15FEN: Finding the Blue Ocean in China's Fresh Food SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of 15FEN: Finding the Blue Ocean in China's Fresh Food
15fen (15a??) was the name Henry He (e??e??e??) gave his first business venture - a neighborhood store (c??a??a??) in Guangdong province, China, which promised home delivery of a grocer order within 15 minutes. His inaugural slogan was, "Staple Food & Seasoning, Everything At Your Doorstep in 15 Minutes". A first time entrepreneur, he was imbued with optimism towards internet retailing, and convinced that home delivery within 15 minutes was an unbeatable proposition. In no time, he learned the realities of the grocery business - low margin and hard labor - carrying bags of rice and tins of cooking oil from door to door. Back in 2012, China's internet retailing was dominated by Consumer Electronics, Apparel and Footwear and Consumer Appliances. Fresh Food was tipped to be the next big driver for e-commerce. Headlines such as "Fresh Food e-commerce will be the next blue ocean" were commonplace in the media, and they captured the imagination of aspiring entrepreneurs like Henry He. He was determined to ride this e-retailing wave to create his blue ocean in Fresh Food. But first, he must learn how to swim.
Swot Analysis of "15FEN: Finding the Blue Ocean in China's Fresh Food" written by Kevin Zhou, Josephine Lau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fresh 15fen facing as an external strategic factors. Some of the topics covered in 15FEN: Finding the Blue Ocean in China's Fresh Food case study are - Strategic Management Strategies, Marketing, Operations management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the 15FEN: Finding the Blue Ocean in China's Fresh Food casestudy better are - – supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of 15FEN: Finding the Blue Ocean in China's Fresh Food
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 15FEN: Finding the Blue Ocean in China's Fresh Food case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fresh 15fen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fresh 15fen 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 15FEN: Finding the Blue Ocean in China's Fresh Food can be done for the following purposes –
1. Strategic planning using facts provided in 15FEN: Finding the Blue Ocean in China's Fresh Food case study
2. Improving business portfolio management of Fresh 15fen
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 Fresh 15fen
Strengths 15FEN: Finding the Blue Ocean in China's Fresh Food | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fresh 15fen in 15FEN: Finding the Blue Ocean in China's Fresh Food Harvard Business Review case study are -
Analytics focus
– Fresh 15fen 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 Kevin Zhou, Josephine Lau 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.
Highly skilled collaborators
– Fresh 15fen 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 15FEN: Finding the Blue Ocean in China's Fresh Food HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Fresh 15fen is one of the leading recruiters in the industry. Managers in the 15FEN: Finding the Blue Ocean in China's Fresh Food are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– 15FEN: Finding the Blue Ocean in China's Fresh Food firm has clearly differentiated products in the market place. This has enabled Fresh 15fen to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Fresh 15fen to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Fresh 15fen 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.
Superior customer experience
– The customer experience strategy of Fresh 15fen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Fresh 15fen 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 15FEN: Finding the Blue Ocean in China's Fresh Food - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Fresh 15fen 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 Fresh 15fen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Fresh 15fen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Fresh 15fen is present in almost all the verticals within the industry. This has provided firm in 15FEN: Finding the Blue Ocean in China's Fresh Food 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.
Innovation driven organization
– Fresh 15fen is one of the most innovative firm in sector. Manager in 15FEN: Finding the Blue Ocean in China's Fresh Food Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Fresh 15fen in the sector have low bargaining power. 15FEN: Finding the Blue Ocean in China's Fresh Food has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fresh 15fen to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses 15FEN: Finding the Blue Ocean in China's Fresh Food | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 15FEN: Finding the Blue Ocean in China's Fresh Food are -
Slow decision making process
– As mentioned earlier in the report, Fresh 15fen 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. Fresh 15fen even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 15FEN: Finding the Blue Ocean in China's Fresh Food, is just above the industry average. Fresh 15fen 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.
High operating costs
– Compare to the competitors, firm in the HBR case study 15FEN: Finding the Blue Ocean in China's Fresh Food 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 Fresh 15fen 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 15FEN: Finding the Blue Ocean in China's Fresh Food 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 Fresh 15fen has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Fresh 15fen is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Fresh 15fen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fresh 15fen to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Fresh 15fen has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Fresh 15fen needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 Fresh 15fen supply chain. Even after few cautionary changes mentioned in the HBR case study - 15FEN: Finding the Blue Ocean in China's Fresh Food, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fresh 15fen vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Kevin Zhou, Josephine Lau suggests that, Fresh 15fen is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Fresh 15fen 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.
Lack of clear differentiation of Fresh 15fen products
– To increase the profitability and margins on the products, Fresh 15fen needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities 15FEN: Finding the Blue Ocean in China's Fresh Food | 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 15FEN: Finding the Blue Ocean in China's Fresh Food are -
Buying journey improvements
– Fresh 15fen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 15FEN: Finding the Blue Ocean in China's Fresh Food suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fresh 15fen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Fresh 15fen 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 15FEN: Finding the Blue Ocean in China's Fresh Food - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fresh 15fen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fresh 15fen 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.
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. Fresh 15fen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fresh 15fen 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.
Manufacturing automation
– Fresh 15fen 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.
Building a culture of innovation
– managers at Fresh 15fen 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.
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 Fresh 15fen in the consumer business. Now Fresh 15fen can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fresh 15fen 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. Fresh 15fen 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.
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 Fresh 15fen 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fresh 15fen can use these opportunities to build new business models that can help the communities that Fresh 15fen operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Fresh 15fen has opened avenues for new revenue streams for the organization in the industry. This can help Fresh 15fen to build a more holistic ecosystem as suggested in the 15FEN: Finding the Blue Ocean in China's Fresh Food case study. Fresh 15fen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats 15FEN: Finding the Blue Ocean in China's Fresh Food External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 15FEN: Finding the Blue Ocean in China's Fresh Food are -
Regulatory challenges
– Fresh 15fen 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. Fresh 15fen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Fresh 15fen has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Fresh 15fen 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study 15FEN: Finding the Blue Ocean in China's Fresh Food, Fresh 15fen 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 .
Shortening product life cycle
– it is one of the major threat that Fresh 15fen is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Fresh 15fen
– 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 Fresh 15fen.
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
– Fresh 15fen 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fresh 15fen 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 15FEN: Finding the Blue Ocean in China's Fresh Food .
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 Fresh 15fen business can come under increasing regulations regarding data privacy, data security, etc.
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. Fresh 15fen needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fresh 15fen 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.
Weighted SWOT Analysis of 15FEN: Finding the Blue Ocean in China's Fresh Food 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 15FEN: Finding the Blue Ocean in China's Fresh Food 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 15FEN: Finding the Blue Ocean in China's Fresh Food 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 15FEN: Finding the Blue Ocean in China's Fresh Food 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 15FEN: Finding the Blue Ocean in China's Fresh Food 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 Fresh 15fen needs to make to build a sustainable competitive advantage.
