Esporte Interativo Case Solution

The Harvard Business Review published a case study that primarily focuses on Esporte Interativo. 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, Esporte Interativo 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 Esporte Interativo 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 Esporte Interativo 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 Esporte Interativo to ensure that the company is able to respond to all the changes in the macro-environment. This is because Esporte Interativo cannot control the factors and thus can directly influence the company's operations (Indris & Primiana, 2015). The external environment of Esporte Interativo will be assessed using PESTLE Analysis.

Political

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

• It is important for Esporte Interativo 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 Esporte Interativo by impacting imports and exports.

Economic

• Esporte Interativo 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 Esporte Interativo, signaling the ability of consumers to spend on more products.

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

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

Social

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

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

• Esporte Interativo 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 Esporte Interativo 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).

• Esporte Interativo should maximize its profits by investing in disruptive technologies.

Environmental

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

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

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

Legal

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

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

• Esporte Interativo 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 Esporte Interativo’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 Esporte Interativo.

• The industry has a strong product differentiation, and heavy investment is needed for customer acquisition. Thus, Esporte Interativo 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 Esporte Interativo 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.

• Esporte Interativo 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 Esporte Interativo to easily switch their suppliers (Fabbri & F.Klapper, 2016).

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

• Esporte Interativo 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 Esporte Interativo industry is weak.

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

• Esporte Interativo 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 Esporte Interativo can offer lower prices to attract customers.

Threat of Substitute Products or Services

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

• Expensive substitutes are available in the industry of Esporte Interativo, 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 Esporte Interativo 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 Esporte Interativo operates has highly differentiated products, making it difficult for companies to win each other customers.

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

Internal Environmental Analysis

Esporte Interativo 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 Esporte Interativo to identify the company’s internal strengths, weaknesses, opportunities, and threats (Halmaghi, Iancue, & Băcilă, 2017).

SWOT Analysis

Strengths

• Esporte Interativo 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 Esporte Interativo to have a high level of customer engagement (Rizaldi, 2015).

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

• Esporte Interativo has a strong brand image in the market.

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

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

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

Weaknesses

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

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

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

• There is no workforce diversification in Esporte Interativo. 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, Esporte Interativo can take it as an opportunity to expand its online presence.

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

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

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

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

• The increase in the demand of environmentally friendly goods, Esporte Interativo, 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 Esporte Interativo to buy raw materials at lower costs.

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

• There has been constant pressure on Esporte Interativo 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 Esporte Interativo.

VRIO Analysis

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

Valuable

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

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

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

• Esporte Interativo 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 Esporte Interativo has been able to penetrate the market through its ability to raise large funds.

Rare

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

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

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

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

Inimitable

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

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

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

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

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

Organization

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

• Esporte Interativo 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 Esporte Interativo that allow more skills development (Adnan, Abdulhamid, & Sohail, 2018).

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

Marketing Mix

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

Product

• Esporte Interativo 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 Esporte Interativo to its customers. These distinctive products are not easily available at competitors.

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

• Esporte Interativo designs products with traditional designs giving customers more product variety.

• Esporte Interativo 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 Esporte Interativo to its customers.

Price

• Esporte Interativo 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 Esporte Interativo 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 Esporte Interativo to its customers.

Place

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

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

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

• Esporte Interativo has also adopted an omni-channel distribution system.

Promotion

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

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

• Esporte Interativo 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.

• Esporte Interativo 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 Esporte Interativo to attract and retain customers.

Value Chain Analysis

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

Primary Activities

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

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

• Operational activities of Esporte Interativo 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, Esporte Interativo has been able to set up optimal costs as well as efficient delivery processes to deliver the product on time.

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

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

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

Secondary Activities

• Esporte Interativo 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 Esporte Interativo has developed a strong HRM (Linkov, Carluccio, Pritchard, & Bhreasail, 2020).

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

• Esporte Interativo 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 Esporte Interativo are effectively optimized with its inbound, outbound, and operational activities (Maheswari, Yudoko, & Adhiutama, 2019).

Market Penetration Strategies

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

• Esporte Interativo 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 Esporte Interativo in marketing and sales activities to increase the chances of successful market penetration.

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

• Esporte Interativo 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 Esporte Interativo to penetrate the market.

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

• Esporte Interativo 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 Esporte Interativo to mitigate the risk factors, and to gain customer groups of the market.

• Esporte Interativo 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 Esporte Interativo 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 Esporte Interativo for growth purposes. This will also take into consideration the cultural differences.

• Esporte Interativo 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 Esporte Interativo.

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

• Esporte Interativo 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

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

• Esporte Interativo 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 Esporte Interativo to develop something new and innovative that can give a competitive advantage (Kalogiannidis & Mavratzas, 2020).

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

Diversification Strategies

• Esporte Interativo 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 Esporte Interativo, where the company can enter into a completely new product development phase that does not exist in the current product line.

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

Conclusion

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

References

Adnan, M., Abdulhamid, T., & Sohail, B. (2018). Predicting Firm Performance through Resource Based Framework . European Journal of Business and Management .

Ahmadi, M., Dileepan, P., & K. Wheatley, K. (2016). A SWOT analysis of big data. Journal of Education for Business , 289-294 .

Aithal, P. S. (2016). Study on Esporte Interativo Analysis Technique for Business Models, Business Strategies, Operating Concepts & Business Systems. International Journal in Management and Social Science, 95-115.

Akpoviroro, K. S., & Owotutu, S. O. (2018). Impact of external business enviornment on organizational performance . International Journal of Advance Research and Innovative Ideas in Education, 498-505.

Ariwibowo, P., Saputro, F. B., & Haryanto, H. (2021). Analysis of Strength & Weakness, Using the Concept of Resource-Based View with the VRIO Framework in Sharia Cooperatives. Jurnal Manajemen Strategi Dan Aplikasi Bisnis, 279 - 294.

Ariyani, W., & Daryanto, A. (2018). Operationalization of Internal Analysis Using the VRIO Framework: Development of Scale for Resource and Capabilities Organization (Case Study: XYZ Company Animal Feed Business Unit). Asian Business Research Journal .

C. Koks, S., & M. Kilika, J. (2016). Towards a Theoretical Model Relating Product Development Strategy, Market Adoption and Firm Performance: A Research Agenda. Journal of Management and Strategy.

Cho, W., Ke, J.-y. F., & Han, C. (2019). An empirical examination of the use of bargaining power and its impacts on supply chain financial performance. Journal of Purchasing and Supply Management.

Daouda, F. B., Barth, P., & T. M. Ingenbleek, P. (2019). Market Development for African Endogenous Products. Journal of Macromarketing .

Dawes, J. (2018). The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems. SSRN .

E.Quezada, L., A.Reinao, E., & I.Palominos, P. (2019). Measuring Performance Using SWOT Analysis and Balanced Scorecard. Procedia Manufacturing, 786-793.

Fabbri, D., & F.Klapper, L. (2016). Bargaining power and trade credit. Journal of Corporate Finance, 66-80.

Fan, S., Y.K.Lau, R., & Zhao, J. L. (2015). Demystifying Big Data Analytics for Business Intelligence Through the Lens of Marketing Mix. Big Data Research, 28-32.

H. Th. Bruijl, G. (2018). The Relevance of Porter's Five Forces in Today's Innovative and Changing Business Environment. SSRN .

Halmaghi, E. E., Iancue, D., & Băcilă, M. L. (2017). The Organization's Internal Environment and Its Importance in the Organization's Development. International Conference Knowledge Based Organization , 378 - 381.

Hasan, M. M., Nekmahmud, M., & Yajuan, L. (2019). Green business value chain: a systematic review. Sustainable Production and Consumption, 326-339.

Hilman, H., Bohari, A. M., & Abdullah, S. S. (2018). The mediating effect of cost leadership on the relationship between market penetration, market development, and firm performance. Journal of Business and Retail Management Research.

Hueske, A. K., Endrikat, J., & Guenther, E. (2015). External environment, the innovating organization, and its individuals: A multilevel model for identifying innovation barriers accounting for social uncertainties. Journal of Engineering and Technology Management, 45-70.

Indris, S., & Primiana, I. (2015). Internal And External Environment Analysis On The Performance Of Small And Medium Industries (Smes) In Indonesia. International Journal of Scientific & Technology Research .

Išoraitė, M. (2016). Marketing Mix Theoretical Aspects . International Journal of Research-Granthaalayah.

J. K, N., W. J, O., & D., K. (2016). Does External Environment Influence Organizational Performance? The Case of Kenyan State Corporations. Management and Organizational Studies.

Kalogiannidis, S., & Mavratzas, S. (2020). Impact of marketing mix strategies effective product development issues in MNCs/Retail . International Journal of Business Marketing and Management , 118-125.

Kolbina, O. (2015). SWOT Analysis as a Strategic Planning Tool for Companies in the Food Industry. Problems of Economic Transition, 74-83 .

Linkov, I., Carluccio, S., Pritchard, O., & Bhreasail, Á. N. (2020). The case for value chain resilience. Management Research Review.

Maheswari, H., Yudoko, G., & Adhiutama, A. (2019). Government and Intermediary Business Engagement for Controlling Electronic Waste in Indonesia: A Sustainable Reverse Logistics Theory through Customer Value Chain Analysis. Sustainability.

Miethlich, B., & G. Oldenburg, A. (2019). The Employment of Persons with Disabilities as a Strategic Asset: A Resource-Based-View using the Value-Rarity-Imitability-Organization(VRIO) Framework . Journal of Eastern Europe Research in Business and Economics.

Mintz, O., J.Gilbride, T., & Lenk, P. (2021). The right metrics for marketing-mix decisions. International Journal of Research in Marketing , 32-49.

Munro, M. M. (2017). Analyzing external environment factors affecting social enterprise development. Social Enterprise Journal, 38-52.

Phadermrod, B., M.Crowder, R., & B.Wills, G. (2019). Importance-Performance Analysis based SWOT analysis. International Journal of Information Management, 194-203.

Pogorelova, E., Yakhneeva, I., & Agafonova, A. (2016). Marketing Mix for E-Commerce. International Journal of Enviornmental & Science Education .

Radpour, S., Mondal, M. A., & Kumar, A. (2017). Market penetration modeling of high energy efficiency appliances in the residential sector. Energy, 951-961.

Rizaldi, A. (2015). Control Environment Analysis at Government Internal Control System: Indonesia Case. Procedia - Social and Behavioral Sciences, 844-850.

S. Samusenko, A., S. Plaskova, N., & A. Prodanova, N. (2020). The Analysis of the External Environment to Determine the Practical Focus of Applied Research and Development in the Framework of Innovation. Complex Systems: Innovation and Sustainability in the Digital Age , 245–255.

Seema, S. (2016). Porter's Model: A Critical Examination . International Journal of Engineering and Management Research .

Thabit, T., & Raewf, M. (2018). The Evaluation of Marketing Mix Elements: A Case Study. International Journal of Social Sciences & Educational Studies.

Wang, L., Wang, Y., & Shi, L. (2022). Analysis of risky driving behaviors among bus drivers in China: The role of enterprise management, external environment and attitudes towards traffic safety. Accident Analysis & Prevention.

Zhao, Z. Y., Zuo, J., & Wu, P. H. (2016). Competitiveness assessment of the biomass power generation industry in China: A five forces model study. Renewable Energy, 144-153.