Case Study Description of Envirofit International: Cracking the BoP Market
In 2007, Envirofit International, a 501(c) (3) non-profit enterprise from Ft Collins, Colorado, USA, teamed up with the Shell Foundation to reduce indoor air pollution (IAP) in India by selling low-cost high-performance cookstoves designed to reduce carbon emissions by at least 50 percent. IAP was recognized as a silent killer in developing countries like India and a major environmental hazard in developing countries and around the world. The simple solution to this worldwide problem was a low or zero emissions cookstove. This case describes how Envirofit developed and marketed a high performance cookstove to the base of the pyramid (BoP) households in India earning $2-$7 a day and the challenges it encountered in the process. In spite of high investments in social marketing campaigns, Envirofit's push strategy did not result in strong sales growth in the BoP market segment in India. Harish Anchan, Envirofit India's country manager, and Tim Bauer, VP Operations at Envirofit, faced the daunting task of growing sales profitably in order to make the Indian venture financially sustainable. Students have the opportunity to analyze Envirofit India's market and financial performance and suggest alternatives to improve sales based on a sound understanding of consumer behavior in the Indian BoP market.
Swot Analysis of "Envirofit International: Cracking the BoP Market" written by Vijaya Narapareddy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Envirofit Bop facing as an external strategic factors. Some of the topics covered in Envirofit International: Cracking the BoP Market case study are - Strategic Management Strategies, Growth strategy, Marketing, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Envirofit International: Cracking the BoP Market casestudy better are - – technology disruption, cloud computing is disrupting traditional business models, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Envirofit International: Cracking the BoP Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Envirofit International: Cracking the BoP Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Envirofit Bop, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Envirofit Bop 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 Envirofit International: Cracking the BoP Market can be done for the following purposes –
1. Strategic planning using facts provided in Envirofit International: Cracking the BoP Market case study
2. Improving business portfolio management of Envirofit Bop
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 Envirofit Bop
Strengths Envirofit International: Cracking the BoP Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Envirofit Bop in Envirofit International: Cracking the BoP Market Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Envirofit Bop 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.
Low bargaining power of suppliers
– Suppliers of Envirofit Bop in the sector have low bargaining power. Envirofit International: Cracking the BoP Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Envirofit Bop to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Envirofit Bop has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Envirofit Bop 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Envirofit Bop digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Envirofit Bop 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)
– Envirofit Bop 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 Envirofit International: Cracking the BoP Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Envirofit Bop 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 Envirofit Bop is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Envirofit International: Cracking the BoP Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Envirofit Bop 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 Envirofit Bop in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Leadership & Managing People industry
– Envirofit International: Cracking the BoP Market firm has clearly differentiated products in the market place. This has enabled Envirofit Bop to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Envirofit Bop to invest into research and development (R&D) and innovation.
Innovation driven organization
– Envirofit Bop is one of the most innovative firm in sector. Manager in Envirofit International: Cracking the BoP Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Envirofit Bop has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Envirofit Bop to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Envirofit International: Cracking the BoP Market Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Envirofit Bop 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 Vijaya Narapareddy 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.
Weaknesses Envirofit International: Cracking the BoP Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Envirofit International: Cracking the BoP Market are -
Slow decision making process
– As mentioned earlier in the report, Envirofit Bop 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. Envirofit Bop 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Envirofit International: Cracking the BoP Market, it seems that the employees of Envirofit Bop 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.
Aligning sales with marketing
– It come across in the case study Envirofit International: Cracking the BoP Market 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 Envirofit International: Cracking the BoP Market can leverage the sales team experience to cultivate customer relationships as Envirofit Bop 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 Envirofit Bop supply chain. Even after few cautionary changes mentioned in the HBR case study - Envirofit International: Cracking the BoP Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Envirofit Bop vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Envirofit International: Cracking the BoP Market HBR case study mentions - Envirofit Bop 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.
Skills based hiring
– The stress on hiring functional specialists at Envirofit Bop 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Vijaya Narapareddy suggests that, Envirofit Bop 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 operating costs
– Compare to the competitors, firm in the HBR case study Envirofit International: Cracking the BoP Market 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 Envirofit Bop 's lucrative customers.
Need for greater diversity
– Envirofit Bop 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.
Increasing silos among functional specialists
– The organizational structure of Envirofit Bop is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Envirofit Bop needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Envirofit Bop to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Envirofit International: Cracking the BoP Market, in the dynamic environment Envirofit Bop has struggled to respond to the nimble upstart competition. Envirofit Bop has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Envirofit International: Cracking the BoP Market | 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 Envirofit International: Cracking the BoP Market are -
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 Envirofit Bop in the consumer business. Now Envirofit Bop can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Envirofit Bop can use these opportunities to build new business models that can help the communities that Envirofit Bop operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Envirofit Bop can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Envirofit Bop has opened avenues for new revenue streams for the organization in the industry. This can help Envirofit Bop to build a more holistic ecosystem as suggested in the Envirofit International: Cracking the BoP Market case study. Envirofit Bop can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Envirofit Bop 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 Envirofit International: Cracking the BoP Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Envirofit Bop 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 Envirofit Bop to increase its market reach. Envirofit Bop 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Envirofit Bop in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Envirofit Bop 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Envirofit Bop can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Envirofit Bop 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Envirofit Bop is facing challenges because of the dominance of functional experts in the organization. Envirofit International: Cracking the BoP Market 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.
Buying journey improvements
– Envirofit Bop can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Envirofit International: Cracking the BoP Market 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Envirofit Bop 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, Envirofit International: Cracking the BoP Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Envirofit International: Cracking the BoP Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Envirofit International: Cracking the BoP Market are -
Environmental challenges
– Envirofit Bop 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. Envirofit Bop can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Envirofit Bop needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Envirofit Bop 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.
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 Envirofit Bop in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Envirofit Bop 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 Leadership & Managing People industry regulations.
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. Envirofit Bop can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Envirofit Bop business can come under increasing regulations regarding data privacy, data security, etc.
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 Envirofit Bop.
Technology acceleration in Forth Industrial Revolution
– Envirofit Bop has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Envirofit Bop 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.
High dependence on third party suppliers
– Envirofit Bop 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, Envirofit Bop 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 Envirofit International: Cracking the BoP Market .
Weighted SWOT Analysis of Envirofit International: Cracking the BoP Market 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 Envirofit International: Cracking the BoP Market 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 Envirofit International: Cracking the BoP Market 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 Envirofit International: Cracking the BoP Market 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 Envirofit International: Cracking the BoP Market 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 Envirofit Bop needs to make to build a sustainable competitive advantage.
