EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems
EU Design is an increasingly important trim supplier for various companies in the apparel and fashion industry in both New York and Hong Kong. Since its establishment in 1999, the company has grown gradually, attracting more customers and employing more staff. By 2009, however, further growth has been obstructed by an informal management style, an inappropriate organizational structure and a simple incentive system that is suitable only for a small company. The situation has been worsened by the global financial crisis. With falling margins, there is a need for expanding the customer base and for staff to become more sales-oriented. With limited funds, EU Design's owner needs to decide how to transform the company and which management control systems to implement first.
Swot Analysis of "EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems" written by Neale O'Connor, Edo de Vries Robbe includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Design's Eu facing as an external strategic factors. Some of the topics covered in EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems case study are - Strategic Management Strategies, Corporate governance, Leadership, Motivating people, Supply chain and Organizational Development.
Some of the macro environment factors that can be used to understand the EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems casestudy better are - – increasing commodity prices, technology disruption, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Design's Eu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Design's Eu 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems can be done for the following purposes –
1. Strategic planning using facts provided in EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems case study
2. Improving business portfolio management of Design's Eu
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Design's Eu
Strengths EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Design's Eu in EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems Harvard Business Review case study are -
Organizational Resilience of Design's Eu
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Design's Eu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Design's Eu is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Design's Eu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Design's Eu has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Design's Eu digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Design's Eu 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.
Superior customer experience
– The customer experience strategy of Design's Eu in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Design's Eu is present in almost all the verticals within the industry. This has provided firm in EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Design's Eu is one of the leading recruiters in the industry. Managers in the EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Design's Eu 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Design's Eu has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Organizational Development industry
– EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems firm has clearly differentiated products in the market place. This has enabled Design's Eu to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Design's Eu to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Design's Eu in the sector have low bargaining power. EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Design's Eu to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems are -
High cash cycle compare to competitors
Design's Eu has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Design's Eu has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Design's Eu is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Design's Eu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Design's Eu to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems, in the dynamic environment Design's Eu has struggled to respond to the nimble upstart competition. Design's Eu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Design's Eu is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Design's Eu has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems, it seems that the employees of Design's Eu don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, firm in the HBR case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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 Design's Eu 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Design's Eu 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. Design's Eu 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems, is just above the industry average. Design's Eu 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.
Slow to strategic competitive environment developments
– As EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems HBR case study mentions - Design's Eu takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems | 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Design's Eu can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Design's Eu to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Design's Eu in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Design's Eu has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Design's Eu to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Design's Eu is facing challenges because of the dominance of functional experts in the organization. EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Design's Eu has opened avenues for new revenue streams for the organization in the industry. This can help Design's Eu to build a more holistic ecosystem as suggested in the EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems case study. Design's Eu can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Design's Eu 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.
Loyalty marketing
– Design's Eu has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Design's Eu in the consumer business. Now Design's Eu can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Design's Eu can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Design's Eu can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Better consumer reach
– The expansion of the 5G network will help Design's Eu to increase its market reach. Design's Eu 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.
Developing new processes and practices
– Design's Eu can develop new processes and procedures in Organizational Development 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.
Threats EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems are -
High dependence on third party suppliers
– Design's Eu 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.
Consumer confidence and its impact on Design's Eu 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.
Increasing wage structure of Design's Eu
– 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 Design's Eu.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems, Design's Eu may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Stagnating economy with rate increase
– Design's Eu can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Design's Eu can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems .
Environmental challenges
– Design's Eu 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. Design's Eu can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Regulatory challenges
– Design's Eu needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Technology acceleration in Forth Industrial Revolution
– Design's Eu has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Design's Eu needs to keep up with the evolution of technology in the Organizational Development 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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Design's Eu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Design's Eu 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.
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 Design's Eu in the Organizational Development sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Design's Eu in the Organizational Development industry. The Organizational Development 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.
Weighted SWOT Analysis of EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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 EU Design's Rise in the Apparel and Fashion Industry: Formalizing Management and Incentive Systems 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 Design's Eu needs to make to build a sustainable competitive advantage.
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