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Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit


In March 2018, the new business development manager of the international trade department of M/S Padhy Leather Ltd. was trying to find a way to balance her key responsibilities. The manufacturing start-up, located in New Town, India, was in the business of exporting leather garments and was promoted by two young, first generation entrepreneurs. The company had started its export business with a few clients in the United States. The manager's key responsibilities were exploring new markets and clients. Her immediate target was the United States, after which she would expand the business into Canada. She was concerned with how to minimize the commercial risks (non-payment risks such as transport and country risk) from new and untested clients while developing business and improving profitability. D.N. Panigrahi is affiliated with Institute of Management Technology, Nagpur.

Authors :: D.N. Panigrahi

Topics :: Innovation & Entrepreneurship

Tags :: Risk management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit" written by D.N. Panigrahi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Leather Padhy facing as an external strategic factors. Some of the topics covered in Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit case study are - Strategic Management Strategies, Risk management and Innovation & Entrepreneurship.


Some of the macro environment factors that can be used to understand the Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit casestudy better are - – wage bills are increasing, increasing energy prices, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc



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Introduction to SWOT Analysis of Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Leather Padhy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Leather Padhy 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit can be done for the following purposes –
1. Strategic planning using facts provided in Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit case study
2. Improving business portfolio management of Leather Padhy
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 Leather Padhy




Strengths Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Leather Padhy in Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit Harvard Business Review case study are -

Innovation driven organization

– Leather Padhy is one of the most innovative firm in sector. Manager in Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

High brand equity

– Leather Padhy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Leather Padhy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Innovation & Entrepreneurship field

– Leather Padhy 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 Leather Padhy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Leather Padhy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Leather Padhy 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.

Strong track record of project management

– Leather Padhy 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

– Leather Padhy is present in almost all the verticals within the industry. This has provided firm in Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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.

Sustainable margins compare to other players in Innovation & Entrepreneurship industry

– Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit firm has clearly differentiated products in the market place. This has enabled Leather Padhy to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Leather Padhy to invest into research and development (R&D) and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Leather Padhy are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

High switching costs

– The high switching costs that Leather Padhy has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Ability to recruit top talent

– Leather Padhy is one of the leading recruiters in the industry. Managers in the Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Low bargaining power of suppliers

– Suppliers of Leather Padhy in the sector have low bargaining power. Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Leather Padhy to manage not only supply disruptions but also source products at highly competitive prices.

Analytics focus

– Leather Padhy 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 D.N. Panigrahi 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.






Weaknesses Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit are -

No frontier risks strategy

– After analyzing the HBR case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit, 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.

Increasing silos among functional specialists

– The organizational structure of Leather Padhy is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Leather Padhy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Leather Padhy to focus more on services rather than just following the product oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit, in the dynamic environment Leather Padhy has struggled to respond to the nimble upstart competition. Leather Padhy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit, it seems that the employees of Leather Padhy 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.

Products dominated business model

– Even though Leather Padhy 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 - Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

Leather Padhy 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.

Aligning sales with marketing

– It come across in the case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit can leverage the sales team experience to cultivate customer relationships as Leather Padhy is planning to shift buying processes online.

Slow decision making process

– As mentioned earlier in the report, Leather Padhy 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. Leather Padhy 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.

Interest costs

– Compare to the competition, Leather Padhy 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.

Low market penetration in new markets

– Outside its home market of Leather Padhy, firm in the HBR case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Leather Padhy supply chain. Even after few cautionary changes mentioned in the HBR case study - Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Leather Padhy vulnerable to further global disruptions in South East Asia.




Opportunities Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit | 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit are -

Building a culture of innovation

– managers at Leather Padhy 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 Innovation & Entrepreneurship segment.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Leather Padhy 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 Leather Padhy to hire the very best people irrespective of their geographical location.

Loyalty marketing

– Leather Padhy 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.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Leather Padhy 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. Leather Padhy 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.

Learning at scale

– Online learning technologies has now opened space for Leather Padhy 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 Leather Padhy in the consumer business. Now Leather Padhy can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– Leather Padhy 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.

Buying journey improvements

– Leather Padhy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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.

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 Leather Padhy 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Leather Padhy is facing challenges because of the dominance of functional experts in the organization. Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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

– Leather Padhy 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.

Creating value in data economy

– The success of analytics program of Leather Padhy has opened avenues for new revenue streams for the organization in the industry. This can help Leather Padhy to build a more holistic ecosystem as suggested in the Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit case study. Leather Padhy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Low interest rates

– Even though inflation is raising its head in most developed economies, Leather Padhy 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.




Threats Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit are -

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Leather Padhy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

High dependence on third party suppliers

– Leather Padhy 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.

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 Leather Padhy in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Leather Padhy has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Leather Padhy 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.

Environmental challenges

– Leather Padhy 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. Leather Padhy can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.

Stagnating economy with rate increase

– Leather Padhy 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.

Consumer confidence and its impact on Leather Padhy 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit, Leather Padhy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .

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. Leather Padhy 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. Leather Padhy 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, Leather Padhy 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit .

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.




Weighted SWOT Analysis of Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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 Padhy Leather: Minimizing Commercial Risk Through a Letter of Credit 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 Leather Padhy needs to make to build a sustainable competitive advantage.



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