Hungerit Case Solution

The Harvard Business Review published a case study that primarily focuses on Hungerit. The following case solution has been designed to give the reader an overview about the business world along with a clear understanding of its growth dynamics. Recently, Hungerit has been subjected to strategic as well as managerial problems that require immediate attention so that they can be resolved to allow future growth, expansion, and competitive edge within the marketplace. This case study solution is being written to provide a strategic solution to Hungerit using various appropriate tools and frameworks. Harvard Business Review’s case studies involve a central problem that is faced by a particular company. The problem identified involves strategic and managerial implications for the company. Therefore, it is important for readers to critically identify the problem Hungerit faces. Moreover, it is also essential to highlight the key stakeholders that are impacted and influenced by the problem identified.

External Environmental Analysis

The external environment holds significant importance for Hungerit to ensure that the company is able to respond to all the changes in the macro-environment. This is because Hungerit cannot control the factors and thus can directly influence the company's operations (Indris & Primiana, 2015). The external environment of Hungerit will be assessed using PESTLE Analysis.

Political

• A stable political environment provides a favorable market growth trend for Hungerit.

• It is important for Hungerit to analyze the pressure groups, and social environment activists. The company can make close collaborations with these groups to achieve company goals (Wang, Wang, & Shi, 2022).

• High restrictions on trade and high levels of taxes can contribute to the complex business environment for Hungerit by impacting imports and exports.

Economic

• Hungerit can benefit from wide-range opportunities in business growth by operating in developing economies (Munro, 2017).

• High GDP can determine the long-term growth strategies of Hungerit, signaling the ability of consumers to spend on more products.

• Higher rates of interests can provide Hungerit with more investment opportunities.

• The flexibility in the labor market allows Hungerit to take advantage of higher workforce productivity.

Social

• The selection of appropriate demographic segments has allowed Hungerit to select the right segments of the market that have high growth potential.

• The research on gender roles has helped Hungerit to develop and align communication as well as marketing strategies accordingly.

• Hungerit has been successful in understanding the norms and cultures of different countries by developing local teams and partnerships (Hueske, Endrikat, & Guenther, 2015).

Technological

• The adoption of innovative marketing techniques that involves communication technologies has allowed Hungerit to collaborate successfully with consumers.

• The company has stayed ahead in the market, and can significantly increase its market share by placing its major focus on emerging technologies (Akpoviroro & Owotutu, 2018).

• Hungerit should maximize its profits by investing in disruptive technologies.

Environmental

• It is crucial for Hungerit to adopt effective waste management practices to reduce environmental pollution (J. K, W. J, & D., 2016).

• Hungerit should adopt eco-friendly products to establish better relationships with the stakeholders.

• Hungerit can take advantage of subsidies offered in renewable technologies to achieve the long-term goal of sustainability.

Legal

• Hungerit should follow proper laws concerning employee health and safety, and anti-discrimination laws to effectively develop HRM.

• Consumer protection laws are also important for Hungerit as it involves the consumer protection from fraudulent marketing (S. Samusenko, S. Plaskova, & A. Prodanova, 2020).

• Hungerit can gain a competitive advantage, and can position itself strongly in the market by protecting intellectual property laws.

Porter’s Five Forces Analysis

Threat of New Entrants

• It is difficult to achieve economies of scale in Hungerit’s industry, making it a weaker force for new entrants.

• There are high capital requirements in the industry. This makes it difficult for new businesses to set up their companies, and compete against Hungerit.

• The industry has a strong product differentiation, and heavy investment is needed for customer acquisition. Thus, Hungerit can focus on innovation to differentiate itself from its competitors (H. Th. Bruijl, 2018).

• There are strict legal requirements to join the industry in which Hungerit operates, making it difficult for new entrants to enter the market.

Bargaining Power of Suppliers

• The bargaining power of suppliers in the industry is weak.

• Hungerit operates in an industry with a higher number of suppliers. This means that suppliers do not have much control over their prices.

• Standardized products that have low switching costs are provided by suppliers allowing buyers like Hungerit to easily switch their suppliers (Fabbri & F.Klapper, 2016).

• Raw materials can be purchased at lower prices by Hungerit. The company can also switch suppliers for more reasonable pricing.

• Hungerit can benefit from a variety of suppliers as it can have multiple suppliers for its various geographical areas (Cho, Ke, & Han, 2019).

Bargaining Power of Buyers

• The bargaining power of buyers in the Hungerit industry is weak.

• There is a high product differentiation in the industry, making it difficult for buyers to switch to alternative firms.

• Hungerit can come with differentiated and innovative products to attract more buyers of the industry (Zhao, Zuo, & Wu, 2016).

• Buyers of this industry has low incomes. This means they prefer to purchase items at lower prices, making them more price sensitive. Organizations like Hungerit can offer lower prices to attract customers.

Threat of Substitute Products or Services

• There are few substitute products available in the industry in which Hungerit operates.

• Expensive substitutes are available in the industry of Hungerit, making it difficult for buyers to switch to those substitutes (Aithal, 2016).

Rivalry Among Existing Firms

• The rivalry among existing firms is moderate to weak.

• There are few competitors in the industry in which Hungerit operates.

• A large market share is enjoyed by fewer firms in the industry. This means that more competitive actions will be made to become leaders in the market (Seema, 2016).

• The industry in which Hungerit operates has highly differentiated products, making it difficult for companies to win each other customers.

• Hungerit can focus on making more differentiated products to gain a strong competitive edge in the market (Zhao, Zuo, & Wu, 2016).

Internal Environmental Analysis

Hungerit can use internal environmental analysis to identify and evaluate the competitive positioning of a company in the business environment. This involves conducting a SWOT Analysis that can help Hungerit to identify the company’s internal strengths, weaknesses, opportunities, and threats (Halmaghi, Iancue, & Băcilă, 2017).

SWOT Analysis

Strengths

• Hungerit has a strong distribution network that has allowed it to make its products available to large customers within the given timeframe.

• A strong presence on social media platforms has allowed Hungerit to have a high level of customer engagement (Rizaldi, 2015).

• Hungerit has been successful in building a large product portfolio, so unique and distinctive products can be offered to consumers.

• Hungerit has a strong brand image in the market.

• A low-cost structure of Hungerit has allowed it to manufacture products at lower costs, so they become affordable for consumers to purchase.

• The financial position of Hungerit is strong as the company has generated higher profits over the past years (Phadermrod, M.Crowder, & B.Wills, 2019).

• Hungerit has invested in the training and development of its employees to keep them motivates, leading to higher efficiency and productivity.

Weaknesses

• The expenditure of Hungerit on its research and development is comparatively less to other competitors of the market.

• Hungerit uses a centralized decision-making process that takes time and reduces operational efficiency (Ahmadi, Dileepan, & K. Wheatley, 2016).

• There are high rental costs because Hungerit operates on more of the rental properties rather than purchasing them.

• There is no workforce diversification in Hungerit. This makes it difficult for the employees to adjust with the different workers who belong to different backgrounds.

Opportunities

• Since the online shopping has increased significantly, Hungerit can take it as an opportunity to expand its online presence.

• Hungerit can make use of social media platforms to market its products, with more customers interactions.

• Due to more technological developments, Hungerit can make its operations more automated so that overall company costs can be reduced (Ahmadi, Dileepan, & K. Wheatley, 2016).

• Globalization provides an opportunity to Hungerit to expand its operations in multiple countries.

• Hungerit can enter in a niche market and sell distinctive products to gain a competitive advantage.

• The increase in the demand of environmentally friendly goods, Hungerit, can place its major focus on making such products (E.Quezada, A.Reinao, & I.Palominos, 2019).

Threats

• In recent times, there has been an increase in the bargaining power of suppliers, making it difficult for Hungerit to buy raw materials at lower costs.

• Numerous players are entering the industry, posing a major threat to Hungerit.

• There has been constant pressure on Hungerit to conduct frequent research to understand the changing customer tastes and preferences (Kolbina, 2015).

• Technological advancements require workforce training. This adds to the costs of Hungerit.

VRIO Analysis

Hungerit uses VRIO Analysis to assess and evaluate the company resources to determine the competitiveness, and strategic advantage.

Valuable

• Hungerit has a strong brand image and engages in corporate social responsibility.

• Hungerit has a high brand recognition because of the quality of products it offers to its customers (Ariyani & Daryanto, 2018).

• The distribution system of Hungerit is valued all round the world. The company has been able to successfully establish strong relationships with its suppliers.

• Hungerit focuses on continuous innovation in its business. The company has expanded this innovation in its multiple functional areas.

• There are potential growth opportunities in the market, and Hungerit has been able to penetrate the market through its ability to raise large funds.

Rare

• Hungerit operates globally. This global presence has allowed the company to increase its customer base (Miethlich & G. Oldenburg, 2019).

• Hungerit has an organizational culture that promotes more teamwork, innovation, and creativity among its employees, that leads to a competitive advantage.

• Since Hungerit has a global presence, it allows the company to easily adapt to different cultures, norms and values.

• The risk-taking ability of Hungerit is strong. This provides more opportunities to the company to penetrate different markets.

Inimitable

• The inimitable resource for Hungerit is its high-quality products. These products have allowed consumers to make repeat purchases.

• Hungerit operates through multiple locations of stores in different companies, allowing easy access to products.

• Strong marketing communications have been used by Hungerit to attract more customers.

• Hungerit has been using integrated technology that has allowed it to offer competitive pricing to its customers (Ariwibowo, Saputro, & Haryanto, 2021).

• Hungerit maintains an excellent customer service that has enabled it to have a high brand engagement.

Organization

• Strong financial position has allowed Hungerit to explore more product development opportunities.

• Hungerit is successfully maintaining the efficiency and effectiveness of its business operations with the help of more integrated and advanced technology.

• Employees are given both in-house and off-the-job training opportunities by Hungerit that allow more skills development (Adnan, Abdulhamid, & Sohail, 2018).

• The strong value chain and distribution network has enabled Hungerit to increase its revenue through the sale of its products.

Marketing Mix

Marketing Mix is needed by Hungerit to formulate effective strategies to achieve the company objectives.

Product

• Hungerit has five product categories. Each of these categories has a product line that involves more variety of products (Išoraitė, 2016).

• Highly differentiated products are offered by Hungerit to its customers. These distinctive products are not easily available at competitors.

• The products of Hungerit are of higher quality, and thus, customers pay more prices for these products.

• Hungerit designs products with traditional designs giving customers more product variety.

• Hungerit offers multiple sizes for its every product to make it easy for its customers to select the right product.

• Warranty and same-day delivery option if also provided by Hungerit to its customers.

Price

• Hungerit follows a competitive pricing strategy.

• To attract more customers, bundle pricing has also been used by the company.

• Little higher prices are charged for products that are sold online because of the delivery costs (Thabit & Raewf, 2018).

• Optional product pricing strategy is also adopted by Hungerit for some of its products, such as a base product is offered for a certain price, and there are separate prices for its accessories.

• Regular promotional prices are also offered by Hungerit to its customers.

Place

• Hungerit uses two channels for its product distribution. This includes online selling and through own stores.

• There are more than multiple stores owned by Hungerit globally. This ensures easy product availability to customers (Pogorelova, Yakhneeva, & Agafonova, 2016).

• Hungerit has partnered with delivery service companies to distribute its products effectively to consumers.

• Hungerit has also adopted an omni-channel distribution system.

Promotion

• Hungerit uses a traditional promotional strategy that involves TV advertisements (Fan, Y.K.Lau, & Zhao, 2015).

• Social media advertisements are also adopted by Hungerit to increase brand awareness.

• Hungerit takes part in various events and exhibitions as a way of promoting its products.

• Large sales force is used to provide the customers with a more personal experience.

• Hungerit also makes use of influencer marketing to increase the demand for its products.

• Regular content and deals are posted on the social media pages of Hungerit to attract and retain customers.

Value Chain Analysis

Hungerit can use Value Chain Analysis to identify and assess inter-relationships as well as interdependencies.

Primary Activities

• Hungerit’s primary activities involves the production and selling of products to the final consumers (Mintz, J.Gilbride, & Lenk, 2021).

• Hungerit has a strong relationship with the suppliers. This ensures that the product is received, stored, and distributed in a timely manner.

• Operational activities of Hungerit are effectively aligned.

• For inbound logistics, after the arrival of raw material, the company processes it to manufacture the final product (Hasan, Nekmahmud, & Yajuan, 2019).

• In terms of outbound logistics, Hungerit has been able to set up optimal costs as well as efficient delivery processes to deliver the product on time.

• Hungerit invests in its sales and marketing activities to build relationships with customers.

• Marketing funnel approach is used by Hungerit to effectively devise and build sales and marketing activities.

• Hungerit offers both pre-sale and post-sales services to its customers.

Secondary Activities

• Hungerit has an effective infrastructure that has allowed the company to successfully optimize its value chain.

• The competitive pressure in terms of employee skill development, motivation, and commitment is reduced as Hungerit has developed a strong HRM (Linkov, Carluccio, Pritchard, & Bhreasail, 2020).

• Hungerit uses a cost minimization approach to reduce its costs by analyzing the costs associated with training and hiring the employees.

• Hungerit has been using integrated technology in its value chain activities. This includes technological customer support, research and data analytics concerning product design, and automated software.

• The procurement activities of Hungerit are effectively optimized with its inbound, outbound, and operational activities (Maheswari, Yudoko, & Adhiutama, 2019).

Market Penetration Strategies

• Hungerit can increase the capacity of its production so it can reach more of the customers in its existing market.

• Hungerit can focus on controlling the overhead costs so that it can offer competitive pricing that can attract customers of the market (Dawes, 2018).

• Investments can be made by Hungerit in marketing and sales activities to increase the chances of successful market penetration.

• Hungerit can design and develop a content that increases customer engagement within a particular marketplace.

• Hungerit can assess and identify more enhanced distribution networks (Radpour, Mondal, & Kumar, 2017).

• Improved distribution systems and supply chains can improve the product accessibility for the customers, making it easier for Hungerit to penetrate the market.

• Hungerit can adopt price cuts in its products to compete in the market. This will give a company a competitive edge over its competitors.

• Hungerit can plan strategies where it can focus on acquiring the leading players of the market. Such acquisitions will give the company an opportunity to reach more customer segments.

• Strategic partnerships and joint ventures agreements can be signed by Hungerit to mitigate the risk factors, and to gain customer groups of the market.

• Hungerit can come up with new and innovative features in its already existing product for the market (Daouda, Barth, & T. M. Ingenbleek, 2019).

Market Development Strategies

• It is important for Hungerit to invest in the research and development department so potential markets can be identified (Hilman, Bohari, & Abdullah, 2018).

• Regional expansion strategy can be used by Hungerit for growth purposes. This will also take into consideration the cultural differences.

• Hungerit should also consider to expand its business operations in the international market. This will allow access to a larger customer base.

• New customer groups and segments should be explored by Hungerit.

• Hungerit should also invest in brand-building activities as it will give an opportunity to reach more potential customers (C. Koks & M. Kilika, 2016).

• Hungerit should consider the market education in terms of its product. The company can significantly increase its sales by giving product awareness to new segments.

Product Development Strategies

• Hungerit can come up with new improvements and modifications in the existing products to attract the market.

• Hungerit should undergo the NPD process, so the company is able to assess and identify new points for its customers.

• Regular investments in the research and development will help Hungerit to develop something new and innovative that can give a competitive advantage (Kalogiannidis & Mavratzas, 2020).

• Hungerit can develop new products by getting into more strategic partnerships.

Diversification Strategies

• Hungerit can adopt vertical diversification to develop business. This can be done by adding more products to the existing portfolio (Kalogiannidis & Mavratzas, 2020).

• Horizontal integration can also be adopted by Hungerit, where the company can enter into a completely new product development phase that does not exist in the current product line.

• Hungerit can also consider to conglomerate by starting a different business.

Conclusion

Based on all the models and frameworks discussed above, it is concluded that Hungerit should focus on widening the existing product portfolio. Moreover, the psychological pricing strategy can be adopted. Hungerit should also maintain close relationships with its suppliers to benefit from lower prices. Similarly, Hungerit should develop more integrated outbound logistics for its perishable items. It is also important to continue producing quality and innovative products, so Hungerit is less affected by the new emerging competition in the industry.

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