Spanx Inc.: Growth Dilemma for a Shapewear Leader SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Spanx Inc.: Growth Dilemma for a Shapewear Leader
Spanx Inc., founded in 2000, was a U.S. intimate apparel company that sold body shaping undergarments known as shapewear. Through word-of-mouth marketing by celebrities and consumers, Spanx achieved 2016 sales of US$400 million globally. However, Spanx's leadership position was being threatened by a shift in consumer preferences, medical concerns over the dangers of compression wear, and competitors launching more comfortable products in the active wear category. Would Spanx be able to sustain its growth or was it beginning its decline? Arpita Agnihotri is affiliated with Pennsylvania State University - Harrisburg. Saurabh Bhattacharya is affiliated with Newcastle University.
Swot Analysis of "Spanx Inc.: Growth Dilemma for a Shapewear Leader" written by Arpita Agnihotri, Saurabh Bhattacharya includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spanx Shapewear facing as an external strategic factors. Some of the topics covered in Spanx Inc.: Growth Dilemma for a Shapewear Leader case study are - Strategic Management Strategies, Competitive strategy, Entrepreneurship, Innovation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Spanx Inc.: Growth Dilemma for a Shapewear Leader casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, there is backlash against globalization, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Spanx Inc.: Growth Dilemma for a Shapewear Leader
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Spanx Inc.: Growth Dilemma for a Shapewear Leader case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spanx Shapewear, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spanx Shapewear 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader can be done for the following purposes –
1. Strategic planning using facts provided in Spanx Inc.: Growth Dilemma for a Shapewear Leader case study
2. Improving business portfolio management of Spanx Shapewear
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Spanx Shapewear
Strengths Spanx Inc.: Growth Dilemma for a Shapewear Leader | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spanx Shapewear in Spanx Inc.: Growth Dilemma for a Shapewear Leader Harvard Business Review case study are -
Analytics focus
– Spanx Shapewear 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 Arpita Agnihotri, Saurabh Bhattacharya 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
– Spanx Shapewear has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spanx Shapewear to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Spanx Shapewear is one of the leading recruiters in the industry. Managers in the Spanx Inc.: Growth Dilemma for a Shapewear Leader are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Spanx Shapewear digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Spanx Shapewear 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.
Highly skilled collaborators
– Spanx Shapewear 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Spanx Shapewear 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 Spanx Shapewear in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Spanx Shapewear in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Spanx Shapewear 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.
Organizational Resilience of Spanx Shapewear
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spanx Shapewear does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Spanx Shapewear has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Spanx Inc.: Growth Dilemma for a Shapewear Leader Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Spanx Inc.: Growth Dilemma for a Shapewear Leader 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
– Spanx Shapewear has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spanx Shapewear 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.
Weaknesses Spanx Inc.: Growth Dilemma for a Shapewear Leader | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spanx Inc.: Growth Dilemma for a Shapewear Leader are -
Slow to strategic competitive environment developments
– As Spanx Inc.: Growth Dilemma for a Shapewear Leader HBR case study mentions - Spanx Shapewear 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Arpita Agnihotri, Saurabh Bhattacharya suggests that, Spanx Shapewear 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.
Interest costs
– Compare to the competition, Spanx Shapewear 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Spanx Inc.: Growth Dilemma for a Shapewear Leader, in the dynamic environment Spanx Shapewear has struggled to respond to the nimble upstart competition. Spanx Shapewear has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Spanx Shapewear, firm in the HBR case study Spanx Inc.: Growth Dilemma for a Shapewear Leader needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Spanx Shapewear 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.
High cash cycle compare to competitors
Spanx Shapewear 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, Spanx Shapewear is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Spanx Inc.: Growth Dilemma for a Shapewear Leader can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Spanx Shapewear 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Shapewear has relatively successful track record of launching new products.
Lack of clear differentiation of Spanx Shapewear products
– To increase the profitability and margins on the products, Spanx Shapewear needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Spanx Inc.: Growth Dilemma for a Shapewear Leader | 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spanx Shapewear 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 Spanx Shapewear to hire the very best people irrespective of their geographical location.
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 Spanx Shapewear 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.
Leveraging digital technologies
– Spanx Shapewear 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Spanx Shapewear can use these opportunities to build new business models that can help the communities that Spanx Shapewear operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Spanx Shapewear to increase its market reach. Spanx Shapewear 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.
Learning at scale
– Online learning technologies has now opened space for Spanx Shapewear 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Spanx Shapewear can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Spanx Shapewear can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Spanx Shapewear 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, Spanx Inc.: Growth Dilemma for a Shapewear Leader, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Spanx Shapewear can develop new processes and procedures in Strategy & Execution 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.
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. Spanx Shapewear 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 Spanx Shapewear has opened avenues for new revenue streams for the organization in the industry. This can help Spanx Shapewear to build a more holistic ecosystem as suggested in the Spanx Inc.: Growth Dilemma for a Shapewear Leader case study. Spanx Shapewear can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Spanx Shapewear is facing challenges because of the dominance of functional experts in the organization. Spanx Inc.: Growth Dilemma for a Shapewear Leader 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.
Buying journey improvements
– Spanx Shapewear can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Spanx Inc.: Growth Dilemma for a Shapewear Leader are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Spanx Shapewear 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader .
High dependence on third party suppliers
– Spanx Shapewear 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.
Stagnating economy with rate increase
– Spanx Shapewear can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Spanx Shapewear
– 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 Spanx Shapewear.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spanx Shapewear in the Strategy & Execution industry. The Strategy & Execution 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
– Spanx Shapewear 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. Spanx Shapewear can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Shortening product life cycle
– it is one of the major threat that Spanx Shapewear is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Spanx Shapewear 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 Strategy & Execution industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spanx Shapewear with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Spanx Shapewear business can come under increasing regulations regarding data privacy, data security, etc.
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 Spanx Shapewear in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Spanx Inc.: Growth Dilemma for a Shapewear Leader, Spanx Shapewear may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Inc.: Growth Dilemma for a Shapewear Leader 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 Spanx Shapewear needs to make to build a sustainable competitive advantage.