La Martina (B): Selling the Passion? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of La Martina (B): Selling the Passion?
March 2008. Lando Simonetti, founder and CEO of La Martina was pacing around his office in the Buenos Aires suburbs. Not so long ago, the offer that had just landed in his in-box would have been relegated to the trash bin within seconds. He had always been fervently committed to the independence of his firm - independence from investors, boards of directors, banks and politicians. From a local polo equipment producer, La Martina had become one of the most recognized global brand names in polo and fashion alike. He would have preferred to stay true to the brand's DNA, rooted in the estancia lifestyle and the polo game, delivering functional polo equipment. But that no longer seemed possible since the fashion industry had discovered the brand and transformed it into a fashion icon. This time the offer was different. It came from Tribeca Partners, a reputed South American private equity firm in BogotA¡ that had developed a serious fashion specialty. It had recently concluded its first deal in Argentina, acquiring one of La Martina's local competitors, Etiqueta Negra, with a view to taking it global. The company clearly knew about fashion and Argentina was on its radar screen. The offer was rock solid, valuing the company at close to three times sales and ten times EBIT. Was it time to let go? Learning objectives: Discuss exit planning, harvesting, private equity, growth management, and the fashion industry.
Authors :: Benoit Leleux, Dominique Turpin, Thomas Brochier
Swot Analysis of "La Martina (B): Selling the Passion?" written by Benoit Leleux, Dominique Turpin, Thomas Brochier includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Polo Fashion facing as an external strategic factors. Some of the topics covered in La Martina (B): Selling the Passion? case study are - Strategic Management Strategies, Entrepreneurship and Global Business.
Some of the macro environment factors that can be used to understand the La Martina (B): Selling the Passion? casestudy better are - – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing energy prices, increasing commodity prices, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of La Martina (B): Selling the Passion?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in La Martina (B): Selling the Passion? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Polo Fashion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Polo Fashion 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 La Martina (B): Selling the Passion? can be done for the following purposes –
1. Strategic planning using facts provided in La Martina (B): Selling the Passion? case study
2. Improving business portfolio management of Polo Fashion
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 Polo Fashion
Strengths La Martina (B): Selling the Passion? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Polo Fashion in La Martina (B): Selling the Passion? Harvard Business Review case study are -
Learning organization
- Polo Fashion 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 Polo Fashion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in La Martina (B): Selling the Passion? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Polo Fashion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Polo Fashion 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.
Low bargaining power of suppliers
– Suppliers of Polo Fashion in the sector have low bargaining power. La Martina (B): Selling the Passion? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Polo Fashion to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Polo Fashion 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 Benoit Leleux, Dominique Turpin, Thomas Brochier 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
– Polo Fashion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in La Martina (B): Selling the Passion? 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.
Strong track record of project management
– Polo Fashion is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Polo Fashion digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Polo Fashion 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.
Ability to lead change in Global Business field
– Polo Fashion 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 Polo Fashion in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Polo Fashion is one of the leading recruiters in the industry. Managers in the La Martina (B): Selling the Passion? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Polo Fashion 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.
Innovation driven organization
– Polo Fashion is one of the most innovative firm in sector. Manager in La Martina (B): Selling the Passion? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Polo Fashion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Polo Fashion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses La Martina (B): Selling the Passion? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of La Martina (B): Selling the Passion? are -
Interest costs
– Compare to the competition, Polo Fashion 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 Polo Fashion 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study La Martina (B): Selling the Passion?, it seems that the employees of Polo Fashion 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study La Martina (B): Selling the Passion?, in the dynamic environment Polo Fashion has struggled to respond to the nimble upstart competition. Polo Fashion has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Polo Fashion supply chain. Even after few cautionary changes mentioned in the HBR case study - La Martina (B): Selling the Passion?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Polo Fashion vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Polo Fashion is dominated by functional specialists. It is not different from other players in the Global Business segment. Polo Fashion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Polo Fashion to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Polo Fashion 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 star products
– The top 2 products and services of the firm as mentioned in the La Martina (B): Selling the Passion? 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 Polo Fashion has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study La Martina (B): Selling the Passion?, is just above the industry average. Polo Fashion needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Polo Fashion 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.
Aligning sales with marketing
– It come across in the case study La Martina (B): Selling the Passion? 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 La Martina (B): Selling the Passion? can leverage the sales team experience to cultivate customer relationships as Polo Fashion is planning to shift buying processes online.
Opportunities La Martina (B): Selling the Passion? | 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 La Martina (B): Selling the Passion? are -
Leveraging digital technologies
– Polo Fashion 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Polo Fashion can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Polo Fashion to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Polo Fashion to hire the very best people irrespective of their geographical location.
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. Polo Fashion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Polo Fashion 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. Polo Fashion 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, Polo Fashion is facing challenges because of the dominance of functional experts in the organization. La Martina (B): Selling the Passion? 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.
Manufacturing automation
– Polo Fashion 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Polo Fashion can use these opportunities to build new business models that can help the communities that Polo Fashion operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Polo Fashion 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 La Martina (B): Selling the Passion? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Polo Fashion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Polo Fashion 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Polo Fashion 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, La Martina (B): Selling the Passion?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Polo Fashion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Polo Fashion 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.
Threats La Martina (B): Selling the Passion? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study La Martina (B): Selling the Passion? are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Polo Fashion 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.
Increasing wage structure of Polo Fashion
– 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 Polo Fashion.
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 Polo Fashion business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Polo Fashion is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Polo Fashion 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 La Martina (B): Selling the Passion? .
Stagnating economy with rate increase
– Polo Fashion 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. Polo Fashion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Polo Fashion needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Environmental challenges
– Polo Fashion 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. Polo Fashion can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Polo Fashion 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
– Polo Fashion 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 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 La Martina (B): Selling the Passion? 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 La Martina (B): Selling the Passion? 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 La Martina (B): Selling the Passion? 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 La Martina (B): Selling the Passion? 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 La Martina (B): Selling the Passion? 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 Polo Fashion needs to make to build a sustainable competitive advantage.
