Case Study Description of Supply Chain Management at Beautiful Bags
Joe Smith, senior director of merchandise management at Beautiful Bags (BB), was about to place a large order for the upcoming winter season. He had to decide how many pieces he should order of each product. But another big question whether BB should source the product from its domestic manufacturing facility, its Chinese suppliers, or some combination of the two given the timing needs, labor costs, minimum order requirements, and BB's expanding product assortment?
Authors :: Elliott Weiss, Tim Kraft, Rebecca Goldberg
Swot Analysis of "Supply Chain Management at Beautiful Bags" written by Elliott Weiss, Tim Kraft, Rebecca Goldberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bb Bags facing as an external strategic factors. Some of the topics covered in Supply Chain Management at Beautiful Bags case study are - Strategic Management Strategies, Sales, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Supply Chain Management at Beautiful Bags casestudy better are - – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, cloud computing is disrupting traditional business models,
technology disruption, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Supply Chain Management at Beautiful Bags
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Supply Chain Management at Beautiful Bags case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bb Bags, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bb Bags 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 Supply Chain Management at Beautiful Bags can be done for the following purposes –
1. Strategic planning using facts provided in Supply Chain Management at Beautiful Bags case study
2. Improving business portfolio management of Bb Bags
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 Bb Bags
Strengths Supply Chain Management at Beautiful Bags | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bb Bags in Supply Chain Management at Beautiful Bags Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Bb Bags are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Bb Bags
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bb Bags does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Bb Bags 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 Bb Bags is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Supply Chain Management at Beautiful Bags Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Bb Bags has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bb Bags to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– Supply Chain Management at Beautiful Bags firm has clearly differentiated products in the market place. This has enabled Bb Bags to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Bb Bags to invest into research and development (R&D) and innovation.
Analytics focus
– Bb Bags 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 Elliott Weiss, Tim Kraft, Rebecca Goldberg 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.
Ability to lead change in Leadership & Managing People field
– Bb Bags 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 Bb Bags in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Bb Bags is one of the leading recruiters in the industry. Managers in the Supply Chain Management at Beautiful Bags are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Bb Bags has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Supply Chain Management at Beautiful Bags 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.
Effective Research and Development (R&D)
– Bb Bags 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 Supply Chain Management at Beautiful Bags - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Bb Bags is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Bb Bags 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 Supply Chain Management at Beautiful Bags HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Supply Chain Management at Beautiful Bags | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Supply Chain Management at Beautiful Bags are -
Aligning sales with marketing
– It come across in the case study Supply Chain Management at Beautiful Bags 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 Supply Chain Management at Beautiful Bags can leverage the sales team experience to cultivate customer relationships as Bb Bags is planning to shift buying processes online.
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 Bb Bags supply chain. Even after few cautionary changes mentioned in the HBR case study - Supply Chain Management at Beautiful Bags, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bb Bags vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Supply Chain Management at Beautiful Bags HBR case study mentions - Bb Bags 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.
Increasing silos among functional specialists
– The organizational structure of Bb Bags is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Bb Bags needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bb Bags to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Bb Bags 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Supply Chain Management at Beautiful Bags, it seems that the employees of Bb Bags 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.
Need for greater diversity
– Bb Bags 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Elliott Weiss, Tim Kraft, Rebecca Goldberg suggests that, Bb Bags 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Supply Chain Management at Beautiful Bags, is just above the industry average. Bb Bags 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.
Lack of clear differentiation of Bb Bags products
– To increase the profitability and margins on the products, Bb Bags needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Bb Bags 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.
Opportunities Supply Chain Management at Beautiful Bags | 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 Supply Chain Management at Beautiful Bags are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bb Bags 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, Supply Chain Management at Beautiful Bags, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bb Bags can use these opportunities to build new business models that can help the communities that Bb Bags operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Bb Bags can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Better consumer reach
– The expansion of the 5G network will help Bb Bags to increase its market reach. Bb Bags 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.
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 Bb Bags in the consumer business. Now Bb Bags can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Bb Bags 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.
Learning at scale
– Online learning technologies has now opened space for Bb Bags 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bb Bags 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 Bb Bags to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Bb Bags 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.
Buying journey improvements
– Bb Bags can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Supply Chain Management at Beautiful Bags 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.
Building a culture of innovation
– managers at Bb Bags 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.
Creating value in data economy
– The success of analytics program of Bb Bags has opened avenues for new revenue streams for the organization in the industry. This can help Bb Bags to build a more holistic ecosystem as suggested in the Supply Chain Management at Beautiful Bags case study. Bb Bags can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Bb Bags can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Supply Chain Management at Beautiful Bags External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Supply Chain Management at Beautiful Bags are -
Increasing wage structure of Bb Bags
– 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 Bb Bags.
Consumer confidence and its impact on Bb Bags 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.
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. Bb Bags needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Bb Bags is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Supply Chain Management at Beautiful Bags, Bb Bags 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 .
Environmental challenges
– Bb Bags 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. Bb Bags can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Bb Bags has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Bb Bags 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bb Bags 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.
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. Bb Bags 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.
Stagnating economy with rate increase
– Bb Bags 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.
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 Bb Bags in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Bb Bags business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Supply Chain Management at Beautiful Bags 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 Supply Chain Management at Beautiful Bags 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 Supply Chain Management at Beautiful Bags 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 Supply Chain Management at Beautiful Bags 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 Supply Chain Management at Beautiful Bags 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 Bb Bags needs to make to build a sustainable competitive advantage.