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, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing energy prices,
increasing household debt because of falling income levels, 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 -
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.
Ability to lead change in Leadership & Managing People field
– Joe Fresh 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 Joe Fresh in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Strong track record of project management
– Joe Fresh 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
– 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.
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.
Organizational Resilience of Joe Fresh
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Joe Fresh does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Joe Fresh in the sector have low bargaining power. Joe Fresh: Ethical Sourcing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Joe Fresh to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Joe Fresh: Ethical Sourcing firm has clearly differentiated products in the market place. This has enabled Joe Fresh to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Joe Fresh to invest into research and development (R&D) 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 -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Joe Fresh: Ethical Sourcing 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 Joe Fresh 's lucrative customers.
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.
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.
Need for greater diversity
– Joe Fresh has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Jaana Woiceshyn, Norm Althouse, Nigel Goodwin suggests that, Joe Fresh 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.
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.
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 Joe Fresh supply chain. Even after few cautionary changes mentioned in the HBR case study - Joe Fresh: Ethical Sourcing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Joe Fresh vulnerable to further global disruptions in South East Asia.
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.
Low market penetration in new markets
– Outside its home market of Joe Fresh, firm in the HBR case study Joe Fresh: Ethical Sourcing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
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.
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.
Leveraging digital technologies
– Joe Fresh can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Joe Fresh 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.
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. Joe Fresh 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. Joe Fresh 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.
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.
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.
Developing new processes and practices
– Joe Fresh 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.
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.
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.
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.
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.
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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Joe Fresh: Ethical Sourcing, Joe Fresh 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 .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Joe Fresh 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.
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.
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.
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 Joe Fresh 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. Joe Fresh 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.
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.
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.
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.
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.
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.