Swot Analysis of "Veja: Sneakers with a Conscience" written by Kim Poldner, Oana Branzei includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fashion Eco facing as an external strategic factors. Some of the topics covered in Veja: Sneakers with a Conscience case study are - Strategic Management Strategies, Entrepreneurship, Ethics, Leadership, Mergers & acquisitions, Supply chain, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Veja: Sneakers with a Conscience casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing commodity prices,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Veja: Sneakers with a Conscience
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Veja: Sneakers with a Conscience case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fashion Eco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fashion Eco 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 Veja: Sneakers with a Conscience can be done for the following purposes –
1. Strategic planning using facts provided in Veja: Sneakers with a Conscience case study
2. Improving business portfolio management of Fashion Eco
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fashion Eco
Strengths Veja: Sneakers with a Conscience | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fashion Eco in Veja: Sneakers with a Conscience Harvard Business Review case study are -
Successful track record of launching new products
– Fashion Eco has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fashion Eco has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Fashion Eco is present in almost all the verticals within the industry. This has provided firm in Veja: Sneakers with a Conscience 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.
High brand equity
– Fashion Eco has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fashion Eco to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Fashion Eco is one of the most innovative firm in sector. Manager in Veja: Sneakers with a Conscience Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Fashion Eco has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Veja: Sneakers with a Conscience 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.
Superior customer experience
– The customer experience strategy of Fashion Eco in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Fashion Eco 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 Veja: Sneakers with a Conscience - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Fashion Eco 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 Fashion Eco is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Veja: Sneakers with a Conscience Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Veja: Sneakers with a Conscience firm has clearly differentiated products in the market place. This has enabled Fashion Eco to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Fashion Eco to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Fashion Eco in the sector have low bargaining power. Veja: Sneakers with a Conscience has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fashion Eco to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Fashion Eco is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Fashion Eco 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.
Weaknesses Veja: Sneakers with a Conscience | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Veja: Sneakers with a Conscience are -
High operating costs
– Compare to the competitors, firm in the HBR case study Veja: Sneakers with a Conscience 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 Fashion Eco 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Veja: Sneakers with a Conscience, in the dynamic environment Fashion Eco has struggled to respond to the nimble upstart competition. Fashion Eco has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Fashion Eco 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 cash cycle compare to competitors
Fashion Eco 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.
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 Fashion Eco supply chain. Even after few cautionary changes mentioned in the HBR case study - Veja: Sneakers with a Conscience, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fashion Eco vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Fashion Eco 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.
No frontier risks strategy
– After analyzing the HBR case study Veja: Sneakers with a Conscience, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Interest costs
– Compare to the competition, Fashion Eco 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.
Skills based hiring
– The stress on hiring functional specialists at Fashion Eco has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Fashion Eco 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 - Veja: Sneakers with a Conscience should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Veja: Sneakers with a Conscience 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 Fashion Eco has relatively successful track record of launching new products.
Opportunities Veja: Sneakers with a Conscience | 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 Veja: Sneakers with a Conscience are -
Developing new processes and practices
– Fashion Eco can develop new processes and procedures in Global Business 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fashion Eco in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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. Fashion Eco can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Fashion Eco 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, Fashion Eco can use these opportunities to build new business models that can help the communities that Fashion Eco operates in. Secondly it can use opportunities from government spending in Global Business sector.
Loyalty marketing
– Fashion Eco 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.
Building a culture of innovation
– managers at Fashion Eco 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 Global Business segment.
Buying journey improvements
– Fashion Eco can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Veja: Sneakers with a Conscience 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.
Using analytics as competitive advantage
– Fashion Eco 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 Veja: Sneakers with a Conscience - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fashion Eco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Fashion Eco to increase its market reach. Fashion Eco 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fashion Eco can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fashion Eco 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. Fashion Eco 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fashion Eco is facing challenges because of the dominance of functional experts in the organization. Veja: Sneakers with a Conscience 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.
Threats Veja: Sneakers with a Conscience External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Veja: Sneakers with a Conscience are -
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. Fashion Eco needs to understand the core reasons impacting the Global Business 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, Fashion Eco 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 Veja: Sneakers with a Conscience .
Technology acceleration in Forth Industrial Revolution
– Fashion Eco has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Fashion Eco needs to keep up with the evolution of technology in the Global Business 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fashion Eco.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fashion Eco with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Fashion Eco 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.
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 Fashion Eco in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Fashion Eco
– 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 Fashion Eco.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Fashion Eco 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. Fashion Eco can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Consumer confidence and its impact on Fashion Eco 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.
Shortening product life cycle
– it is one of the major threat that Fashion Eco is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fashion Eco in the Global Business industry. The Global Business 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.
Weighted SWOT Analysis of Veja: Sneakers with a Conscience 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 Veja: Sneakers with a Conscience 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 Veja: Sneakers with a Conscience 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 Veja: Sneakers with a Conscience 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 Veja: Sneakers with a Conscience 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 Fashion Eco needs to make to build a sustainable competitive advantage.