Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible
Supplement to case HEC175. In the early 1990s, the company now known as Gildan Activewear was a small children's wear firm with revenues of $40 million. Its competition, legendary companies such as Russell, Fruit of the Loom, and Hanes, had sales in the billions of dollars. From its small beginnings and through unparalleled growth, Gildan went on to dominate most segments of the world's activewear market. This case presents the history of both the company and the industry, with an overview of major competitors. It systematically outlines Gildan's march toward domination, explaining not only how it built its position but also the in-house development of all its functions to strengthen that position. Finally, the case describes the strategic focus of the company as well as the values that motivate its managers. 2010 (Case A) The 2010 Gildan case (A) shows how a single company can influence industry leaders and dynamics and provides a classic example of the importance of the three pillars of strategic management: environment, internal management, and leadership. 2016 (Case B) The 2016 Gildan case (B) describes the situation in 2016. It can be used as a conclusion to the 2010 case for an interesting discussion of the social responsibility of a large company, or as a standalone case.
Swot Analysis of "Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible" written by Taieb Hafsi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gildan Activewear facing as an external strategic factors. Some of the topics covered in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible case study are - Strategic Management Strategies, Leadership, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible casestudy better are - – wage bills are increasing, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gildan Activewear, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gildan Activewear 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible can be done for the following purposes –
1. Strategic planning using facts provided in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible case study
2. Improving business portfolio management of Gildan Activewear
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gildan Activewear
Strengths Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gildan Activewear in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible Harvard Business Review case study are -
Organizational Resilience of Gildan Activewear
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gildan Activewear does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Gildan Activewear 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 Gildan Activewear in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Gildan Activewear 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Gildan Activewear 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 Gildan Activewear is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Gildan Activewear in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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
– Gildan Activewear has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gildan Activewear 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.
Diverse revenue streams
– Gildan Activewear is present in almost all the verticals within the industry. This has provided firm in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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.
Effective Research and Development (R&D)
– Gildan Activewear has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Gildan Activewear is one of the most innovative firm in sector. Manager in Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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
– Gildan Activewear is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Gildan Activewear digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gildan Activewear 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.
Weaknesses Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible are -
High cash cycle compare to competitors
Gildan Activewear 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gildan Activewear is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 operating costs
– Compare to the competitors, firm in the HBR case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 Gildan Activewear 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Products dominated business model
– Even though Gildan Activewear has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Gildan Activewear 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.
Increasing silos among functional specialists
– The organizational structure of Gildan Activewear is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Gildan Activewear needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gildan Activewear to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible, it seems that the employees of Gildan Activewear 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 decision making process
– As mentioned earlier in the report, Gildan Activewear 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. Gildan Activewear 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible, in the dynamic environment Gildan Activewear has struggled to respond to the nimble upstart competition. Gildan Activewear has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Gildan Activewear 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.
Opportunities Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible | 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible are -
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. Gildan Activewear can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Gildan Activewear has opened avenues for new revenue streams for the organization in the industry. This can help Gildan Activewear to build a more holistic ecosystem as suggested in the Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible case study. Gildan Activewear can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Gildan Activewear 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.
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 Gildan Activewear in the consumer business. Now Gildan Activewear can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gildan Activewear in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Gildan Activewear 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 Leadership & Managing People 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, Gildan Activewear can use these opportunities to build new business models that can help the communities that Gildan Activewear operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Gildan Activewear 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Gildan Activewear 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, Gildan Activewear 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, Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible, 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, Gildan Activewear is facing challenges because of the dominance of functional experts in the organization. Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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.
Manufacturing automation
– Gildan Activewear can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gildan Activewear can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible are -
Consumer confidence and its impact on Gildan Activewear 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.
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
– Gildan Activewear 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. Gildan Activewear can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Gildan Activewear has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Gildan Activewear needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Increasing wage structure of Gildan Activewear
– 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 Gildan Activewear.
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 Gildan Activewear in the Leadership & Managing People sector and impact the bottomline 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 Gildan Activewear business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Gildan Activewear 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 Leadership & Managing People industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible, Gildan Activewear may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
High dependence on third party suppliers
– Gildan Activewear high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gildan Activewear can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Gildan Activewear 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.
Weighted SWOT Analysis of Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 Gildan Activewear Inc. (B) - 2016: Profitable and Socially Responsible 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 Gildan Activewear needs to make to build a sustainable competitive advantage.
