Swot Analysis of "Grupo Garantia (C) Lojas Americanas SA: The Retail Chain" written by R. Jeffrey Ellis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Americanas Lojas facing as an external strategic factors. Some of the topics covered in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study are - Strategic Management Strategies, Economy, Emerging markets, Globalization, Joint ventures and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain casestudy better are - – wage bills are increasing, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Grupo Garantia (C) Lojas Americanas SA: The Retail Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Americanas Lojas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain can be done for the following purposes –
1. Strategic planning using facts provided in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study
2. Improving business portfolio management of Americanas Lojas
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Americanas Lojas
Strengths Grupo Garantia (C) Lojas Americanas SA: The Retail Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Americanas Lojas in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain Harvard Business Review case study are -
High brand equity
– Americanas Lojas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Americanas Lojas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Americanas Lojas 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 Americanas Lojas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Americanas Lojas 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Americanas Lojas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Americanas Lojas 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.
High switching costs
– The high switching costs that Americanas Lojas 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Grupo Garantia (C) Lojas Americanas SA: The Retail Chain firm has clearly differentiated products in the market place. This has enabled Americanas Lojas to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Americanas Lojas to invest into research and development (R&D) and innovation.
Organizational Resilience of Americanas Lojas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Americanas Lojas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Americanas Lojas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Americanas Lojas 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.
Highly skilled collaborators
– Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Americanas Lojas has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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.
Innovation driven organization
– Americanas Lojas is one of the most innovative firm in sector. Manager in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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
– Americanas Lojas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Grupo Garantia (C) Lojas Americanas SA: The Retail Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grupo Garantia (C) Lojas Americanas SA: The Retail Chain are -
High bargaining power of channel partners
– Because of the regulatory requirements, R. Jeffrey Ellis suggests that, Americanas Lojas 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.
Increasing silos among functional specialists
– The organizational structure of Americanas Lojas is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Americanas Lojas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Americanas Lojas to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Americanas Lojas has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Americanas Lojas 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain, in the dynamic environment Americanas Lojas has struggled to respond to the nimble upstart competition. Americanas Lojas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain can leverage the sales team experience to cultivate customer relationships as Americanas Lojas is planning to shift buying processes online.
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 Americanas Lojas supply chain. Even after few cautionary changes mentioned in the HBR case study - Grupo Garantia (C) Lojas Americanas SA: The Retail Chain, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Americanas Lojas vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain, is just above the industry average. Americanas Lojas 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.
Capital Spending Reduction
– Even during the low interest decade, Americanas Lojas has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Americanas Lojas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Grupo Garantia (C) Lojas Americanas SA: The Retail Chain | 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain are -
Developing new processes and practices
– Americanas Lojas can develop new processes and procedures in Finance & Accounting 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.
Better consumer reach
– The expansion of the 5G network will help Americanas Lojas to increase its market reach. Americanas Lojas 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Americanas Lojas 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 Americanas Lojas 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 Americanas Lojas 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Americanas Lojas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Americanas Lojas 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.
Creating value in data economy
– The success of analytics program of Americanas Lojas has opened avenues for new revenue streams for the organization in the industry. This can help Americanas Lojas to build a more holistic ecosystem as suggested in the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study. Americanas Lojas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Americanas Lojas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Americanas Lojas 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.
Manufacturing automation
– Americanas Lojas can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Americanas Lojas 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. Americanas Lojas 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Americanas Lojas can use these opportunities to build new business models that can help the communities that Americanas Lojas operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Americanas Lojas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain are -
Technology acceleration in Forth Industrial Revolution
– Americanas Lojas has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Americanas Lojas needs to keep up with the evolution of technology in the Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Americanas Lojas 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 Americanas Lojas
– 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 Americanas Lojas.
High dependence on third party suppliers
– Americanas Lojas 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 Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Americanas Lojas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Americanas Lojas 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.
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 Americanas Lojas in the Finance & Accounting sector and impact the bottomline of the organization.
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. Americanas Lojas 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Americanas Lojas in the Finance & Accounting industry. The Finance & Accounting 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.
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.
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. Americanas Lojas needs to understand the core reasons impacting the Finance & Accounting 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, Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain .
Regulatory challenges
– Americanas Lojas 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 Finance & Accounting industry regulations.
Weighted SWOT Analysis of Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Americanas Lojas needs to make to build a sustainable competitive advantage.
