Swot Analysis of "Cosmeticos de Espana, S.A. (A)" written by David F. Hawkins includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Venezuelan Cosmeticos facing as an external strategic factors. Some of the topics covered in Cosmeticos de Espana, S.A. (A) case study are - Strategic Management Strategies, Currency, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Cosmeticos de Espana, S.A. (A) casestudy better are - – increasing commodity prices, increasing household debt because of falling income levels, increasing transportation and logistics costs, wage bills are increasing, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Cosmeticos de Espana, S.A. (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cosmeticos de Espana, S.A. (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Venezuelan Cosmeticos, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Venezuelan Cosmeticos 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 Cosmeticos de Espana, S.A. (A) can be done for the following purposes –
1. Strategic planning using facts provided in Cosmeticos de Espana, S.A. (A) case study
2. Improving business portfolio management of Venezuelan Cosmeticos
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Venezuelan Cosmeticos
Strengths Cosmeticos de Espana, S.A. (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Venezuelan Cosmeticos in Cosmeticos de Espana, S.A. (A) Harvard Business Review case study are -
Training and development
– Venezuelan Cosmeticos has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cosmeticos de Espana, S.A. (A) 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.
Low bargaining power of suppliers
– Suppliers of Venezuelan Cosmeticos in the sector have low bargaining power. Cosmeticos de Espana, S.A. (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Venezuelan Cosmeticos to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Venezuelan Cosmeticos 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 Cosmeticos de Espana, S.A. (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Venezuelan Cosmeticos 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.
High brand equity
– Venezuelan Cosmeticos has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Venezuelan Cosmeticos to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Venezuelan Cosmeticos 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 Venezuelan Cosmeticos is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cosmeticos de Espana, S.A. (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Venezuelan Cosmeticos 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 David F. Hawkins 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.
Strong track record of project management
– Venezuelan Cosmeticos is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Venezuelan Cosmeticos
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Venezuelan Cosmeticos does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Venezuelan Cosmeticos is present in almost all the verticals within the industry. This has provided firm in Cosmeticos de Espana, S.A. (A) 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 Cosmeticos de Espana, S.A. (A) 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.
Ability to lead change in Finance & Accounting field
– Venezuelan Cosmeticos is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Venezuelan Cosmeticos in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Cosmeticos de Espana, S.A. (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cosmeticos de Espana, S.A. (A) are -
Interest costs
– Compare to the competition, Venezuelan Cosmeticos 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.
Lack of clear differentiation of Venezuelan Cosmeticos products
– To increase the profitability and margins on the products, Venezuelan Cosmeticos needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Venezuelan Cosmeticos 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Cosmeticos de Espana, S.A. (A) 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 Venezuelan Cosmeticos 's lucrative customers.
Need for greater diversity
– Venezuelan Cosmeticos 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.
Capital Spending Reduction
– Even during the low interest decade, Venezuelan Cosmeticos 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cosmeticos de Espana, S.A. (A), it seems that the employees of Venezuelan Cosmeticos 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Venezuelan Cosmeticos 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.
High bargaining power of channel partners
– Because of the regulatory requirements, David F. Hawkins suggests that, Venezuelan Cosmeticos 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.
Low market penetration in new markets
– Outside its home market of Venezuelan Cosmeticos, firm in the HBR case study Cosmeticos de Espana, S.A. (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Venezuelan Cosmeticos 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 - Cosmeticos de Espana, S.A. (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Cosmeticos de Espana, S.A. (A) | 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 Cosmeticos de Espana, S.A. (A) are -
Creating value in data economy
– The success of analytics program of Venezuelan Cosmeticos has opened avenues for new revenue streams for the organization in the industry. This can help Venezuelan Cosmeticos to build a more holistic ecosystem as suggested in the Cosmeticos de Espana, S.A. (A) case study. Venezuelan Cosmeticos can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Venezuelan Cosmeticos can develop new processes and procedures in Finance & Accounting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Venezuelan Cosmeticos 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 Venezuelan Cosmeticos to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Venezuelan Cosmeticos to increase its market reach. Venezuelan Cosmeticos 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Venezuelan Cosmeticos 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 Venezuelan Cosmeticos can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Venezuelan Cosmeticos in the consumer business. Now Venezuelan Cosmeticos can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Venezuelan Cosmeticos 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 Finance & Accounting segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Venezuelan Cosmeticos is facing challenges because of the dominance of functional experts in the organization. Cosmeticos de Espana, S.A. (A) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Venezuelan Cosmeticos in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Venezuelan Cosmeticos 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
– Venezuelan Cosmeticos can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cosmeticos de Espana, S.A. (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Venezuelan Cosmeticos 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, Cosmeticos de Espana, S.A. (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Cosmeticos de Espana, S.A. (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cosmeticos de Espana, S.A. (A) are -
Stagnating economy with rate increase
– Venezuelan Cosmeticos 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cosmeticos de Espana, S.A. (A), Venezuelan Cosmeticos may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Consumer confidence and its impact on Venezuelan Cosmeticos 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.
Technology acceleration in Forth Industrial Revolution
– Venezuelan Cosmeticos has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Venezuelan Cosmeticos needs to keep up with the evolution of technology in the Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Venezuelan Cosmeticos with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Venezuelan Cosmeticos can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Cosmeticos de Espana, S.A. (A) .
Shortening product life cycle
– it is one of the major threat that Venezuelan Cosmeticos is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Venezuelan Cosmeticos 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. Venezuelan Cosmeticos can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Venezuelan Cosmeticos can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Venezuelan Cosmeticos in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Venezuelan Cosmeticos
– 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 Venezuelan Cosmeticos.
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 Venezuelan Cosmeticos.
Weighted SWOT Analysis of Cosmeticos de Espana, S.A. (A) 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 Cosmeticos de Espana, S.A. (A) 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 Cosmeticos de Espana, S.A. (A) 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 Cosmeticos de Espana, S.A. (A) 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 Cosmeticos de Espana, S.A. (A) 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 Venezuelan Cosmeticos needs to make to build a sustainable competitive advantage.