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 - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, geopolitical disruptions, 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 -
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.
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Venezuelan Cosmeticos digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Venezuelan Cosmeticos 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.
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.
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.
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.
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.
Innovation driven organization
– Venezuelan Cosmeticos is one of the most innovative firm in sector. Manager in Cosmeticos de Espana, S.A. (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Sustainable margins compare to other players in Finance & Accounting industry
– Cosmeticos de Espana, S.A. (A) firm has clearly differentiated products in the market place. This has enabled Venezuelan Cosmeticos to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Venezuelan Cosmeticos to invest into research and development (R&D) and innovation.
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.
Effective Research and Development (R&D)
– Venezuelan Cosmeticos 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 Cosmeticos de Espana, S.A. (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
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.
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.
Aligning sales with marketing
– It come across in the case study Cosmeticos de Espana, S.A. (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cosmeticos de Espana, S.A. (A) can leverage the sales team experience to cultivate customer relationships as Venezuelan Cosmeticos is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Venezuelan Cosmeticos 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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Venezuelan Cosmeticos 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. Venezuelan Cosmeticos 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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Venezuelan Cosmeticos is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cosmeticos de Espana, S.A. (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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.
Leveraging digital technologies
– Venezuelan Cosmeticos 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.
Learning at scale
– Online learning technologies has now opened space for Venezuelan Cosmeticos 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.
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.
Loyalty marketing
– Venezuelan Cosmeticos 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.
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.
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. Venezuelan Cosmeticos can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Manufacturing automation
– Venezuelan Cosmeticos can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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.
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 -
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.
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. Venezuelan Cosmeticos 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.
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.
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) .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Venezuelan Cosmeticos in the Finance & Accounting industry. The Finance & Accounting 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.
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. Venezuelan Cosmeticos needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
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 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.
High dependence on third party suppliers
– Venezuelan Cosmeticos 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 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 .
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.
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.
