Kate Spade New York: Will Expansion Deepen or Dilute the Brand? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kate Spade New York: Will Expansion Deepen or Dilute the Brand?
In 2012 Kate Spade New York's executive management believed that KSNY's brand equity could be further leveraged to benefit from explosive growth in the global luxury accessories market. Tasked to provide input on how to achieve this goal, the marketing team considered both how to expand the demographics of their customer base and how to brand any new products designed to target these new customers. Based in part on the company's own market research and interviews with President and Chief Marketing Officer Mary Beech, this case asks students to consider the course of action that would allow KSNY to preserve its established brand identity while continuing to grow sales among its loyal customer base.
Swot Analysis of "Kate Spade New York: Will Expansion Deepen or Dilute the Brand?" written by Eva Ascarza, Keith Wilcox includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spade Kate facing as an external strategic factors. Some of the topics covered in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Kate Spade New York: Will Expansion Deepen or Dilute the Brand? casestudy better are - – increasing energy prices, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs,
technology disruption, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Kate Spade New York: Will Expansion Deepen or Dilute the Brand?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spade Kate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spade Kate 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? can be done for the following purposes –
1. Strategic planning using facts provided in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? case study
2. Improving business portfolio management of Spade Kate
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 Spade Kate
Strengths Kate Spade New York: Will Expansion Deepen or Dilute the Brand? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spade Kate in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Spade Kate in the sector have low bargaining power. Kate Spade New York: Will Expansion Deepen or Dilute the Brand? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spade Kate to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Spade Kate is present in almost all the verticals within the industry. This has provided firm in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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.
High brand equity
– Spade Kate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spade Kate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Spade Kate has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spade Kate 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.
Effective Research and Development (R&D)
– Spade Kate 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Spade Kate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spade Kate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Spade Kate is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Eva Ascarza, Keith Wilcox can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Spade Kate has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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.
Ability to recruit top talent
– Spade Kate is one of the leading recruiters in the industry. Managers in the Kate Spade New York: Will Expansion Deepen or Dilute the Brand? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Spade Kate is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Spade Kate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kate Spade New York: Will Expansion Deepen or Dilute the Brand? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Spade Kate 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Spade Kate digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Spade Kate 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.
Weaknesses Kate Spade New York: Will Expansion Deepen or Dilute the Brand? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kate Spade New York: Will Expansion Deepen or Dilute the Brand? are -
Products dominated business model
– Even though Spade Kate has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Kate Spade New York: Will Expansion Deepen or Dilute the Brand? should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kate Spade New York: Will Expansion Deepen or Dilute the Brand?, is just above the industry average. Spade Kate 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Spade Kate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kate Spade New York: Will Expansion Deepen or Dilute the Brand? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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 Spade Kate has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Spade Kate needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kate Spade New York: Will Expansion Deepen or Dilute the Brand?, it seems that the employees of Spade Kate 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 cash cycle compare to competitors
Spade Kate 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.
Aligning sales with marketing
– It come across in the case study Kate Spade New York: Will Expansion Deepen or Dilute the Brand? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Kate Spade New York: Will Expansion Deepen or Dilute the Brand? can leverage the sales team experience to cultivate customer relationships as Spade Kate is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Kate Spade New York: Will Expansion Deepen or Dilute the Brand?, 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.
Need for greater diversity
– Spade Kate 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.
Increasing silos among functional specialists
– The organizational structure of Spade Kate is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Spade Kate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spade Kate to focus more on services rather than just following the product oriented approach.
Opportunities Kate Spade New York: Will Expansion Deepen or Dilute the Brand? | 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? are -
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 Spade Kate in the consumer business. Now Spade Kate can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spade Kate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spade Kate 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 Spade Kate to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Spade Kate 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Spade Kate to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Spade Kate 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.
Buying journey improvements
– Spade Kate can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kate Spade New York: Will Expansion Deepen or Dilute the Brand? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Spade Kate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Spade Kate in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Spade Kate 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.
Manufacturing automation
– Spade Kate 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.
Loyalty marketing
– Spade Kate 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Spade Kate is facing challenges because of the dominance of functional experts in the organization. Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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.
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. Spade Kate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Kate Spade New York: Will Expansion Deepen or Dilute the Brand? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kate Spade New York: Will Expansion Deepen or Dilute the Brand? are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Spade Kate 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 Sales & Marketing industry regulations.
Technology acceleration in Forth Industrial Revolution
– Spade Kate has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Spade Kate needs to keep up with the evolution of technology in the Sales & Marketing 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.
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 Spade Kate.
Increasing wage structure of Spade Kate
– 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 Spade Kate.
Stagnating economy with rate increase
– Spade Kate 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.
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 Spade Kate business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Spade Kate 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.
Shortening product life cycle
– it is one of the major threat that Spade Kate is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Spade Kate 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.
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. Spade Kate needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Spade Kate 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.
Weighted SWOT Analysis of Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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 Kate Spade New York: Will Expansion Deepen or Dilute the Brand? 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 Spade Kate needs to make to build a sustainable competitive advantage.
