Case Study Description of Joe Fresh: Ethical Sourcing
After more than 1,100 people lost their lives in the 2013 collapse of the Rana Plaza garment factory building in Bangladesh, executives of Joe Fresh, a Canadian fashion and lifestyle brand, had to respond. Along with numerous other Western retailers, Joe Fresh had sourced much of its merchandise from the Rana Plaza factory. The disaster invoked an emotional public reaction, ranging from sympathy to outrage. The clothing industry had become a critical part of Bangladesh's economy, and this was not an isolated incident. How would the Rana Plaza incident affect the public perception of Joe Fresh, and what could the company do to improve that perception? More fundamentally, how could Joe Fresh balance its competitive position, obligations to shareholders, and customer demands with ethical sourcing? Jaana Woiceshyn is affiliated with Haskayne School of Business. Norman Althouse is affiliated with Haskayne School of Business.
Tags :: International business, Manufacturing, Personnel policies, Public relations, Strategy, Workspaces, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Joe Fresh: Ethical Sourcing" written by Jaana Woiceshyn, Norm Althouse, Nigel Goodwin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Joe Fresh facing as an external strategic factors. Some of the topics covered in Joe Fresh: Ethical Sourcing case study are - Strategic Management Strategies, International business, Manufacturing, Personnel policies, Public relations, Strategy, Workspaces and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Joe Fresh: Ethical Sourcing casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption, supply chains are disrupted by pandemic , increasing energy prices,
cloud computing is disrupting traditional business models, there is backlash against globalization, etc
Introduction to SWOT Analysis of Joe Fresh: Ethical Sourcing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Joe Fresh: Ethical Sourcing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Joe Fresh, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Joe Fresh 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 Joe Fresh: Ethical Sourcing can be done for the following purposes –
1. Strategic planning using facts provided in Joe Fresh: Ethical Sourcing case study
2. Improving business portfolio management of Joe Fresh
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 Joe Fresh
Strengths Joe Fresh: Ethical Sourcing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Joe Fresh in Joe Fresh: Ethical Sourcing Harvard Business Review case study are -
Analytics focus
– Joe Fresh 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 Jaana Woiceshyn, Norm Althouse, Nigel Goodwin 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)
– Joe Fresh 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 Joe Fresh: Ethical Sourcing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Joe Fresh has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Joe Fresh 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 Joe Fresh digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Joe Fresh 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.
Innovation driven organization
– Joe Fresh is one of the most innovative firm in sector. Manager in Joe Fresh: Ethical Sourcing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Joe Fresh has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Joe Fresh: Ethical Sourcing 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.
High brand equity
– Joe Fresh has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Joe Fresh to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Joe Fresh in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Joe Fresh: Ethical Sourcing 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.
Highly skilled collaborators
– Joe Fresh 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 Joe Fresh: Ethical Sourcing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Joe Fresh is present in almost all the verticals within the industry. This has provided firm in Joe Fresh: Ethical Sourcing 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.
Learning organization
- Joe Fresh 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 Joe Fresh is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Joe Fresh: Ethical Sourcing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Joe Fresh: Ethical Sourcing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Joe Fresh: Ethical Sourcing are -
Lack of clear differentiation of Joe Fresh products
– To increase the profitability and margins on the products, Joe Fresh needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Joe Fresh is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Joe Fresh needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Joe Fresh to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Joe Fresh: Ethical Sourcing 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 Joe Fresh has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Joe Fresh 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. Joe Fresh 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.
Aligning sales with marketing
– It come across in the case study Joe Fresh: Ethical Sourcing 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 Joe Fresh: Ethical Sourcing can leverage the sales team experience to cultivate customer relationships as Joe Fresh is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Joe Fresh 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.
Capital Spending Reduction
– Even during the low interest decade, Joe Fresh 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Joe Fresh: Ethical Sourcing, it seems that the employees of Joe Fresh 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.
No frontier risks strategy
– After analyzing the HBR case study Joe Fresh: Ethical Sourcing, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Joe Fresh: Ethical Sourcing, is just above the industry average. Joe Fresh 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.
Interest costs
– Compare to the competition, Joe Fresh 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.
Opportunities Joe Fresh: Ethical Sourcing | 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 Joe Fresh: Ethical Sourcing are -
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. Joe Fresh can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Joe Fresh can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Joe Fresh in the consumer business. Now Joe Fresh can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Joe Fresh 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Joe Fresh can use these opportunities to build new business models that can help the communities that Joe Fresh operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Joe Fresh 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 Joe Fresh to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Joe Fresh is facing challenges because of the dominance of functional experts in the organization. Joe Fresh: Ethical Sourcing 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.
Better consumer reach
– The expansion of the 5G network will help Joe Fresh to increase its market reach. Joe Fresh 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.
Manufacturing automation
– Joe Fresh 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Joe Fresh 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, Joe Fresh: Ethical Sourcing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Joe Fresh can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Joe Fresh: Ethical Sourcing 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.
Creating value in data economy
– The success of analytics program of Joe Fresh has opened avenues for new revenue streams for the organization in the industry. This can help Joe Fresh to build a more holistic ecosystem as suggested in the Joe Fresh: Ethical Sourcing case study. Joe Fresh 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
– Joe Fresh 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 Joe Fresh: Ethical Sourcing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Joe Fresh to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Joe Fresh: Ethical Sourcing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Joe Fresh: Ethical Sourcing are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Joe Fresh 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 Joe Fresh: Ethical Sourcing .
Regulatory challenges
– Joe Fresh 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.
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 Joe Fresh.
High dependence on third party suppliers
– Joe Fresh 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.
Technology acceleration in Forth Industrial Revolution
– Joe Fresh has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Joe Fresh 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.
Increasing wage structure of Joe Fresh
– 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 Joe Fresh.
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. Joe Fresh needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Environmental challenges
– Joe Fresh 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. Joe Fresh can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Consumer confidence and its impact on Joe Fresh 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.
Shortening product life cycle
– it is one of the major threat that Joe Fresh is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Joe Fresh in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Joe Fresh 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.
Weighted SWOT Analysis of Joe Fresh: Ethical Sourcing 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 Joe Fresh: Ethical Sourcing 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 Joe Fresh: Ethical Sourcing 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 Joe Fresh: Ethical Sourcing 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 Joe Fresh: Ethical Sourcing 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 Joe Fresh needs to make to build a sustainable competitive advantage.