Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges
New and existing companies are looking for ways to thrive in a competitive environment with innovative business models while respecting society and avoiding actions that harm the planet. Trends such as the circular economy, fair trade, lowsumerism, and the sharing economy are some of the many emerging entrepreneurial approaches that address this issue, but there is still a gap between what theory argues and the levels of environmental and social sustainability realized when theory is put into practice. In fact, most research on the topic of sustainable business models is still exploratory and does not fully acknowledge these emerging approaches, whose definitions, boundaries, and defining characteristics are still somewhat vague. This study seeks to contribute to the understanding of the inner entrepreneurial dynamics of innovative sustainable business models. In particular, we focus on the fashion business, a resource-intensive industry in which opportunities to reduce environmental impacts and to innovate business models abound. The aim of our research is to investigate innovative business models in the fashion industry that have sustainability as their defining characteristic, especially in terms of value proposition. In order to do that, we combine a systematic review of the literature with empirical research comprised of six interviews with specialists in sustainability, business model innovation, and the fashion industry, along with eight case studies on innovative fashion startups we define as 'born sustainable.' As a result, we propose a synthesizing framework that discloses trends and drivers of innovative and sustainable business models in the fashion industry. We also highlight opportunities and challenges for researchers and entrepreneurs interested in this topic.
Authors :: Bruna Villa Todeschini, Marcelo Nogueira Cortimiglia, Daniela Callegaro-de-Menezes, Antonio Ghezzi
Swot Analysis of "Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges" written by Bruna Villa Todeschini, Marcelo Nogueira Cortimiglia, Daniela Callegaro-de-Menezes, Antonio Ghezzi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fashion Models facing as an external strategic factors. Some of the topics covered in Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges case study are - Strategic Management Strategies, Growth strategy, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, geopolitical disruptions, technology disruption, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%,
there is increasing trade war between United States & China, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fashion Models, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fashion Models 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges can be done for the following purposes –
1. Strategic planning using facts provided in Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges case study
2. Improving business portfolio management of Fashion Models
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fashion Models
Strengths Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fashion Models in Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges Harvard Business Review case study are -
Ability to recruit top talent
– Fashion Models is one of the leading recruiters in the industry. Managers in the Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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.
Successful track record of launching new products
– Fashion Models has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fashion Models 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Fashion Models digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fashion Models 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.
Ability to lead change in Innovation & Entrepreneurship field
– Fashion Models is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Fashion Models in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Fashion Models 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 Bruna Villa Todeschini, Marcelo Nogueira Cortimiglia, Daniela Callegaro-de-Menezes, Antonio Ghezzi 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.
Cross disciplinary teams
– Horizontal connected teams at the Fashion Models are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Fashion Models 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Fashion Models is one of the most innovative firm in sector. Manager in Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Fashion Models is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Fashion Models is present in almost all the verticals within the industry. This has provided firm in Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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 switching costs
– The high switching costs that Fashion Models 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.
Weaknesses Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges are -
Lack of clear differentiation of Fashion Models products
– To increase the profitability and margins on the products, Fashion Models needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Fashion Models needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges, it seems that the employees of Fashion Models 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fashion Models has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fashion Models is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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 bargaining power of channel partners
– Because of the regulatory requirements, Bruna Villa Todeschini, Marcelo Nogueira Cortimiglia, Daniela Callegaro-de-Menezes, Antonio Ghezzi suggests that, Fashion Models 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.
Need for greater diversity
– Fashion Models 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.
Slow decision making process
– As mentioned earlier in the report, Fashion Models has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Fashion Models 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.
Skills based hiring
– The stress on hiring functional specialists at Fashion Models 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges, in the dynamic environment Fashion Models has struggled to respond to the nimble upstart competition. Fashion Models has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges HBR case study mentions - Fashion Models 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.
Opportunities Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges | 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges are -
Better consumer reach
– The expansion of the 5G network will help Fashion Models to increase its market reach. Fashion Models 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.
Creating value in data economy
– The success of analytics program of Fashion Models has opened avenues for new revenue streams for the organization in the industry. This can help Fashion Models to build a more holistic ecosystem as suggested in the Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges case study. Fashion Models can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Fashion Models can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fashion Models 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, Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Fashion Models in the consumer business. Now Fashion Models can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Fashion Models 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
– Fashion Models 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fashion Models to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fashion Models 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 Fashion Models to hire the very best people irrespective of their geographical location.
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. Fashion Models can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Fashion Models can develop new processes and procedures in Innovation & Entrepreneurship 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fashion Models 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
– Fashion Models 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Fashion Models 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.
Threats Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges are -
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fashion Models can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fashion Models 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges .
Increasing wage structure of Fashion Models
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Fashion Models.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fashion Models 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. Fashion Models 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fashion Models in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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. Fashion Models needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Fashion Models has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Fashion Models needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Consumer confidence and its impact on Fashion Models 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
– Fashion Models 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 Innovation & Entrepreneurship industry regulations.
Environmental challenges
– Fashion Models needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fashion Models can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Fashion Models business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges 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 Innovation and Sustainable Business Models in the Fashion Industry: Entrepreneurial Drivers, Opportunities, and Challenges is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Fashion Models needs to make to build a sustainable competitive advantage.
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