SWOT Case Study - Yahoo!

Strengths.

• Yahoo!'s Overture is a tremendously profitable Internet advertising business. It focuses on affiliate advertising for large advertising accounts, in the same way as Google's Adsense programme. This is an important income stream for Yahoo!.
• Yahoo! has over 350 million users of its services and solutions. This makes it a very powerful marketing company, with a very well known brand. Some reports indicate that is it is the most popular website in the World.
• • A key long-term strength is Yahoo!'s international business presence. As the Internet expands and it is adopted by more nations the opportunities for Internet brands begin to emerge. Yahoo! is well placed to take advantage of these opportunities with its strategic business units in Asia, Europe and Australia.
  • The Yahoo! Directory is an original source of structured information. It has built over the last decade, and unlike mainstream search engines, its content is moderated (i.e. sites are vetted before their inclusion).

  Weaknesses.

  • Differentiation is difficult for Yahoo!. Almost all of its packaged services are available from other sources.
  1. (i) Search facilities are available on MSN and Google.
  2. (ii) Free E-mail accounts are available from Hotmail (MSN) or G-Mail (Google), and many, many others.
  3. (iii) New is available from CNN or the BBC.
  4. (iv) Shopping is available everywhere on the Internet. Google has Froogle.
• Online advertising is a new income stream for organizations such as MSN, Yahoo! and Goggle. Yes, today they are very, very profitable. However, as technology develops and new unforeseen advertising media emerge, the future is uncertain for these income streams. This is a weakness for Yahoo! and its competitors.
• Another income stream that has been key to Yahoo! is derived from its partnerships with telecommunication providers. For example, you buy an Internet connection package from your local telephone company, and it includes a fee-based Yahoo! package including e-mail accounts, user support and other added value services. If ever this channel is changed or removed, the income stream would be affected.

• Opportunities

  • The international market is a huge opportunity for Yahoo!. Yahoo!, Microsoft and Google are busy carving niches and taking over businesses in are around the Greater China Region. China has over 1,200,000,000 citizens. Other economies, such as India, also offer tremendous growth potential.
  • The Development of the Yahoo! Directory has potential for new business and income streams. Two thirds of organizations in Ohmae's Triad (Europe, Japan and the USA) are Small Medium Enterprises (SME'). SME's are potential directory advertisers.
  • Mobile technologies offer another opportunity for Yahoo!. Today we access the Internet using personal computers. Tomorrow phones, televisions, personal organisers, music players and computers will merge and morph. The mobile devices of the future will need services and solutions. Yahoo! would be well placed to provide many of them.

  Threats.

• The biggest threat for all web-based organization is competition. Huge profits attract investors, innovators and entrepreneurs. Dotcom fever has not gone away, it is now more focused on profit delivery. All of Yahoo!'s key services have competitors such as AOL, Google and many others.
• International, culture specific competitors could affect Yahoo! in the future, unless strategic alliances are forged. China has developed its own search engines, as has India. Why should the World use USA based companies such as Yahoo!? There needs to be a series of substantial competitive advantages to see the business remain as an international brand. Look at what has been learned from the global car industry, or electronics industry.
• by Mkt Teachers

SWOT Case Study - Williams-Sonoma

Company Overview

Williams-Sonoma is a US based specialty retailer of higher-end lifestyle and home furnishing products. They sell their merchandise through three channels: retail stores, catalogs and six websites. It is headquartered in San Francisco, California.

Charles E. Williams established the first Williams-Sonoma store in Sonoma, California in 1956. The company began its direct-to-customer (DTC) business in 1972 by launching its flagship catalog, under Williams-Sonoma brand. They acquired Pottery Barn, a retailer of casual home furnishings, in 1986, from The Gap. The first Pottery Barns Kids store was opened in 2000, and its website followed a year after. Williams-Sonoma is a US-based multi-channel retailer of lifestyle products that focuses on home furnishing and accessories. The company offers home products ranging from culinary, and serving equipment such as cookware, cookbooks, cutlery, informal dinnerware, glassware, table linens, specialty foods, cooking ingredients to home furnishings. Williams-Sonoma markets these products through retail stores, catalogs and through the Internet.

Mr. Williams procures the merchandise for the company from foreign and domestic manufacturers and importers located in about 43 countries, located primarily in Asia and Europe. The company operates through two segments: retail and direct-to-customer (DTC).

Strengths

• In 2008, the company operated 600 retail stores in 44 US states, Washington, D.C, and Canada. This includes 256 Williams-Sonoma, 198 Pottery Barn, 94 Pottery Barn Kids, 27 West Elm, nine Williams-Sonoma Home and 16 outlet stores.
• They also sell their products through six websites: williams-sonoma.com, potterybarn.com, potterybarnkids.com, pbteen.com, westelm.com, and wshome.com. They also have seven successful mail-order catalogs.
• Their extensive store network helps it cater to a varied consumer needs and segments and create product awareness and loyalty.
• Online sales, improve their margins by cutting down its operating costs. The websites and catalogs create awareness about its products amongst customers. Multiple retail channels enable the company to enhance its reach, cater to a wider customer base and meet their diverse needs efficiently.
• • Their strong brand portfolio caters to an upper-class, higher-end consumer niche of the home furnishing and accessories industries. Their portfolio, focused on various demographic segments and varied customer needs, provides a competitive advantage.
  • The company's core brands are Williams-Sonoma, Pottery Barn and Pottery Barn Kids.  
  • Williams-Sonoma focuses on kitchen-related cookware and other products including pots, pans, cookware, knives, storage containers, small electrical appliances, table linens, flatware and glassware. They also have higher-end private label food products.
  • Pottery Barn stores sell oversized, stuffed chairs, candles, mirrors, frames, pillows, blankets, rugs and window treatments and furniture.
  • Pottery Barn Kids is an extension of the Pottery Barn concept and focuses on children's furnishing and accessories. Pottery Barn Kids also offer the option of customization of products.
  • PBteen targets teenagers with its bright colored, sport themed, customized and other theme-based lifestyle products.
  • West Elm's products are more simple and modern than what is usually found in a Pottery Barn store. The merchandise is priced at 'mass market' points.
  • Williams-Sonoma Home targets high-end customers with its more formal furniture and home decor products.
  • In 2008, the company implemented a new retail inventory management system. This gave them a strong retail and operations system, as well as an advantageous distribution system. They are highly successful at logistics, inventory management of stores and delivery of stock through their catalogs and websites.

  Weaknesses

  • Similar products are available at a lower price point in big box stores such as Target and Wal-Mart stores.
  • Multiple retail channels increases proximity with customers, which in turn, would lead to top line growth. However, the US home furnishings store industry is fragmented with 50 largest companies comprising 70% of the industry sales, making it a difficult industry to survive in.
  • The company has had declining profitability since 2006. The company's operating profit and net profit declined from $345.1 million and $214.9 million in 2006 to an operating profit and a net profit of $313.4 million and $195.8 million in 2008.
  • The decline in profitability, operating cash flows and margins could hamper expansion plans which could erode the investor confidence in the company.
  • The company faced a copyright infringement suit in 2008, alleging that they used copyrighted designs for their rugs.
  • In 2008  the housing sector in the US experienced one of its most significant downturns in 40 years. This downturn resulted in substantial volatility in the financial markets and depressed growth rates in the home furnishings and accessories industry overall.
  • Consumer Confidence in the US declined in 2007-2010, due to lower sales of homes, rising fuel prices, a weaker labor market and stricter laws for borrowing money.

  Opportunities

  • The company is working on restoring sales and the reputation of its core brands through a five pronged strategy: offering innovative, unique products to its core customers, capitalizing on the changing trends; improving its marketing and visual merchandising for a more exciting shopping experience; and is testing new shipping charges.
  • They are stressing value to attain competitive advantage, changing their product display and presentation in stores. This includes remixing the assortment, re-allocating floor space among categories, and improving in-store merchandising.
  • They increased retail leased square footage by approximately 8% in fiscal 2009 and also plans to expand or remodel additional 20 stores.
  • They are putting high emphasis on direct marketing in order to enhance customer reach. In FY2008, the company improved its online sales operations by implementing new functionality in DTC marketing systems, which enabled the company to reduce catalog circulation and improve the relevancy of its on-line marketing.
  • They have also begun to focus on cost cutting in order to obtain a competitive advantage.  They reduced the shipping rates of Pottery Barn products. Williams-Sonoma adjusted the shipping rates in its 2008 spring catalog. Reducing shipping rates could lend towards 'Pottery Barn' brand revitalization, acquiring new customers and also translate to growth.
  • Moving into a global economy could diversify risk and create a more recognizable brand name.
  • They can also consider partnering with Whole Foods, Inc., an organic grocery chain that caters to demographically similar customers.

  Threats

  • Williams-Sonoma faces intense competition from local, regional and national retailers including department stores, specialty stores, mail-order retailers, discount and mass merchandize stores, and national chains. Their major competitors are Bed, Bath & Beyond, Crate and Barrel, Wal-Mart, Target, Home Depot, JC Penny, Haverty Furniture, and Cost Plus.
  • Any continued long-term slowdown in US housing market will continue to affect their sales and revenues. As sales of houses slow down, so does the sale of home furnishings, home improvement products and accessories.
  • by Mkt Teachers

SWOT Case Study - Whole Food

Company History

In 1980 twenty-five year old college dropout John Mackey and twenty-one year old Rene Lawson Hardy created the Whole Food Company (WFC) in Austin, Texas. It was born with the idea to provide a grocery store featuring good, wholesome food; not a "health food" store filled with pills and potions. Sales doubled each year for the first four years. This SWOT analysis is about Whole Foods.

Strengths

• Whole Foods Market (Whole Foods) owns and operates a chain of natural and organic foods supermarkets through several wholly-owned subsidiaries. The company's supermarkets are located in the US, Canada, and the UK. It employs about 52,900 people.
• In 1984, Whole Foods Market began its expansion out of Austin. While continuing to open new stores from the ground up, they fueled rapid growth by acquiring other natural foods chains throughout the 90's: Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island, Mrs. Gooch's Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and in the Midwest, Florida Bread of Life stores, Detroit area Merchant of Vino stores, and Nature's Heartland of Boston. In 2001, Whole Foods moved into Manhattan, generating a good deal of interest from the media and financial industries. 2002 saw an expansion into Canada and in 2004, Whole Foods Market entered the United Kingdom with the acquisition of seven Fresh & Wild stores.
• The company recorded revenues of $7,953.9 million during the financial year (FY) ended September 2008, an increase of 20.7% over FY2007.
• They have had 25 years of double digit revenue growth.
• They are the undisputed $4.7B Organic Supermarket Industry Leader.
• Originally, health food stores were small, expensive, and didn't carry a large variety of products, Whole Foods changed all of this and they became the founding firm of this industry.
• They offer catering , seasonal products and recipes, in-store events such as cooking classes, free tours around the store for customers with food allergies.
• • They have an amazing website with blogs, recipes, sale items, tips, podcasts and more. The website is well designed and explains the Whole Foods concept very well.
  • They are supported by complementary industries such as: Health Industry, Health Insurance Companies, Health Care Specialists, Fitness Centers and Wellness Programs.
  • Whole Foods has a commitment to selling high quality natural and organic products, satisfying and delighting its customers, and caring about their communities and environment. These three factors, in large part, are why customers are attracted to the brand.
  • They have a hip image and attract younger, more affluent shoppers.
  • Their reputation for having the largest selection of organic, healthy, locally grown foods of any supermarket worldwide makes them attractive to customers.

  Weaknesses

  • Right now the US government subsidizes (provides money to support) the corn growers industry, but not the organic farmer-therefore companies not utilizing organic ingredients can grow more food cheaper and faster.
  • The number of organic food farmers is growing, but slowly and the supply chain for organic foods is underdeveloped and cannot meet the needs of the American food system.
  • They are known as "whole paycheck" because some of the foods are higher priced than other grocery stores.

  Opportunities

  • The commitment to high quality natural and organic foods leads to higher prices than non organic and natural foods. As the world is becoming more aware of how important it is to eat healthy, Whole Foods need to be there to pull those consumers in to the stores. Many consumers have the misconception that healthy foods are more expensive then other foods, when in fact they do provide a store brand that is comparable in price to other grocery chains. Whole Foods needs to change the attitudes of those consumers.
  • During a time when the economy is in a downturn, Whole Foods has to find a cost effective way to give a little something back to customers that do buy on a regular basis and try to get new customers in the same tactic. Making a free rewards card--after so much bought or points accumulated a customer can get a discount on the next purchase or get something free from the store.
  • They could sponsor more town events (not just in-store events) to increase recognition of the brand name and make customers more aware of the products they offer.
  • They need to promote and build brand identity with organic foods, eventually leading to the idea that when people think "organic" they will think "Whole Foods."

  Threats

  • Whole Foods has increased competition from existing supermarkets that are re-branding in order to compete with them-Wal-Mart, HEB Central Market (Texas, Mexico) Wegman's (New York), and Publix (Southern US). These stores have copied the atmospherics and some of the food items sold by Whole Foods.
  • The economic situation in the US is a threat due to Americans' desire to save money and that means groceries. Food is expensive and Americans' don't see the cost effectiveness of purchasing organic food.
  • Any changes in government regulations on organic food would impact consumer spending even further.
  • by Mkt Teachers

SWOT Case Study - Wal Mart

Strengths

• Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.
• Wal-Mart has grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA).
• • The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient procurement.
  • A focused strategy is in place for human resource management and development. People are key to Wal-Mart's business and it invests time and money in training people, and retaining a developing them.

  Weaknesses

• Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.
• Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not have the flexibility of some of its more focused competitors.
• The company is global, but has has a presence in relatively few countries Worldwide.

• Opportunities

  • To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region.
  • The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer markets, such as China and India.
  • New locations and store types offer Wal-Mart opportunities to exploit market development. They diversified from large super centres, to local and mall-based sites.
  • Opportunities exist for Wal-Mart to continue with its current strategy of large, super centres.

  Threats

• Being number one means that you are the target of competition, locally and globally.
• Being a global retailer means that you are exposed to political problems in the countries that you operate in.
• The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost regions of the World. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.
• by Mkt Teachers