.
Environmental challenges
– Kbb Vendex 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. Kbb Vendex can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Regulatory challenges
– Kbb Vendex 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.
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.
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. Kbb Vendex can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Vendex KBB: First Hundred Days in Crisis 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 Vendex KBB: First Hundred Days in Crisis 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 Vendex KBB: First Hundred Days in Crisis 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 Vendex KBB: First Hundred Days in Crisis 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 Vendex KBB: First Hundred Days in Crisis 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 Kbb Vendex needs to make to build a sustainable competitive advantage.