Case Study Description of VF Brands: Global Supply Chain Strategy
This case examines VF Brands global supply chain strategy. Historically, VF has used a combination of in-house manufacturing and traditional arms-length sourcing arrangements. At the time of the case, the company is considering a third approach to supplier relations that involves much closer cooperation and partnerships. The goal of this "third way" approach is to create a sourcing relationship that combines some of the virtues of vertical integration with the flexibility of sourcing. Such arrangements are increasingly discussed in the operations literature and in practice. This case provides students an opportunity to do an in-depth analysis of such an arrangement, and develop an understanding of the trade-offs involved.
Swot Analysis of "VF Brands: Global Supply Chain Strategy" written by Gary P. Pisano, Pamela Adams includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vf Sourcing facing as an external strategic factors. Some of the topics covered in VF Brands: Global Supply Chain Strategy case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the VF Brands: Global Supply Chain Strategy casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , there is backlash against globalization, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, wage bills are increasing, etc
Introduction to SWOT Analysis of VF Brands: Global Supply Chain Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VF Brands: Global Supply Chain Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vf Sourcing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vf Sourcing 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 VF Brands: Global Supply Chain Strategy can be done for the following purposes –
1. Strategic planning using facts provided in VF Brands: Global Supply Chain Strategy case study
2. Improving business portfolio management of Vf Sourcing
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vf Sourcing
Strengths VF Brands: Global Supply Chain Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vf Sourcing in VF Brands: Global Supply Chain Strategy Harvard Business Review case study are -
Ability to recruit top talent
– Vf Sourcing is one of the leading recruiters in the industry. Managers in the VF Brands: Global Supply Chain Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Vf Sourcing 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 VF Brands: Global Supply Chain Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Vf Sourcing in the sector have low bargaining power. VF Brands: Global Supply Chain Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vf Sourcing to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– VF Brands: Global Supply Chain Strategy firm has clearly differentiated products in the market place. This has enabled Vf Sourcing to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Vf Sourcing to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Vf Sourcing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vf Sourcing 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
– Vf Sourcing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vf Sourcing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the VF Brands: Global Supply Chain Strategy 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 switching costs
– The high switching costs that Vf Sourcing 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.
Strong track record of project management
– Vf Sourcing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Vf Sourcing 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.
Innovation driven organization
– Vf Sourcing is one of the most innovative firm in sector. Manager in VF Brands: Global Supply Chain Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Technology & Operations field
– Vf Sourcing 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 Vf Sourcing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses VF Brands: Global Supply Chain Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VF Brands: Global Supply Chain Strategy are -
No frontier risks strategy
– After analyzing the HBR case study VF Brands: Global Supply Chain Strategy, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vf Sourcing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study VF Brands: Global Supply Chain Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study VF Brands: Global Supply Chain Strategy, in the dynamic environment Vf Sourcing has struggled to respond to the nimble upstart competition. Vf Sourcing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study VF Brands: Global Supply Chain Strategy 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 VF Brands: Global Supply Chain Strategy can leverage the sales team experience to cultivate customer relationships as Vf Sourcing is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As VF Brands: Global Supply Chain Strategy HBR case study mentions - Vf Sourcing 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study VF Brands: Global Supply Chain Strategy, it seems that the employees of Vf Sourcing 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.
Skills based hiring
– The stress on hiring functional specialists at Vf Sourcing 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 cash cycle compare to competitors
Vf Sourcing has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study VF Brands: Global Supply Chain Strategy, is just above the industry average. Vf Sourcing 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gary P. Pisano, Pamela Adams suggests that, Vf Sourcing 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.
Increasing silos among functional specialists
– The organizational structure of Vf Sourcing is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Vf Sourcing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vf Sourcing to focus more on services rather than just following the product oriented approach.
Opportunities VF Brands: Global Supply Chain Strategy | 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 VF Brands: Global Supply Chain Strategy are -
Better consumer reach
– The expansion of the 5G network will help Vf Sourcing to increase its market reach. Vf Sourcing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vf Sourcing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Vf Sourcing can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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 Vf Sourcing in the consumer business. Now Vf Sourcing can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Vf Sourcing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. VF Brands: Global Supply Chain Strategy 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vf Sourcing is facing challenges because of the dominance of functional experts in the organization. VF Brands: Global Supply Chain Strategy 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vf Sourcing 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, VF Brands: Global Supply Chain Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Vf Sourcing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Vf Sourcing can develop new processes and procedures in Technology & Operations 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.
Learning at scale
– Online learning technologies has now opened space for Vf Sourcing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vf Sourcing 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 Vf Sourcing to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Vf Sourcing has opened avenues for new revenue streams for the organization in the industry. This can help Vf Sourcing to build a more holistic ecosystem as suggested in the VF Brands: Global Supply Chain Strategy case study. Vf Sourcing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vf Sourcing 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. Vf Sourcing 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.
Threats VF Brands: Global Supply Chain Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VF Brands: Global Supply Chain Strategy are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vf Sourcing in the Technology & Operations industry. The Technology & Operations 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.
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.
Regulatory challenges
– Vf Sourcing 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 Technology & Operations industry regulations.
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 Vf Sourcing business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vf Sourcing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study VF Brands: Global Supply Chain Strategy, Vf Sourcing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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. Vf Sourcing 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.
Increasing wage structure of Vf Sourcing
– 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 Vf Sourcing.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vf Sourcing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vf Sourcing 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 VF Brands: Global Supply Chain Strategy .
Environmental challenges
– Vf Sourcing 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. Vf Sourcing can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Vf Sourcing 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.
Weighted SWOT Analysis of VF Brands: Global Supply Chain Strategy 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 VF Brands: Global Supply Chain Strategy 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 VF Brands: Global Supply Chain Strategy 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 VF Brands: Global Supply Chain Strategy 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 VF Brands: Global Supply Chain Strategy 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 Vf Sourcing needs to make to build a sustainable competitive advantage.
