Case Study Description of Style Inc.: Fine Bespoke Tailoring
In 2016, the owners of Styles Inc. (Styles), a bespoke tailoring company in Toronto, Canada, needed to decide whether to discontinue the least profitable of the company's seven clothing lines or to increase that clothing line's retail selling price. Over the previous six years, Styles had been financially successful, and customer retention was a major factor in this success. However, competition was increasing and profits were shrinking. Should the owners drop the clothing line that had the lowest margin or increase its retail selling price? If they chose to increase the price, they would need to decide on the amount of the price increase. The owners wondered whether increasing the price would still enable them to meet their target contribution margin.
Authors :: Elizabeth M.A. Grasby, Richie Bloomfield
Swot Analysis of "Style Inc.: Fine Bespoke Tailoring" written by Elizabeth M.A. Grasby, Richie Bloomfield includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bespoke Styles facing as an external strategic factors. Some of the topics covered in Style Inc.: Fine Bespoke Tailoring case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Style Inc.: Fine Bespoke Tailoring casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Style Inc.: Fine Bespoke Tailoring
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Style Inc.: Fine Bespoke Tailoring case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bespoke Styles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring can be done for the following purposes –
1. Strategic planning using facts provided in Style Inc.: Fine Bespoke Tailoring case study
2. Improving business portfolio management of Bespoke Styles
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 Bespoke Styles
Strengths Style Inc.: Fine Bespoke Tailoring | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bespoke Styles in Style Inc.: Fine Bespoke Tailoring Harvard Business Review case study are -
Successful track record of launching new products
– Bespoke Styles has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bespoke Styles 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Style Inc.: Fine Bespoke Tailoring firm has clearly differentiated products in the market place. This has enabled Bespoke Styles to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Bespoke Styles to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Bespoke Styles is one of the leading recruiters in the industry. Managers in the Style Inc.: Fine Bespoke Tailoring are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Bespoke Styles 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 Bespoke Styles is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Style Inc.: Fine Bespoke Tailoring Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Bespoke Styles 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.
Operational resilience
– The operational resilience strategy in the Style Inc.: Fine Bespoke Tailoring 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.
Analytics focus
– Bespoke Styles 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 Elizabeth M.A. Grasby, Richie Bloomfield 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.
High brand equity
– Bespoke Styles has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bespoke Styles to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring - 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
– Bespoke Styles is one of the most innovative firm in sector. Manager in Style Inc.: Fine Bespoke Tailoring Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Bespoke Styles 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.
Highly skilled collaborators
– Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Style Inc.: Fine Bespoke Tailoring | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Style Inc.: Fine Bespoke Tailoring are -
Low market penetration in new markets
– Outside its home market of Bespoke Styles, firm in the HBR case study Style Inc.: Fine Bespoke Tailoring needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Bespoke Styles 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 - Style Inc.: Fine Bespoke Tailoring should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Bespoke Styles is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Bespoke Styles needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bespoke Styles to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring 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 Bespoke Styles 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Elizabeth M.A. Grasby, Richie Bloomfield suggests that, Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring HBR case study mentions - Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring, is just above the industry average. Bespoke Styles 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.
No frontier risks strategy
– After analyzing the HBR case study Style Inc.: Fine Bespoke Tailoring, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Aligning sales with marketing
– It come across in the case study Style Inc.: Fine Bespoke Tailoring that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Style Inc.: Fine Bespoke Tailoring can leverage the sales team experience to cultivate customer relationships as Bespoke Styles is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring | 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 Style Inc.: Fine Bespoke Tailoring are -
Leveraging digital technologies
– Bespoke Styles 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bespoke Styles can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Bespoke Styles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Bespoke Styles can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Developing new processes and practices
– Bespoke Styles 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.
Learning at scale
– Online learning technologies has now opened space for Bespoke Styles 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.
Using analytics as competitive advantage
– Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bespoke Styles to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Bespoke Styles 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.
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 Bespoke Styles in the consumer business. Now Bespoke Styles can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Bespoke Styles can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Style Inc.: Fine Bespoke Tailoring 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bespoke Styles can use these opportunities to build new business models that can help the communities that Bespoke Styles operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bespoke Styles 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 Bespoke Styles to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Bespoke Styles has opened avenues for new revenue streams for the organization in the industry. This can help Bespoke Styles to build a more holistic ecosystem as suggested in the Style Inc.: Fine Bespoke Tailoring case study. Bespoke Styles can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Style Inc.: Fine Bespoke Tailoring External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Style Inc.: Fine Bespoke Tailoring are -
Consumer confidence and its impact on Bespoke Styles 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.
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. Bespoke Styles 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.
High dependence on third party suppliers
– Bespoke Styles 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bespoke Styles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Bespoke Styles
– 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 Bespoke Styles.
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 Bespoke Styles in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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. Bespoke Styles can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Bespoke Styles needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bespoke Styles 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 Style Inc.: Fine Bespoke Tailoring .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bespoke Styles 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.
Environmental challenges
– Bespoke Styles 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. Bespoke Styles can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Technology acceleration in Forth Industrial Revolution
– Bespoke Styles has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Bespoke Styles 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.
Weighted SWOT Analysis of Style Inc.: Fine Bespoke Tailoring 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 Style Inc.: Fine Bespoke Tailoring 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 Style Inc.: Fine Bespoke Tailoring 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 Style Inc.: Fine Bespoke Tailoring 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 Style Inc.: Fine Bespoke Tailoring 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 Bespoke Styles needs to make to build a sustainable competitive advantage.