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 commodity prices, geopolitical disruptions, there is increasing trade war between United States & China, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, 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 -
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.
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.
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.
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.
Strong track record of project management
– Esquel Shirt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Effective Research and Development (R&D)
– Esquel Shirt 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Esquel Shirt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Esquel Shirt 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.
Successful track record of launching new products
– Esquel Shirt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Esquel Shirt 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.
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.
Operational resilience
– The operational resilience strategy in the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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 -
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Esquel Shirt 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. Esquel Shirt 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.
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.
Slow to strategic competitive environment developments
– As Esquel Group: Integrating Business Strategy and Corporate Social Responsibility HBR case study mentions - Esquel Shirt takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High 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.
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.
Lack of clear differentiation of Esquel Shirt products
– To increase the profitability and margins on the products, Esquel Shirt needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Esquel Shirt 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, it seems that the employees of Esquel Shirt 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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Esquel Shirt can use these opportunities to build new business models that can help the communities that Esquel Shirt operates in. Secondly it can use opportunities from government spending in Global Business sector.
Leveraging digital technologies
– Esquel Shirt 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Esquel Shirt can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 Esquel Shirt in the consumer business. Now Esquel Shirt can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Esquel Shirt 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Esquel Shirt is facing challenges because of the dominance of functional experts in the organization. Esquel Group: Integrating Business Strategy and Corporate Social Responsibility 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.
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.
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 -
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 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.
Technology acceleration in Forth Industrial Revolution
– Esquel Shirt has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Esquel Shirt 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.
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. Esquel Shirt 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.
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 .
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.
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Esquel Shirt business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Esquel Shirt 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 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.