Performance Management at Vitality Health Enterprises, Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Performance Management at Vitality Health Enterprises, Inc.
Vitality Health Enterprises, a medium-sized firm that manufactures health and personal care products, has experienced six straight quarters of strong revenue growth. James Hoffman, the new Senior Vice President of Human Resources, fears that the chain of success is shifting the company's focus away from effective performance management. Recently, Vitality has been faced with increasing turnover among the company's talented research scientists that may be due to a performance management system that leaves top performing employees slighted by the practice of uniform ratings. In an effort to retain top employees, the company institutes a forced distribution model of performance rankings, moving from an absolute ranking system to a relative one. Hoffman and his performance management evaluation team must assess the practical and strategic effectiveness of the new system and present their findings and recommendations to the Board.
Swot Analysis of "Performance Management at Vitality Health Enterprises, Inc." written by John B. Bingham, Michael Beer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vitality Hoffman facing as an external strategic factors. Some of the topics covered in Performance Management at Vitality Health Enterprises, Inc. case study are - Strategic Management Strategies, Branding, Collaboration, Executive compensation, Financial analysis, Health, Manufacturing, Motivating people, Performance measurement, Personnel policies, Product development, Social responsibility, Talent management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Performance Management at Vitality Health Enterprises, Inc. casestudy better are - – technology disruption, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Performance Management at Vitality Health Enterprises, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Performance Management at Vitality Health Enterprises, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vitality Hoffman, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vitality Hoffman 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 Performance Management at Vitality Health Enterprises, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Performance Management at Vitality Health Enterprises, Inc. case study
2. Improving business portfolio management of Vitality Hoffman
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vitality Hoffman
Strengths Performance Management at Vitality Health Enterprises, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vitality Hoffman in Performance Management at Vitality Health Enterprises, Inc. Harvard Business Review case study are -
Successful track record of launching new products
– Vitality Hoffman has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vitality Hoffman has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Leadership & Managing People industry
– Performance Management at Vitality Health Enterprises, Inc. firm has clearly differentiated products in the market place. This has enabled Vitality Hoffman to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Vitality Hoffman to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Performance Management at Vitality Health Enterprises, Inc. 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.
Training and development
– Vitality Hoffman has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Performance Management at Vitality Health Enterprises, Inc. 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.
Diverse revenue streams
– Vitality Hoffman is present in almost all the verticals within the industry. This has provided firm in Performance Management at Vitality Health Enterprises, Inc. 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.
High switching costs
– The high switching costs that Vitality Hoffman 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.
Analytics focus
– Vitality Hoffman 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 John B. Bingham, Michael Beer 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.
Effective Research and Development (R&D)
– Vitality Hoffman 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 Performance Management at Vitality Health Enterprises, Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Vitality Hoffman in the sector have low bargaining power. Performance Management at Vitality Health Enterprises, Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vitality Hoffman to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Vitality Hoffman has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vitality Hoffman to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Vitality Hoffman 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 Vitality Hoffman is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Performance Management at Vitality Health Enterprises, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Vitality Hoffman is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Performance Management at Vitality Health Enterprises, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Performance Management at Vitality Health Enterprises, Inc. are -
Aligning sales with marketing
– It come across in the case study Performance Management at Vitality Health Enterprises, Inc. 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 Performance Management at Vitality Health Enterprises, Inc. can leverage the sales team experience to cultivate customer relationships as Vitality Hoffman is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vitality Hoffman is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Performance Management at Vitality Health Enterprises, Inc. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Vitality Hoffman 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 - Performance Management at Vitality Health Enterprises, Inc. should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Vitality Hoffman, firm in the HBR case study Performance Management at Vitality Health Enterprises, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Performance Management at Vitality Health Enterprises, Inc. 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 Vitality Hoffman has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Vitality Hoffman has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Vitality Hoffman 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.
Lack of clear differentiation of Vitality Hoffman products
– To increase the profitability and margins on the products, Vitality Hoffman needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Performance Management at Vitality Health Enterprises, Inc., is just above the industry average. Vitality Hoffman 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, Vitality Hoffman 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.
Slow to strategic competitive environment developments
– As Performance Management at Vitality Health Enterprises, Inc. HBR case study mentions - Vitality Hoffman takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Performance Management at Vitality Health Enterprises, Inc. | 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 Performance Management at Vitality Health Enterprises, Inc. are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vitality Hoffman 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 Vitality Hoffman to hire the very best people irrespective of their geographical location.
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 Vitality Hoffman 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.
Loyalty marketing
– Vitality Hoffman 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.
Leveraging digital technologies
– Vitality Hoffman 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.
Using analytics as competitive advantage
– Vitality Hoffman 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 Performance Management at Vitality Health Enterprises, Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vitality Hoffman to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Vitality Hoffman can develop new processes and procedures in Leadership & Managing People 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vitality Hoffman 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, Performance Management at Vitality Health Enterprises, Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Vitality Hoffman to increase its market reach. Vitality Hoffman 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Vitality Hoffman can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vitality Hoffman is facing challenges because of the dominance of functional experts in the organization. Performance Management at Vitality Health Enterprises, Inc. 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.
Building a culture of innovation
– managers at Vitality Hoffman 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 Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vitality Hoffman 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.
Buying journey improvements
– Vitality Hoffman can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Performance Management at Vitality Health Enterprises, Inc. 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.
Threats Performance Management at Vitality Health Enterprises, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Performance Management at Vitality Health Enterprises, Inc. are -
High dependence on third party suppliers
– Vitality Hoffman 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Performance Management at Vitality Health Enterprises, Inc., Vitality Hoffman may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vitality Hoffman 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 Performance Management at Vitality Health Enterprises, Inc. .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vitality Hoffman in the Leadership & Managing People industry. The Leadership & Managing People 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.
Stagnating economy with rate increase
– Vitality Hoffman 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.
Consumer confidence and its impact on Vitality Hoffman 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.
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 Vitality Hoffman in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Vitality Hoffman has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Vitality Hoffman needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vitality Hoffman with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vitality Hoffman can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Vitality Hoffman needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Performance Management at Vitality Health Enterprises, Inc. 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 Performance Management at Vitality Health Enterprises, Inc. 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 Performance Management at Vitality Health Enterprises, Inc. 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 Performance Management at Vitality Health Enterprises, Inc. 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 Performance Management at Vitality Health Enterprises, Inc. 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 Vitality Hoffman needs to make to build a sustainable competitive advantage.
