Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry

Renzo Rosso, the president and founder of Diesel SpA, the innovative Italian casual wear company famous for its controversial 'For Successful Living' advertising campaign, is pondering how to brand its new upscale line of clothing: StyleLab. The objectives set for StyleLab are: (1) to enter the new and attractive high casual wear market; (2) to create an aura of prestige for the core D-Diesel line; and (3) to provide Diesel's designers with the opportunity to experiment with new cuts and fabrics, which may eventually trickle down to the main D-Diesel brand. Please visit the http://cases.insead.edu/diesel/ (copy and paste the url into a browser) to access Diesel's television commercials and PowerPoint presentations of all case exhibits and print advertising campaigns.

Authors :: Vadim Grigorian, Pierre Chandon

Topics :: Sales & Marketing

Tags :: , SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry" written by Vadim Grigorian, Pierre Chandon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Diesel Diesel's facing as an external strategic factors. Some of the topics covered in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry case study are - Strategic Management Strategies, and Sales & Marketing.

Some of the macro environment factors that can be used to understand the Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry casestudy better are - – increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , there is backlash against globalization, cloud computing is disrupting traditional business models, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Diesel Diesel's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Diesel Diesel's 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry can be done for the following purposes –
1. Strategic planning using facts provided in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry case study
2. Improving business portfolio management of Diesel Diesel's
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 Diesel Diesel's

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Strengths Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Diesel Diesel's in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry Harvard Business Review case study are -

Sustainable margins compare to other players in Sales & Marketing industry

– Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry firm has clearly differentiated products in the market place. This has enabled Diesel Diesel's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Diesel Diesel's to invest into research and development (R&D) and innovation.

Training and development

– Diesel Diesel's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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.

Analytics focus

– Diesel Diesel's 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 Vadim Grigorian, Pierre Chandon 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.

High switching costs

– The high switching costs that Diesel Diesel's 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.

Low bargaining power of suppliers

– Suppliers of Diesel Diesel's in the sector have low bargaining power. Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Diesel Diesel's to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Diesel Diesel's is one of the leading recruiters in the industry. Managers in the Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Diverse revenue streams

– Diesel Diesel's is present in almost all the verticals within the industry. This has provided firm in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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.

Operational resilience

– The operational resilience strategy in the Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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.

Cross disciplinary teams

– Horizontal connected teams at the Diesel Diesel's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Learning organization

- Diesel Diesel's 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 Diesel Diesel's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– Diesel Diesel's 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management

– Diesel Diesel's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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Weaknesses Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry are -

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, is just above the industry average. Diesel Diesel's 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel Diesel's 's lucrative customers.

High bargaining power of channel partners

– Because of the regulatory requirements, Vadim Grigorian, Pierre Chandon suggests that, Diesel Diesel's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

Increasing silos among functional specialists

– The organizational structure of Diesel Diesel's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Diesel Diesel's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Diesel Diesel's to focus more on services rather than just following the product oriented approach.

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 Diesel Diesel's supply chain. Even after few cautionary changes mentioned in the HBR case study - Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Diesel Diesel's vulnerable to further global disruptions in South East Asia.

Lack of clear differentiation of Diesel Diesel's products

– To increase the profitability and margins on the products, Diesel Diesel's needs to provide more differentiated products than what it is currently offering in the marketplace.

Workers concerns about automation

– As automation is fast increasing in the segment, Diesel Diesel's 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.

Slow to strategic competitive environment developments

– As Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry HBR case study mentions - Diesel Diesel's 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.

Capital Spending Reduction

– Even during the low interest decade, Diesel Diesel's 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.

Slow decision making process

– As mentioned earlier in the report, Diesel Diesel's 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. Diesel Diesel's 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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel Diesel's has relatively successful track record of launching new products.

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Opportunities Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry | 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry are -

Buying journey improvements

– Diesel Diesel's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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.

Using analytics as competitive advantage

– Diesel Diesel's 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Diesel Diesel's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Diesel Diesel's can use these opportunities to build new business models that can help the communities that Diesel Diesel's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.

Loyalty marketing

– Diesel Diesel's 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.

Learning at scale

– Online learning technologies has now opened space for Diesel Diesel's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Diesel Diesel's 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 Diesel Diesel's to hire the very best people irrespective of their geographical location.

Low interest rates

– Even though inflation is raising its head in most developed economies, Diesel Diesel's 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.

Manufacturing automation

– Diesel Diesel's 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Diesel Diesel's is facing challenges because of the dominance of functional experts in the organization. Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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. Diesel Diesel's can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Diesel Diesel's 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, Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, 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. Diesel Diesel's 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. Diesel Diesel's 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.

Leveraging digital technologies

– Diesel Diesel's 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.

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Threats Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Diesel Diesel's 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.

Stagnating economy with rate increase

– Diesel Diesel's 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.

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.

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 Diesel Diesel's in the Sales & Marketing sector and impact the bottomline of the organization.

Environmental challenges

– Diesel Diesel's 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. Diesel Diesel's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.

Regulatory challenges

– Diesel Diesel's 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.

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. Diesel Diesel's 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.

Consumer confidence and its impact on Diesel Diesel's 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, Diesel Diesel's 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 .

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. Diesel Diesel's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Diesel Diesel's 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.

Technology acceleration in Forth Industrial Revolution

– Diesel Diesel's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Diesel Diesel's 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.

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Weighted SWOT Analysis of Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel Diesel's needs to make to build a sustainable competitive advantage.

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