Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup
The case study discusses the human resource strategy of a fast-growing company in the highly competitive beauty spa industry in Malaysia. It examines how the founders' personal values and philosophies are expressed in the human resource policies and practices and the influence of these on the company's customer service delivery and service culture. HerbaLine's focus on excellent customer service enabled the founders, Mr. Low Chee-Kwong and Ms. Liu Kim-Hwa, to position the beauty spa operator as a viable alternative to expensive, high-end international beauty chains and low-cost, no frills individually-operated beauty salons. The success of their service strategy is reflected in the growth of the beauty spa operator from one outlet in 2000 to 55 outlets in 2014. With a vision to expand HerbaLine beauty spa to every major town in Malaysia, the founders embarked on a new a profit sharing scheme for high performing employees to reward performance and to sustain and grow the high levels of employee commitment and excellent service delivery that underpinned the company's growth. Could this be the motor that would enable the company to double its number of outlets to 100 by 2024?
Swot Analysis of "Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup" written by Beng Chong Lim, Beng Geok Wee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beauty Spa facing as an external strategic factors. Some of the topics covered in Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup case study are - Strategic Management Strategies, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, etc
Introduction to SWOT Analysis of Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beauty Spa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beauty Spa 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup can be done for the following purposes –
1. Strategic planning using facts provided in Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup case study
2. Improving business portfolio management of Beauty Spa
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 Beauty Spa
Strengths Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beauty Spa in Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Beauty Spa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Beauty Spa 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
– Beauty Spa is present in almost all the verticals within the industry. This has provided firm in Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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.
Ability to recruit top talent
– Beauty Spa is one of the leading recruiters in the industry. Managers in the Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Leadership & Managing People field
– Beauty Spa 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 Beauty Spa in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Beauty Spa 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.
Successful track record of launching new products
– Beauty Spa has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beauty Spa 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.
Learning organization
- Beauty Spa 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 Beauty Spa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Beauty Spa 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.
Operational resilience
– The operational resilience strategy in the Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup firm has clearly differentiated products in the market place. This has enabled Beauty Spa to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Beauty Spa to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Beauty Spa in the sector have low bargaining power. Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beauty Spa to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup, it seems that the employees of Beauty Spa 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.
Interest costs
– Compare to the competition, Beauty Spa 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Beng Chong Lim, Beng Geok Wee suggests that, Beauty Spa 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.
Lack of clear differentiation of Beauty Spa products
– To increase the profitability and margins on the products, Beauty Spa needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Beauty Spa 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 operating costs
– Compare to the competitors, firm in the HBR case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Beauty Spa 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Beauty Spa is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Beauty Spa needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beauty Spa to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup, is just above the industry average. Beauty Spa 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Beauty Spa has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup, in the dynamic environment Beauty Spa has struggled to respond to the nimble upstart competition. Beauty Spa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup | 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup are -
Building a culture of innovation
– managers at Beauty Spa 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beauty Spa 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 Beauty Spa to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beauty Spa can use these opportunities to build new business models that can help the communities that Beauty Spa operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Beauty Spa has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beauty Spa 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, Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beauty Spa 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, Beauty Spa 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.
Buying journey improvements
– Beauty Spa can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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.
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. Beauty Spa 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. Beauty Spa 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.
Using analytics as competitive advantage
– Beauty Spa 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beauty Spa to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Beauty Spa 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beauty Spa can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Beauty Spa can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup, Beauty Spa 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Beauty Spa with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Beauty Spa
– 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 Beauty Spa.
Regulatory challenges
– Beauty Spa 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.
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 Beauty Spa in the Leadership & Managing People sector and impact the bottomline 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 Beauty Spa.
Stagnating economy with rate increase
– Beauty Spa 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beauty Spa 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup .
Consumer confidence and its impact on Beauty Spa 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.
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.
High dependence on third party suppliers
– Beauty Spa 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
– Beauty Spa has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Beauty Spa 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.
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. Beauty Spa 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.
Weighted SWOT Analysis of Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Malaysia's HerbaLine Facial Spa: A Human Resource Strategy for Growing a Startup 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 Beauty Spa needs to make to build a sustainable competitive advantage.
