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 - – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, there is increasing trade war between United States & China, 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 -
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.
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.
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.
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.
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.
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.
Ability to lead change in Technology & Operations field
– Zales Diamond 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 Zales Diamond in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Zales Diamond digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zales Diamond has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
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.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany, it seems that the employees of Zales Diamond 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.
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.
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.
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.
Slow to strategic competitive environment developments
– As Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany HBR case study mentions - Zales Diamond 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.
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.
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.
Interest costs
– Compare to the competition, Zales Diamond 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zales Diamond 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Zales Diamond 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.
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 -
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zales Diamond 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, Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Developing new processes and practices
– Zales Diamond 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 Zales Diamond 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.
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.
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. Zales Diamond 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. Zales Diamond 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.
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.
Leveraging digital technologies
– Zales Diamond 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 Technology & Operations industry, but it has also influenced the consumer preferences. Zales Diamond can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 -
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zales Diamond 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 Focus on Diamond Retailing: Blue Nile, Zales, and Tiffany .
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.
Technology acceleration in Forth Industrial Revolution
– Zales Diamond has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Zales Diamond needs to keep up with the evolution of technology in the Technology & Operations 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zales Diamond with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 Zales Diamond in the Technology & Operations sector and impact the bottomline of the organization.
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 .
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.
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.
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.