Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru
A young Peruvian MBA graduate, who previously had worked in international marketing firms, founded an online fashion store and has been selling North American fashion products through Facebook, personal sales events and pop-up stores. The business has been growing profitably with an increasing customer base, overcoming initial supply side issues. Three years after the launch, however, the personal approach to satisfy each customer, a stronghold of the founder's business philosophy, is making expansion difficult. The business has grown to a point where it is barely manageable personally. Is expansion the right decision and if so, which type? Can the fashion store founder scale the business and still enjoy the lifestyle benefits of independence and flexible working hours? Matthias A. Tietz is affiliated with IE Business School. Susan CalderA?n Urbina is affiliated with IE Business School.
Swot Analysis of "Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru" written by Matthias Tietz, Susan Calderon Urbina includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fashion Facebook facing as an external strategic factors. Some of the topics covered in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru case study are - Strategic Management Strategies, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru casestudy better are - – wage bills are increasing, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fashion Facebook, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fashion Facebook 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru can be done for the following purposes –
1. Strategic planning using facts provided in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru case study
2. Improving business portfolio management of Fashion Facebook
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 Fashion Facebook
Strengths Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fashion Facebook in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru Harvard Business Review case study are -
Innovation driven organization
– Fashion Facebook is one of the most innovative firm in sector. Manager in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Fashion Facebook in the sector have low bargaining power. Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fashion Facebook to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Fashion Facebook has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fashion Facebook 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.
Training and development
– Fashion Facebook has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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.
Ability to lead change in Strategy & Execution field
– Fashion Facebook 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 Fashion Facebook in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Fashion Facebook 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 Fashion Facebook is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Fashion Facebook is one of the leading recruiters in the industry. Managers in the Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Fashion Facebook 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 Matthias Tietz, Susan Calderon Urbina 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.
Highly skilled collaborators
– Fashion Facebook 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Fashion Facebook 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Fashion Facebook digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fashion Facebook 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.
High switching costs
– The high switching costs that Fashion Facebook 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.
Weaknesses Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru are -
Slow decision making process
– As mentioned earlier in the report, Fashion Facebook 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. Fashion Facebook 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.
Aligning sales with marketing
– It come across in the case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru can leverage the sales team experience to cultivate customer relationships as Fashion Facebook is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Matthias Tietz, Susan Calderon Urbina suggests that, Fashion Facebook 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Fashion Facebook has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru, it seems that the employees of Fashion Facebook 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, Fashion Facebook 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.
Increasing silos among functional specialists
– The organizational structure of Fashion Facebook is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fashion Facebook needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fashion Facebook to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fashion Facebook is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Fashion Facebook 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.
Low market penetration in new markets
– Outside its home market of Fashion Facebook, firm in the HBR case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Fashion Facebook 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.
Opportunities Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru | 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru are -
Buying journey improvements
– Fashion Facebook can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Fashion Facebook 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fashion Facebook to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fashion Facebook 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.
Creating value in data economy
– The success of analytics program of Fashion Facebook has opened avenues for new revenue streams for the organization in the industry. This can help Fashion Facebook to build a more holistic ecosystem as suggested in the Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru case study. Fashion Facebook can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fashion Facebook 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 Fashion Facebook to hire the very best people irrespective of their geographical location.
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 Fashion Facebook in the consumer business. Now Fashion Facebook can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Fashion Facebook 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.
Building a culture of innovation
– managers at Fashion Facebook 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 Strategy & Execution segment.
Loyalty marketing
– Fashion Facebook 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fashion Facebook 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. Fashion Facebook can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Leveraging digital technologies
– Fashion Facebook 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, Fashion Facebook 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, Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fashion Facebook can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fashion Facebook with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Fashion Facebook 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. Fashion Facebook can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Fashion Facebook 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.
Technology acceleration in Forth Industrial Revolution
– Fashion Facebook has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fashion Facebook needs to keep up with the evolution of technology in the Strategy & Execution 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.
High dependence on third party suppliers
– Fashion Facebook 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.
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 Fashion Facebook.
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. Fashion Facebook needs to understand the core reasons impacting the Strategy & Execution 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 Fashion Facebook in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fashion Facebook 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru, Fashion Facebook may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Fashion Facebook 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.
Regulatory challenges
– Fashion Facebook 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 Strategy & Execution industry regulations.
Increasing wage structure of Fashion Facebook
– 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 Fashion Facebook.
Weighted SWOT Analysis of Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Fashion Facebook needs to make to build a sustainable competitive advantage.