Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa
An MBA graduate is asked by the CEO to look at Clarks' strategy in Africa. To achieve growth on a large scale makes entering new countries inevitable. The case describes the firm, attempts by various other shoemakers to enter the market, and the MBA's effort to frame the challenge.
Swot Analysis of "Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa" written by Philip Parker, Yvan van Dam includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Clarks Shoemakers facing as an external strategic factors. Some of the topics covered in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa case study are - Strategic Management Strategies, Sales, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clarks Shoemakers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clarks Shoemakers 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa can be done for the following purposes –
1. Strategic planning using facts provided in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa case study
2. Improving business portfolio management of Clarks Shoemakers
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Clarks Shoemakers
Strengths Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clarks Shoemakers in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Clarks Shoemakers in the sector have low bargaining power. Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Clarks Shoemakers to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Clarks Shoemakers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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.
Operational resilience
– The operational resilience strategy in the Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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.
Strong track record of project management
– Clarks Shoemakers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Clarks Shoemakers 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 Clarks Shoemakers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Clarks Shoemakers 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Clarks Shoemakers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Clarks Shoemakers 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.
Diverse revenue streams
– Clarks Shoemakers is present in almost all the verticals within the industry. This has provided firm in Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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.
Ability to recruit top talent
– Clarks Shoemakers is one of the leading recruiters in the industry. Managers in the Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa firm has clearly differentiated products in the market place. This has enabled Clarks Shoemakers to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Clarks Shoemakers to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Clarks Shoemakers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Clarks Shoemakers has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa, in the dynamic environment Clarks Shoemakers has struggled to respond to the nimble upstart competition. Clarks Shoemakers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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 Clarks Shoemakers products
– To increase the profitability and margins on the products, Clarks Shoemakers needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa, is just above the industry average. Clarks Shoemakers 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Clarks Shoemakers has relatively successful track record of launching new products.
High cash cycle compare to competitors
Clarks Shoemakers has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa HBR case study mentions - Clarks Shoemakers 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Clarks Shoemakers 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.
Capital Spending Reduction
– Even during the low interest decade, Clarks Shoemakers 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa, it seems that the employees of Clarks Shoemakers 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.
Aligning sales with marketing
– It come across in the case study Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa can leverage the sales team experience to cultivate customer relationships as Clarks Shoemakers is planning to shift buying processes online.
Opportunities Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa | 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Clarks Shoemakers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Clarks Shoemakers 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.
Using analytics as competitive advantage
– Clarks Shoemakers 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Clarks Shoemakers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Clarks Shoemakers can develop new processes and procedures in Strategy & Execution 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.
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. Clarks Shoemakers 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, Clarks Shoemakers 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, Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Clarks Shoemakers 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.
Manufacturing automation
– Clarks Shoemakers can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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, Clarks Shoemakers is facing challenges because of the dominance of functional experts in the organization. Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Clarks Shoemakers can use these opportunities to build new business models that can help the communities that Clarks Shoemakers operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Clarks Shoemakers 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.
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 Clarks Shoemakers in the consumer business. Now Clarks Shoemakers can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Clarks Shoemakers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa are -
Shortening product life cycle
– it is one of the major threat that Clarks Shoemakers is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Clarks Shoemakers 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. Clarks Shoemakers can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Clarks Shoemakers 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Clarks Shoemakers business can come under increasing regulations regarding data privacy, data security, 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Clarks Shoemakers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Clarks Shoemakers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clarks Shoemakers in the Strategy & Execution industry. The Strategy & Execution 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.
Increasing wage structure of Clarks Shoemakers
– 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 Clarks Shoemakers.
Consumer confidence and its impact on Clarks Shoemakers 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 Clarks Shoemakers in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Clarks Shoemakers 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Shoe Manufacturer Stepping into High-Pace Markets: Bottom of the Pyramid Strategy for Clarks in Africa 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 Clarks Shoemakers needs to make to build a sustainable competitive advantage.
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