Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany
The case focuses on the diamond retailing industry toward the end of 2008, with the United States in an economic downturn. All diamond retailers are hit by the downturn and are facing a critical look at their strategies. Given the basic performance information on Blue Nile, Zales, and Tiffany, students are asked to consider the strengths and weaknesses of each business model with the goal of understanding business models that are better suited to handling a downturn.
Swot Analysis of "Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany" written by Sunil Chopra, Roby Thomas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zales Diamond facing as an external strategic factors. Some of the topics covered in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, technology disruption, geopolitical disruptions, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zales Diamond, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zales Diamond 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany can be done for the following purposes –
1. Strategic planning using facts provided in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany case study
2. Improving business portfolio management of Zales Diamond
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 Zales Diamond
Strengths Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zales Diamond in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Zales Diamond in the sector have low bargaining power. Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zales Diamond to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Zales Diamond has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zales Diamond to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Zales Diamond has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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.
Operational resilience
– The operational resilience strategy in the Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Zales Diamond 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.
Learning organization
- Zales Diamond 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 Zales Diamond is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Zales Diamond is one of the leading recruiters in the industry. Managers in the Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Zales Diamond is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Zales Diamond has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zales Diamond 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.
Analytics focus
– Zales Diamond is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Sunil Chopra, Roby Thomas can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Zales Diamond is one of the most innovative firm in sector. Manager in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Zales Diamond is present in almost all the verticals within the industry. This has provided firm in Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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.
Weaknesses Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany are -
Capital Spending Reduction
– Even during the low interest decade, Zales Diamond 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.
Slow decision making process
– As mentioned earlier in the report, Zales Diamond 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. Zales Diamond 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany, is just above the industry average. Zales Diamond 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany, in the dynamic environment Zales Diamond has struggled to respond to the nimble upstart competition. Zales Diamond has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Zales Diamond has relatively successful track record of launching new products.
Lack of clear differentiation of Zales Diamond products
– To increase the profitability and margins on the products, Zales Diamond needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Sunil Chopra, Roby Thomas suggests that, Zales Diamond 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.
Low market penetration in new markets
– Outside its home market of Zales Diamond, firm in the HBR case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zales Diamond is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 cash cycle compare to competitors
Zales Diamond 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.
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 Zales Diamond supply chain. Even after few cautionary changes mentioned in the HBR case study - Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zales Diamond vulnerable to further global disruptions in South East Asia.
Opportunities Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany | 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany are -
Better consumer reach
– The expansion of the 5G network will help Zales Diamond to increase its market reach. Zales Diamond 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zales Diamond 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.
Using analytics as competitive advantage
– Zales Diamond 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zales Diamond to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Zales Diamond 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.
Buying journey improvements
– Zales Diamond can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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.
Manufacturing automation
– Zales Diamond 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.
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 Zales Diamond 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zales Diamond 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 Zales Diamond to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zales Diamond can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Zales Diamond in the consumer business. Now Zales Diamond can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zales Diamond is facing challenges because of the dominance of functional experts in the organization. Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zales Diamond can use these opportunities to build new business models that can help the communities that Zales Diamond operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Zales Diamond can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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. Zales Diamond 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.
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.
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 Zales Diamond 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. Zales Diamond can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zales Diamond 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.
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 Zales Diamond.
Stagnating economy with rate increase
– Zales Diamond 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany, Zales Diamond 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 .
Environmental challenges
– Zales Diamond 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. Zales Diamond can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Zales Diamond needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Zales Diamond is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Zales Diamond 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.
Weighted SWOT Analysis of Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany 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 Zales Diamond needs to make to build a sustainable competitive advantage.
