Cooperating to Compete: EGS of Turkey SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cooperating to Compete: EGS of Turkey
In the early 1980s, Turkey adopted policies that liberalized trade as a part of a structural adjustment program. Within the garment industry, small- and medium-scale enterprises were not well positioned to take advantage of the new opportunities to compete in international markets. In order to overcome challenges in marketing, obtaining financing, and negotiating with government trade officials, competitors came together to form Ege Giyim Sanayi ve Dis Ticaret A.S. (EGS). EGS's rapid expansion forced it to face crucial questions about both its governance structure and future diversification opportunities.
Swot Analysis of "Cooperating to Compete: EGS of Turkey" written by Pankaj Ghemawat, C. Fritz Foley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Egs Turkey facing as an external strategic factors. Some of the topics covered in Cooperating to Compete: EGS of Turkey case study are - Strategic Management Strategies, Corporate governance, Growth strategy, International business, Organizational structure, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Cooperating to Compete: EGS of Turkey casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Cooperating to Compete: EGS of Turkey
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cooperating to Compete: EGS of Turkey case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Egs Turkey, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Egs Turkey 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 Cooperating to Compete: EGS of Turkey can be done for the following purposes –
1. Strategic planning using facts provided in Cooperating to Compete: EGS of Turkey case study
2. Improving business portfolio management of Egs Turkey
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 Egs Turkey
Strengths Cooperating to Compete: EGS of Turkey | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Egs Turkey in Cooperating to Compete: EGS of Turkey Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Egs Turkey in the sector have low bargaining power. Cooperating to Compete: EGS of Turkey has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Egs Turkey to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Egs Turkey 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 Egs Turkey is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cooperating to Compete: EGS of Turkey Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Egs Turkey has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Egs Turkey to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Egs Turkey 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.
Analytics focus
– Egs Turkey 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 Pankaj Ghemawat, C. Fritz Foley 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.
Ability to recruit top talent
– Egs Turkey is one of the leading recruiters in the industry. Managers in the Cooperating to Compete: EGS of Turkey are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Egs Turkey has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Egs Turkey 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.
Sustainable margins compare to other players in Global Business industry
– Cooperating to Compete: EGS of Turkey firm has clearly differentiated products in the market place. This has enabled Egs Turkey to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Egs Turkey to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Egs Turkey 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.
Effective Research and Development (R&D)
– Egs Turkey 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 Cooperating to Compete: EGS of Turkey - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Global Business field
– Egs Turkey 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 Egs Turkey in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Egs Turkey is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Cooperating to Compete: EGS of Turkey | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cooperating to Compete: EGS of Turkey are -
High bargaining power of channel partners
– Because of the regulatory requirements, Pankaj Ghemawat, C. Fritz Foley suggests that, Egs Turkey 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.
Need for greater diversity
– Egs Turkey 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.
Increasing silos among functional specialists
– The organizational structure of Egs Turkey is dominated by functional specialists. It is not different from other players in the Global Business segment. Egs Turkey needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Egs Turkey to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cooperating to Compete: EGS of Turkey 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 Egs Turkey has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Egs Turkey 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.
No frontier risks strategy
– After analyzing the HBR case study Cooperating to Compete: EGS of Turkey, 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 to strategic competitive environment developments
– As Cooperating to Compete: EGS of Turkey HBR case study mentions - Egs Turkey 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.
Aligning sales with marketing
– It come across in the case study Cooperating to Compete: EGS of Turkey 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 Cooperating to Compete: EGS of Turkey can leverage the sales team experience to cultivate customer relationships as Egs Turkey is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cooperating to Compete: EGS of Turkey, it seems that the employees of Egs Turkey 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.
Products dominated business model
– Even though Egs Turkey 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 - Cooperating to Compete: EGS of Turkey should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Egs Turkey products
– To increase the profitability and margins on the products, Egs Turkey needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Cooperating to Compete: EGS of Turkey | 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 Cooperating to Compete: EGS of Turkey are -
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. Egs Turkey 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. Egs Turkey 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.
Manufacturing automation
– Egs Turkey 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.
Learning at scale
– Online learning technologies has now opened space for Egs Turkey 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Egs Turkey can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Egs Turkey 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 Cooperating to Compete: EGS of Turkey - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Egs Turkey to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Egs Turkey is facing challenges because of the dominance of functional experts in the organization. Cooperating to Compete: EGS of Turkey 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.
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 Egs Turkey 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.
Creating value in data economy
– The success of analytics program of Egs Turkey has opened avenues for new revenue streams for the organization in the industry. This can help Egs Turkey to build a more holistic ecosystem as suggested in the Cooperating to Compete: EGS of Turkey case study. Egs Turkey 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, Egs Turkey 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.
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. Egs Turkey can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Egs Turkey 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.
Better consumer reach
– The expansion of the 5G network will help Egs Turkey to increase its market reach. Egs Turkey 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.
Developing new processes and practices
– Egs Turkey 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 Cooperating to Compete: EGS of Turkey External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cooperating to Compete: EGS of Turkey are -
Technology acceleration in Forth Industrial Revolution
– Egs Turkey has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Egs Turkey 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.
Regulatory challenges
– Egs Turkey 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Egs Turkey 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 Cooperating to Compete: EGS of Turkey .
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 Egs Turkey.
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.
Environmental challenges
– Egs Turkey 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. Egs Turkey can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing wage structure of Egs Turkey
– 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 Egs Turkey.
Shortening product life cycle
– it is one of the major threat that Egs Turkey is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Egs Turkey 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.
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. Egs Turkey needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Egs Turkey 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.
Consumer confidence and its impact on Egs Turkey 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.
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. Egs Turkey can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Cooperating to Compete: EGS of Turkey 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 Cooperating to Compete: EGS of Turkey 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 Cooperating to Compete: EGS of Turkey 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 Cooperating to Compete: EGS of Turkey 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 Cooperating to Compete: EGS of Turkey 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 Egs Turkey needs to make to build a sustainable competitive advantage.