AllHerb.com: Evolution of an E-tailer SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AllHerb.com: Evolution of an E-tailer
Serial entrepreneur Ken Hakuta, in the second year of his latest venture, reconsiders his original strategy of maintaining an independent, self-funded, self-led company. His Internet herbal remedy company, AllHerb.com, has already enjoyed considerable success with its unorthodox approach to funding, marketing, customer service, fulfillment, and internal organization. However, with the changing e-tailing climate and the many challenges of guiding an Internet company to success, Hakuta reexamines his options for the future.
Swot Analysis of "AllHerb.com: Evolution of an E-tailer" written by Teresa M. Amabile, Christina Darwall includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Allherb.com Hakuta facing as an external strategic factors. Some of the topics covered in AllHerb.com: Evolution of an E-tailer case study are - Strategic Management Strategies, Entrepreneurship, Human resource management, Internet and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the AllHerb.com: Evolution of an E-tailer casestudy better are - – geopolitical disruptions, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, talent flight as more people leaving formal jobs,
increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of AllHerb.com: Evolution of an E-tailer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AllHerb.com: Evolution of an E-tailer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Allherb.com Hakuta, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Allherb.com Hakuta 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 AllHerb.com: Evolution of an E-tailer can be done for the following purposes –
1. Strategic planning using facts provided in AllHerb.com: Evolution of an E-tailer case study
2. Improving business portfolio management of Allherb.com Hakuta
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 Allherb.com Hakuta
Strengths AllHerb.com: Evolution of an E-tailer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Allherb.com Hakuta in AllHerb.com: Evolution of an E-tailer Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Allherb.com Hakuta in the sector have low bargaining power. AllHerb.com: Evolution of an E-tailer has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Allherb.com Hakuta to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Allherb.com Hakuta is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the AllHerb.com: Evolution of an E-tailer 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.
Organizational Resilience of Allherb.com Hakuta
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Allherb.com Hakuta does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Allherb.com Hakuta has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Allherb.com Hakuta digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Allherb.com Hakuta 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)
– Allherb.com Hakuta 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 AllHerb.com: Evolution of an E-tailer - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Allherb.com Hakuta 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.
Training and development
– Allherb.com Hakuta has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AllHerb.com: Evolution of an E-tailer 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.
Highly skilled collaborators
– Allherb.com Hakuta 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 AllHerb.com: Evolution of an E-tailer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Allherb.com Hakuta 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 Teresa M. Amabile, Christina Darwall 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 recruit top talent
– Allherb.com Hakuta is one of the leading recruiters in the industry. Managers in the AllHerb.com: Evolution of an E-tailer are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses AllHerb.com: Evolution of an E-tailer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AllHerb.com: Evolution of an E-tailer are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AllHerb.com: Evolution of an E-tailer 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 Allherb.com Hakuta has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Teresa M. Amabile, Christina Darwall suggests that, Allherb.com Hakuta 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AllHerb.com: Evolution of an E-tailer, it seems that the employees of Allherb.com Hakuta 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Allherb.com Hakuta is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AllHerb.com: Evolution of an E-tailer can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Allherb.com Hakuta 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.
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 Allherb.com Hakuta supply chain. Even after few cautionary changes mentioned in the HBR case study - AllHerb.com: Evolution of an E-tailer, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Allherb.com Hakuta vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Allherb.com Hakuta, firm in the HBR case study AllHerb.com: Evolution of an E-tailer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As AllHerb.com: Evolution of an E-tailer HBR case study mentions - Allherb.com Hakuta 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.
Lack of clear differentiation of Allherb.com Hakuta products
– To increase the profitability and margins on the products, Allherb.com Hakuta needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Allherb.com Hakuta 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. Allherb.com Hakuta 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.
Interest costs
– Compare to the competition, Allherb.com Hakuta 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 AllHerb.com: Evolution of an E-tailer | 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 AllHerb.com: Evolution of an E-tailer 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 Allherb.com Hakuta in the consumer business. Now Allherb.com Hakuta can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Allherb.com Hakuta 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 AllHerb.com: Evolution of an E-tailer - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Allherb.com Hakuta to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Allherb.com Hakuta can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Allherb.com Hakuta 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, AllHerb.com: Evolution of an E-tailer, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Allherb.com Hakuta 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 Allherb.com Hakuta to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Allherb.com Hakuta 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.
Better consumer reach
– The expansion of the 5G network will help Allherb.com Hakuta to increase its market reach. Allherb.com Hakuta 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.
Creating value in data economy
– The success of analytics program of Allherb.com Hakuta has opened avenues for new revenue streams for the organization in the industry. This can help Allherb.com Hakuta to build a more holistic ecosystem as suggested in the AllHerb.com: Evolution of an E-tailer case study. Allherb.com Hakuta can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Allherb.com Hakuta 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. Allherb.com Hakuta 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.
Manufacturing automation
– Allherb.com Hakuta 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.
Developing new processes and practices
– Allherb.com Hakuta 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.
Building a culture of innovation
– managers at Allherb.com Hakuta 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Allherb.com Hakuta can use these opportunities to build new business models that can help the communities that Allherb.com Hakuta operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats AllHerb.com: Evolution of an E-tailer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AllHerb.com: Evolution of an E-tailer are -
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 Allherb.com Hakuta business can come under increasing regulations regarding data privacy, data security, etc.
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. Allherb.com Hakuta 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 Allherb.com Hakuta in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Allherb.com Hakuta has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Allherb.com Hakuta 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 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. Allherb.com Hakuta 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.
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 Allherb.com Hakuta.
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. Allherb.com Hakuta can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Allherb.com Hakuta 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.
High dependence on third party suppliers
– Allherb.com Hakuta high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AllHerb.com: Evolution of an E-tailer, Allherb.com Hakuta 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 .
Regulatory challenges
– Allherb.com Hakuta 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.
Weighted SWOT Analysis of AllHerb.com: Evolution of an E-tailer 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 AllHerb.com: Evolution of an E-tailer 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 AllHerb.com: Evolution of an E-tailer 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 AllHerb.com: Evolution of an E-tailer 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 AllHerb.com: Evolution of an E-tailer 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 Allherb.com Hakuta needs to make to build a sustainable competitive advantage.
