When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.The new Senior Vice President of Marketing for The Fashion Channel (TFC), a cable television network dedicated to round-the-clock, fashion-oriented programming, is preparing to recommend a change in the company's traditional marketing approach by introducing a market segmentation program. This program is, in part, a response to the intensifying competitive environment for TFC, and it needs to strengthen the company's brand and positioning with viewers and advertisers. At the same time, the program must maintain consumer and distributor satisfaction with the network. Several segmentation options are being considered, each with pros and cons. Consumer research provides insights but does not give a simple answer regarding the best path to take. The reader must evaluate the research results, calculate financial scenarios, and make a recommendation. Also looks at change management issues. TFC has never done a program like this before, and the Senior Vice President of Marketing is new to the job. In addition to making a recommendation, she must manage the change process to insure that the organization and her leadership team peers are fully aligned.
Swot Analysis of "The Fashion Channel" written by Wendy Stahl includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tfc Fashion facing as an external strategic factors. Some of the topics covered in The Fashion Channel case study are - Strategic Management Strategies, Change management, Market research and Sales & Marketing.
Some of the macro environment factors that can be used to understand the The Fashion Channel casestudy better are - – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of The Fashion Channel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Fashion Channel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tfc Fashion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tfc Fashion 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 The Fashion Channel can be done for the following purposes –
1. Strategic planning using facts provided in The Fashion Channel case study
2. Improving business portfolio management of Tfc Fashion
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tfc Fashion
Strengths The Fashion Channel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tfc Fashion in The Fashion Channel Harvard Business Review case study are -
Ability to recruit top talent
– Tfc Fashion is one of the leading recruiters in the industry. Managers in the The Fashion Channel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Tfc Fashion in the sector have low bargaining power. The Fashion Channel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tfc Fashion to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Tfc Fashion is present in almost all the verticals within the industry. This has provided firm in The Fashion Channel 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 lead change in Sales & Marketing field
– Tfc Fashion is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tfc Fashion in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Tfc Fashion 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 The Fashion Channel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Tfc Fashion 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 The Fashion Channel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Tfc Fashion has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Sales & Marketing industry
– The Fashion Channel firm has clearly differentiated products in the market place. This has enabled Tfc Fashion to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Tfc Fashion to invest into research and development (R&D) and innovation.
Training and development
– Tfc Fashion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Fashion Channel Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Tfc Fashion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tfc Fashion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Tfc Fashion in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Tfc Fashion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tfc Fashion 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.
Weaknesses The Fashion Channel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Fashion Channel are -
Skills based hiring
– The stress on hiring functional specialists at Tfc Fashion has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Fashion Channel, is just above the industry average. Tfc Fashion 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Fashion Channel, in the dynamic environment Tfc Fashion has struggled to respond to the nimble upstart competition. Tfc Fashion has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As The Fashion Channel HBR case study mentions - Tfc Fashion 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Fashion Channel 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 Tfc Fashion 's lucrative customers.
Lack of clear differentiation of Tfc Fashion products
– To increase the profitability and margins on the products, Tfc Fashion needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Tfc Fashion has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study The Fashion Channel, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Tfc Fashion 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.
Capital Spending Reduction
– Even during the low interest decade, Tfc Fashion has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Tfc Fashion, firm in the HBR case study The Fashion Channel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities The Fashion Channel | 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 The Fashion Channel are -
Using analytics as competitive advantage
– Tfc Fashion 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 The Fashion Channel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tfc Fashion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Tfc Fashion 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 Sales & Marketing segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tfc Fashion to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tfc Fashion to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Tfc Fashion can develop new processes and procedures in Sales & Marketing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tfc Fashion 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tfc Fashion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Tfc Fashion 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tfc Fashion is facing challenges because of the dominance of functional experts in the organization. The Fashion Channel 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tfc Fashion can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Fashion Channel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tfc Fashion can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Tfc Fashion can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Tfc Fashion has opened avenues for new revenue streams for the organization in the industry. This can help Tfc Fashion to build a more holistic ecosystem as suggested in the The Fashion Channel case study. Tfc Fashion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Tfc Fashion to increase its market reach. Tfc Fashion 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.
Manufacturing automation
– Tfc Fashion can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats The Fashion Channel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Fashion Channel are -
Stagnating economy with rate increase
– Tfc Fashion 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.
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. Tfc Fashion 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 Tfc Fashion in the Sales & Marketing sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tfc Fashion business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Tfc Fashion.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tfc Fashion needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tfc Fashion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tfc Fashion in the Sales & Marketing industry. The Sales & Marketing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Fashion Channel, Tfc Fashion may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Environmental challenges
– Tfc Fashion 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. Tfc Fashion can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Consumer confidence and its impact on Tfc Fashion 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tfc Fashion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Tfc Fashion is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of The Fashion Channel 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 The Fashion Channel 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 The Fashion Channel 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 The Fashion Channel 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 The Fashion Channel 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 Tfc Fashion needs to make to build a sustainable competitive advantage.