Esquel Group: Integrating Business Strategy and Corporate Social Responsibility SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility
Focuses on the experience of China's largest shirt manufacturer in managing various aspects of government relations in China. Identifies a wide variety of social initiatives it has undertaken.
Authors :: F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty
Swot Analysis of "Esquel Group: Integrating Business Strategy and Corporate Social Responsibility" written by F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Esquel Shirt facing as an external strategic factors. Some of the topics covered in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study are - Strategic Management Strategies, Government, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility casestudy better are - – increasing energy prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Esquel Shirt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Esquel Shirt 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility can be done for the following purposes –
1. Strategic planning using facts provided in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study
2. Improving business portfolio management of Esquel Shirt
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 Esquel Shirt
Strengths Esquel Group: Integrating Business Strategy and Corporate Social Responsibility | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Esquel Shirt in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Esquel Shirt in the sector have low bargaining power. Esquel Group: Integrating Business Strategy and Corporate Social Responsibility has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Esquel Shirt to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Esquel Shirt is one of the most innovative firm in sector. Manager in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Esquel Shirt 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Esquel Shirt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Esquel Shirt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Esquel Shirt has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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.
Diverse revenue streams
– Esquel Shirt is present in almost all the verticals within the industry. This has provided firm in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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.
Cross disciplinary teams
– Horizontal connected teams at the Esquel Shirt 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.
Sustainable margins compare to other players in Global Business industry
– Esquel Group: Integrating Business Strategy and Corporate Social Responsibility firm has clearly differentiated products in the market place. This has enabled Esquel Shirt to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Esquel Shirt to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Esquel Shirt is one of the leading recruiters in the industry. Managers in the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Esquel Shirt 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 F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty 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.
Superior customer experience
– The customer experience strategy of Esquel Shirt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Esquel Shirt 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 Esquel Shirt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Esquel Group: Integrating Business Strategy and Corporate Social Responsibility | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are -
Workers concerns about automation
– As automation is fast increasing in the segment, Esquel Shirt 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Shirt has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, in the dynamic environment Esquel Shirt has struggled to respond to the nimble upstart competition. Esquel Shirt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Esquel Shirt is dominated by functional specialists. It is not different from other players in the Global Business segment. Esquel Shirt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Esquel Shirt to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Shirt 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, 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.
Products dominated business model
– Even though Esquel Shirt 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 - Esquel Group: Integrating Business Strategy and Corporate Social Responsibility should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility can leverage the sales team experience to cultivate customer relationships as Esquel Shirt is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty suggests that, Esquel Shirt 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.
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 Esquel Shirt supply chain. Even after few cautionary changes mentioned in the HBR case study - Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Esquel Shirt vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Esquel Shirt, firm in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Esquel Group: Integrating Business Strategy and Corporate Social Responsibility | 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Esquel Shirt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Esquel Shirt has opened avenues for new revenue streams for the organization in the industry. This can help Esquel Shirt to build a more holistic ecosystem as suggested in the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study. Esquel Shirt 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, Esquel Shirt 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.
Better consumer reach
– The expansion of the 5G network will help Esquel Shirt to increase its market reach. Esquel Shirt 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.
Buying journey improvements
– Esquel Shirt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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.
Building a culture of innovation
– managers at Esquel Shirt 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.
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. Esquel Shirt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Esquel Shirt 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Esquel Shirt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Esquel Shirt can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Esquel Shirt 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.
Learning at scale
– Online learning technologies has now opened space for Esquel Shirt 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.
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 Esquel Shirt 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.
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. Esquel Shirt 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. Esquel Shirt 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.
Threats Esquel Group: Integrating Business Strategy and Corporate Social Responsibility External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Esquel Shirt 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility .
Stagnating economy with rate increase
– Esquel Shirt 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Esquel Shirt 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 Esquel Shirt 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.
Environmental challenges
– Esquel Shirt 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. Esquel Shirt can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Esquel Shirt needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Esquel Shirt is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Esquel Shirt 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
– Esquel Shirt 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 Esquel Shirt in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Esquel Shirt
– 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 Esquel Shirt.
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 Esquel Shirt.
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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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 Esquel Shirt needs to make to build a sustainable competitive advantage.