The Children's Place, Inc.: Challenges in a Post-Rana Plaza World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Children's Place, Inc.: Challenges in a Post-Rana Plaza World
The Children's Place was a New Jersey-based specialty retailer of apparel and accessories for children up to age 12. Starting in fiscal 2013, the company was moving from a clearance-centre model, where it sold a variety of national brands, to a made-for-outlet model that emphasized its own brands. This was necessitated by intense price competition in its market. The new strategy involved developing, coordinating and controlling its own global apparel value chain. When the Rana Plaza building in Dhaka, Bangladesh collapsed on April 24, 2013, killing and injuring a large number of workers, products destined for The Children's Place were found in the debris. The adverse publicity that ensued meant that the company's top management had to re-evaluate its strategy. What should be their response? Ram Subramanian is affiliated with Stetson University.
Swot Analysis of "The Children's Place, Inc.: Challenges in a Post-Rana Plaza World" written by Ram Subramanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Children's Rana facing as an external strategic factors. Some of the topics covered in The Children's Place, Inc.: Challenges in a Post-Rana Plaza World case study are - Strategic Management Strategies, Social responsibility, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Children's Place, Inc.: Challenges in a Post-Rana Plaza World casestudy better are - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, technology disruption, supply chains are disrupted by pandemic , 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, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The Children's Place, Inc.: Challenges in a Post-Rana Plaza World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Children's Place, Inc.: Challenges in a Post-Rana Plaza World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Children's Rana, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Children's Rana 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World can be done for the following purposes –
1. Strategic planning using facts provided in The Children's Place, Inc.: Challenges in a Post-Rana Plaza World case study
2. Improving business portfolio management of Children's Rana
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 Children's Rana
Strengths The Children's Place, Inc.: Challenges in a Post-Rana Plaza World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Children's Rana in The Children's Place, Inc.: Challenges in a Post-Rana Plaza World Harvard Business Review case study are -
Learning organization
- Children's Rana 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 Children's Rana is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Children's Place, Inc.: Challenges in a Post-Rana Plaza World Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Children's Rana 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Children's Rana in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– The Children's Place, Inc.: Challenges in a Post-Rana Plaza World firm has clearly differentiated products in the market place. This has enabled Children's Rana to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Children's Rana to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Children's Rana has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Children's Rana 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.
Cross disciplinary teams
– Horizontal connected teams at the Children's Rana 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.
Organizational Resilience of Children's Rana
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Children's Rana does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Children's Rana is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Children's Rana has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Children's Rana to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Children's Rana 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.
Low bargaining power of suppliers
– Suppliers of Children's Rana in the sector have low bargaining power. The Children's Place, Inc.: Challenges in a Post-Rana Plaza World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Children's Rana to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Children's Rana 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 Children's Rana in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses The Children's Place, Inc.: Challenges in a Post-Rana Plaza World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Children's Place, Inc.: Challenges in a Post-Rana Plaza World are -
Slow decision making process
– As mentioned earlier in the report, Children's Rana 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. Children's Rana 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.
Skills based hiring
– The stress on hiring functional specialists at Children's Rana 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Children's Place, Inc.: Challenges in a Post-Rana Plaza World, it seems that the employees of Children's Rana 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, Children's Rana 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Children's Rana 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Children's Rana is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Children's Place, Inc.: Challenges in a Post-Rana Plaza World can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 Children's Rana has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As The Children's Place, Inc.: Challenges in a Post-Rana Plaza World HBR case study mentions - Children's Rana 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.
Aligning sales with marketing
– It come across in the case study The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World can leverage the sales team experience to cultivate customer relationships as Children's Rana is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Children's Rana supply chain. Even after few cautionary changes mentioned in the HBR case study - The Children's Place, Inc.: Challenges in a Post-Rana Plaza World, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Children's Rana vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Ram Subramanian suggests that, Children's Rana 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.
Opportunities The Children's Place, Inc.: Challenges in a Post-Rana Plaza World | 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World are -
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. Children's Rana 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. Children's Rana 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.
Creating value in data economy
– The success of analytics program of Children's Rana has opened avenues for new revenue streams for the organization in the industry. This can help Children's Rana to build a more holistic ecosystem as suggested in the The Children's Place, Inc.: Challenges in a Post-Rana Plaza World case study. Children's Rana 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 Children's Rana 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 Children's Rana to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Children's Rana 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.
Using analytics as competitive advantage
– Children's Rana 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Children's Rana to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Children's Rana 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Children's Rana 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.
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. Children's Rana can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Children's Rana can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Children's Rana to increase its market reach. Children's Rana will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Children's Rana can use these opportunities to build new business models that can help the communities that Children's Rana operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Children's Rana 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.
Learning at scale
– Online learning technologies has now opened space for Children's Rana 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.
Threats The Children's Place, Inc.: Challenges in a Post-Rana Plaza World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Children's Place, Inc.: Challenges in a Post-Rana Plaza World are -
High dependence on third party suppliers
– Children's Rana 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 Children's Rana.
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 Children's Rana business can come under increasing regulations regarding data privacy, data security, etc.
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. Children's Rana 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
– Children's Rana 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. Children's Rana can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Children's Rana 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.
Regulatory challenges
– Children's Rana 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.
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. Children's Rana can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Children's Rana 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.
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.
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.
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. Children's Rana needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Children's Rana with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 The Children's Place, Inc.: Challenges in a Post-Rana Plaza World 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 Children's Rana needs to make to build a sustainable competitive advantage.
