It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top
The case "It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top" describes the meteoric rise of this fashion company and outlines the strategic options it might consider for the future. The year 2014 marked three years since Michael Kors Limited had completed a successful IPO. But John Idol (CEO) and Michael Kors (Chief Creative Officer) needed to take stock. There were indications that the handbag market might be becoming saturated. Also, there were concerns that the brand risked losing its appeal. International growth was critical to the future of the company and it remained to be seen whether its approach would work in Europe and Asia.
Authors :: Fabrizio Ferraro, Andrea Baldo, Alice Tozer, Veronica Arribas
Swot Analysis of "It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top" written by Fabrizio Ferraro, Andrea Baldo, Alice Tozer, Veronica Arribas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kors Michael facing as an external strategic factors. Some of the topics covered in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top casestudy better are - – wage bills are increasing, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, geopolitical disruptions, technology disruption, challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kors Michael, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kors Michael 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top can be done for the following purposes –
1. Strategic planning using facts provided in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top case study
2. Improving business portfolio management of Kors Michael
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 Kors Michael
Strengths It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kors Michael in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top Harvard Business Review case study are -
Innovation driven organization
– Kors Michael is one of the most innovative firm in sector. Manager in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Kors Michael has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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.
Diverse revenue streams
– Kors Michael is present in almost all the verticals within the industry. This has provided firm in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Kors Michael 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Kors Michael is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Kors Michael 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 Kors Michael in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Kors Michael 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.
Operational resilience
– The operational resilience strategy in the It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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.
High brand equity
– Kors Michael has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kors Michael to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Kors Michael is one of the leading recruiters in the industry. Managers in the It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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
– It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top firm has clearly differentiated products in the market place. This has enabled Kors Michael to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Kors Michael to invest into research and development (R&D) and innovation.
Learning organization
- Kors Michael 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 Kors Michael is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top, is just above the industry average. Kors Michael 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.
Increasing silos among functional specialists
– The organizational structure of Kors Michael is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Kors Michael needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kors Michael to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Kors Michael has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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 Kors Michael has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Kors Michael 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.
Need for greater diversity
– Kors Michael 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.
Interest costs
– Compare to the competition, Kors Michael 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.
Capital Spending Reduction
– Even during the low interest decade, Kors Michael 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top, in the dynamic environment Kors Michael has struggled to respond to the nimble upstart competition. Kors Michael has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Kors Michael supply chain. Even after few cautionary changes mentioned in the HBR case study - It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kors Michael vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Kors Michael 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 - It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top should strive to include more intangible value offerings along with its core products and services.
Opportunities It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top | 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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. Kors Michael 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. Kors Michael 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.
Better consumer reach
– The expansion of the 5G network will help Kors Michael to increase its market reach. Kors Michael 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kors Michael is facing challenges because of the dominance of functional experts in the organization. It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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.
Creating value in data economy
– The success of analytics program of Kors Michael has opened avenues for new revenue streams for the organization in the industry. This can help Kors Michael to build a more holistic ecosystem as suggested in the It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top case study. Kors Michael can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Kors Michael in the consumer business. Now Kors Michael can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kors Michael 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.
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 Kors Michael 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kors Michael 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, It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kors Michael 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kors Michael can use these opportunities to build new business models that can help the communities that Kors Michael operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kors Michael can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Kors Michael 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.
Manufacturing automation
– Kors Michael 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.
Threats It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top are -
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. Kors Michael 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.
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. Kors Michael can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Kors Michael 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.
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 Kors Michael.
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 Kors Michael business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kors Michael 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top .
High dependence on third party suppliers
– Kors Michael 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.
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 Kors Michael in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Kors Michael
– 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 Kors Michael.
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.
Technology acceleration in Forth Industrial Revolution
– Kors Michael has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Kors Michael 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.
Environmental challenges
– Kors Michael 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. Kors Michael can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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 It's in the Bag. Or Is It? Michael Kors' Quest to Stay at the Top 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 Kors Michael needs to make to build a sustainable competitive advantage.
