Case Study Description of Vanity Fair Mills: Market Response System
Describes the "Quick Response" program developed by Vanity Fair Mills (VFM), a division of the VF Corp. Beginning in 1989, VFM reorganized its manufacturing systems, invested heavily in computer and telecommunications equipment, and formed "partnership" agreements with major retailers. These changes were designed to improve inventory turnover, reduce markdowns, and cut down on operating expenses in the distribution of intimate apparel. The improved efficiency of the distribution channel would, it was believed, yield benefits for VFM and its retail customers. In early 1993 VFM management reviewed their progress to date in implementing Quick Response.
Swot Analysis of "Vanity Fair Mills: Market Response System" written by Robert D. Buzzell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vfm Vanity facing as an external strategic factors. Some of the topics covered in Vanity Fair Mills: Market Response System case study are - Strategic Management Strategies, Marketing, Operations management, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Vanity Fair Mills: Market Response System casestudy better are - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing household debt because of falling income levels,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Vanity Fair Mills: Market Response System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Vanity Fair Mills: Market Response System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vfm Vanity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vfm Vanity 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 Vanity Fair Mills: Market Response System can be done for the following purposes –
1. Strategic planning using facts provided in Vanity Fair Mills: Market Response System case study
2. Improving business portfolio management of Vfm Vanity
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 Vfm Vanity
Strengths Vanity Fair Mills: Market Response System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vfm Vanity in Vanity Fair Mills: Market Response System Harvard Business Review case study are -
High brand equity
– Vfm Vanity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vfm Vanity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Sales & Marketing industry
– Vanity Fair Mills: Market Response System firm has clearly differentiated products in the market place. This has enabled Vfm Vanity to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Vfm Vanity to invest into research and development (R&D) and innovation.
Strong track record of project management
– Vfm Vanity is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Vfm Vanity is one of the most innovative firm in sector. Manager in Vanity Fair Mills: Market Response System Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Vfm Vanity digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vfm Vanity 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.
Analytics focus
– Vfm Vanity 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 Robert D. Buzzell 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.
Successful track record of launching new products
– Vfm Vanity has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vfm Vanity 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.
Training and development
– Vfm Vanity has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Vanity Fair Mills: Market Response System 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
– Vfm Vanity is one of the leading recruiters in the industry. Managers in the Vanity Fair Mills: Market Response System 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 Vfm Vanity in the sector have low bargaining power. Vanity Fair Mills: Market Response System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vfm Vanity to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Vfm Vanity 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 Vfm Vanity is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Vanity Fair Mills: Market Response System Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Vfm Vanity 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 Vanity Fair Mills: Market Response System HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Vanity Fair Mills: Market Response System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vanity Fair Mills: Market Response System are -
Slow to strategic competitive environment developments
– As Vanity Fair Mills: Market Response System HBR case study mentions - Vfm Vanity 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Vfm Vanity supply chain. Even after few cautionary changes mentioned in the HBR case study - Vanity Fair Mills: Market Response System, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vfm Vanity vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Vfm Vanity 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.
Low market penetration in new markets
– Outside its home market of Vfm Vanity, firm in the HBR case study Vanity Fair Mills: Market Response System needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Vfm Vanity 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vfm Vanity is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Vanity Fair Mills: Market Response System 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 Vanity Fair Mills: Market Response System 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 Vfm Vanity has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Vfm Vanity 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Vanity Fair Mills: Market Response System, is just above the industry average. Vfm Vanity 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Vanity Fair Mills: Market Response System 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 Vfm Vanity 's lucrative customers.
Need for greater diversity
– Vfm Vanity 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.
Opportunities Vanity Fair Mills: Market Response System | 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 Vanity Fair Mills: Market Response System are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Vfm Vanity 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.
Loyalty marketing
– Vfm Vanity 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, Vfm Vanity is facing challenges because of the dominance of functional experts in the organization. Vanity Fair Mills: Market Response System 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, Vfm Vanity 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, Vanity Fair Mills: Market Response System, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Vfm Vanity in the consumer business. Now Vfm Vanity can target international markets with far fewer capital restrictions requirements than the existing system.
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. Vfm Vanity can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vfm Vanity can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Vfm Vanity to increase its market reach. Vfm Vanity 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.
Building a culture of innovation
– managers at Vfm Vanity 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.
Creating value in data economy
– The success of analytics program of Vfm Vanity has opened avenues for new revenue streams for the organization in the industry. This can help Vfm Vanity to build a more holistic ecosystem as suggested in the Vanity Fair Mills: Market Response System case study. Vfm Vanity can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Vfm Vanity 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.
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. Vfm Vanity 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. Vfm Vanity 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vfm Vanity can use these opportunities to build new business models that can help the communities that Vfm Vanity operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Vanity Fair Mills: Market Response System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Vanity Fair Mills: Market Response System are -
Environmental challenges
– Vfm Vanity 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. Vfm Vanity can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Technology acceleration in Forth Industrial Revolution
– Vfm Vanity has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Vfm Vanity 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.
Consumer confidence and its impact on Vfm Vanity 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vfm Vanity with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Vfm Vanity.
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. Vfm Vanity needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Vfm Vanity is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Vfm Vanity 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.
High dependence on third party suppliers
– Vfm Vanity 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Vanity Fair Mills: Market Response System, Vfm Vanity 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 .
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 Vfm Vanity business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Vanity Fair Mills: Market Response System 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 Vanity Fair Mills: Market Response System 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 Vanity Fair Mills: Market Response System 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 Vanity Fair Mills: Market Response System 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 Vanity Fair Mills: Market Response System 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 Vfm Vanity needs to make to build a sustainable competitive advantage.