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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, 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 -
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 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.
Diverse revenue streams
– Fashion Facebook is present in almost all the verticals within the industry. This has provided firm in Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru 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.
Superior customer experience
– The customer experience strategy of Fashion Facebook in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
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.
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.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Mi Tiendecita de Moda: Selling Fashion Through Facebook in Peru, in the dynamic environment Fashion Facebook has struggled to respond to the nimble upstart competition. Fashion Facebook has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fashion Facebook can use these opportunities to build new business models that can help the communities that Fashion Facebook operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Fashion Facebook to increase its market reach. Fashion Facebook 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.
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.
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.
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.
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.
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.
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.
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 -
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 .
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. Fashion Facebook can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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 Fashion Facebook business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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 .
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.
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.
