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, increasing energy prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, 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 -
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.
High brand equity
– Fashion Facebook has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fashion Facebook to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru firm has clearly differentiated products in the market place. This has enabled Fashion Facebook to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Fashion Facebook to invest into research and development (R&D) and innovation.
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.
Operational resilience
– The operational resilience strategy in the Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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
– Fashion Facebook is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Cross disciplinary teams
– Horizontal connected teams at the Fashion Facebook 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.
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.
Organizational Resilience of Fashion Facebook
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fashion Facebook does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru, is just above the industry average. Fashion Facebook 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.
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.
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.
Lack of clear differentiation of Fashion Facebook products
– To increase the profitability and margins on the products, Fashion Facebook needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Need for greater diversity
– Fashion Facebook 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.
Slow to strategic competitive environment developments
– As Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru HBR case study mentions - Fashion Facebook 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.
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.
Products dominated business model
– Even though Fashion Facebook 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 - Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Fashion Facebook 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 operating costs
– Compare to the competitors, firm in the HBR case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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 Fashion Facebook 's lucrative customers.
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 -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Fashion Facebook 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 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fashion Facebook in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Fashion Facebook to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Fashion Facebook 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.
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.
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.
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.
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. Fashion Facebook can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fashion Facebook 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 Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru .
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.
Stagnating economy with rate increase
– Fashion Facebook 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
