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 - – wage bills are increasing, talent flight as more people leaving formal jobs, technology disruption, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
Ability to lead change in Global Business field
– Esquel Shirt 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 Esquel Shirt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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 -
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 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.
Need for greater diversity
– Esquel Shirt 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.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Esquel Shirt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility can help to provide better information regarding products and services. It can also build an online community to further reach out to potential 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.
High cash cycle compare to competitors
Esquel Shirt 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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
