Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
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.
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 - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google,
technology disruption, talent flight as more people leaving formal jobs, etc
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.
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
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 -
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.
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.
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.
Superior customer experience
– The customer experience strategy of Diesel Diesel's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Innovation driven organization
– Diesel Diesel's is one of the most innovative firm in sector. Manager in Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 Diesel Diesel's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Diesel Diesel's 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.
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.
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.
Organizational Resilience of Diesel Diesel's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Diesel Diesel's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
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.
Skills based hiring
– The stress on hiring functional specialists at Diesel Diesel's 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, in the dynamic environment Diesel Diesel's has struggled to respond to the nimble upstart competition. Diesel Diesel's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Diesel Diesel's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, it seems that the employees of Diesel Diesel's 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.
No frontier risks strategy
– After analyzing the HBR case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry, 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Diesel Diesel's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry 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 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.
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 -
Developing new processes and practices
– Diesel Diesel's 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.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Diesel Diesel's has opened avenues for new revenue streams for the organization in the industry. This can help Diesel Diesel's to build a more holistic ecosystem as suggested in the Diesel for Successful Living: Branding Strategies for an Up-market Line Extension in the Fashion Industry case study. Diesel Diesel's can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Diesel Diesel's 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.
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 Diesel Diesel's 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.
Building a culture of innovation
– managers at Diesel Diesel's 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.
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.
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 -
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 .
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.
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.
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 Diesel Diesel's.
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.
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.
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.
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.
Increasing wage structure of Diesel Diesel's
– 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 Diesel Diesel's.
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.
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.
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.
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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