Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain
Luen Thai is considering adopting a "design-to-store" supply chain strategy to compete in the apparel market as he faces increasing margin pressure, new market entrants, and China's WTO entry. The decision to implement "design-to-store" will depend on the success of partner process integration (between fabric mill, manufacturer, and brand) and mechanisms to enhance "collaborative behavior" between partners. Luen Thai endeavors to fundamentally improve information flow which could lead to change in processes and create multi-company efficiencies.
Authors :: Benjamin Yen, Ali F. Farhoomand, Shamza Khan
Swot Analysis of "Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain" written by Benjamin Yen, Ali F. Farhoomand, Shamza Khan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Luen Thai facing as an external strategic factors. Some of the topics covered in Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain case study are - Strategic Management Strategies, Manufacturing, Productivity, Strategy, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Luen Thai, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Luen Thai 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain can be done for the following purposes –
1. Strategic planning using facts provided in Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain case study
2. Improving business portfolio management of Luen Thai
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 Luen Thai
Strengths Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Luen Thai in Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain Harvard Business Review case study are -
Strong track record of project management
– Luen Thai is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Luen Thai
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Luen Thai does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Luen Thai 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain firm has clearly differentiated products in the market place. This has enabled Luen Thai to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Luen Thai to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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.
Innovation driven organization
– Luen Thai is one of the most innovative firm in sector. Manager in Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Luen Thai 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.
High switching costs
– The high switching costs that Luen Thai 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.
Ability to recruit top talent
– Luen Thai is one of the leading recruiters in the industry. Managers in the Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Luen Thai in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Luen Thai is present in almost all the verticals within the industry. This has provided firm in Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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.
High brand equity
– Luen Thai has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Luen Thai to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain, it seems that the employees of Luen Thai 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Luen Thai is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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
Luen Thai 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain, is just above the industry average. Luen Thai 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.
Capital Spending Reduction
– Even during the low interest decade, Luen Thai 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.
Interest costs
– Compare to the competition, Luen Thai 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.
Need for greater diversity
– Luen Thai 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.
No frontier risks strategy
– After analyzing the HBR case study Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Luen Thai has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Luen Thai 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. Luen Thai 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.
Lack of clear differentiation of Luen Thai products
– To increase the profitability and margins on the products, Luen Thai needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain | 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain are -
Building a culture of innovation
– managers at Luen Thai 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 Technology & Operations segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Luen Thai can use these opportunities to build new business models that can help the communities that Luen Thai operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Manufacturing automation
– Luen Thai 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Luen Thai 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.
Learning at scale
– Online learning technologies has now opened space for Luen Thai 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Luen Thai 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, Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Luen Thai is facing challenges because of the dominance of functional experts in the organization. Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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.
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. Luen Thai can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Luen Thai has opened avenues for new revenue streams for the organization in the industry. This can help Luen Thai to build a more holistic ecosystem as suggested in the Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain case study. Luen Thai can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Luen Thai can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Luen Thai 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.
Using analytics as competitive advantage
– Luen Thai 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Luen Thai to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Luen Thai can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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.
Threats Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain, Luen Thai 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 .
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.
Environmental challenges
– Luen Thai 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. Luen Thai can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Luen Thai
– 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 Luen Thai.
Consumer confidence and its impact on Luen Thai 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.
Regulatory challenges
– Luen Thai 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 Luen Thai business can come under increasing regulations regarding data privacy, data security, etc.
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 Luen Thai.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Luen Thai with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Luen Thai 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Luen Thai 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain .
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 Luen Thai in the Technology & Operations sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain 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 Luen Thai needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Polo Ralph Lauren & Luen Thai: Using Collaborative Supply Chain Integration in the Apparel Value Chain