Prochnik: Privatization of a Polish Clothing Manufacturer SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Prochnik: Privatization of a Polish Clothing Manufacturer
Prochnik was a large state-owned clothing manufacturer located in the textile-production-intensive region of Lodz, Poland. In the early months of economic reform, Prochnik was one of the first five state enterprises to be privatized through initial public offerings and traded on the Warsaw Stock Exchange. The case describes the array of changes necessary to transform Prochnik into an internationally competitive private enterprise.
Swot Analysis of "Prochnik: Privatization of a Polish Clothing Manufacturer" written by Gary W. Loveman, David T. Kotchen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Prochnik Clothing facing as an external strategic factors. Some of the topics covered in Prochnik: Privatization of a Polish Clothing Manufacturer case study are - Strategic Management Strategies, Government, Reorganization and Global Business.
Some of the macro environment factors that can be used to understand the Prochnik: Privatization of a Polish Clothing Manufacturer casestudy better are - – increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, there is backlash against globalization, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Prochnik: Privatization of a Polish Clothing Manufacturer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Prochnik: Privatization of a Polish Clothing Manufacturer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Prochnik Clothing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Prochnik Clothing 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 Prochnik: Privatization of a Polish Clothing Manufacturer can be done for the following purposes –
1. Strategic planning using facts provided in Prochnik: Privatization of a Polish Clothing Manufacturer case study
2. Improving business portfolio management of Prochnik Clothing
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 Prochnik Clothing
Strengths Prochnik: Privatization of a Polish Clothing Manufacturer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Prochnik Clothing in Prochnik: Privatization of a Polish Clothing Manufacturer Harvard Business Review case study are -
Strong track record of project management
– Prochnik Clothing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Prochnik Clothing is one of the leading recruiters in the industry. Managers in the Prochnik: Privatization of a Polish Clothing Manufacturer 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
– Prochnik Clothing is present in almost all the verticals within the industry. This has provided firm in Prochnik: Privatization of a Polish Clothing Manufacturer 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.
Superior customer experience
– The customer experience strategy of Prochnik Clothing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Prochnik Clothing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Prochnik Clothing 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.
High brand equity
– Prochnik Clothing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Prochnik Clothing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Prochnik Clothing 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 Prochnik: Privatization of a Polish Clothing Manufacturer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Prochnik Clothing 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 Prochnik: Privatization of a Polish Clothing Manufacturer - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Prochnik Clothing 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 Prochnik Clothing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Prochnik: Privatization of a Polish Clothing Manufacturer Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Prochnik Clothing 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.
Organizational Resilience of Prochnik Clothing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Prochnik Clothing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Prochnik Clothing 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 Gary W. Loveman, David T. Kotchen 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.
Weaknesses Prochnik: Privatization of a Polish Clothing Manufacturer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Prochnik: Privatization of a Polish Clothing Manufacturer are -
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 Prochnik Clothing supply chain. Even after few cautionary changes mentioned in the HBR case study - Prochnik: Privatization of a Polish Clothing Manufacturer, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Prochnik Clothing vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Prochnik: Privatization of a Polish Clothing Manufacturer, it seems that the employees of Prochnik Clothing 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.
Slow to strategic competitive environment developments
– As Prochnik: Privatization of a Polish Clothing Manufacturer HBR case study mentions - Prochnik Clothing 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.
No frontier risks strategy
– After analyzing the HBR case study Prochnik: Privatization of a Polish Clothing Manufacturer, 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik Clothing has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik Clothing 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Prochnik Clothing has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Prochnik Clothing is dominated by functional specialists. It is not different from other players in the Global Business segment. Prochnik Clothing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Prochnik Clothing to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Prochnik Clothing 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.
Products dominated business model
– Even though Prochnik Clothing 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 - Prochnik: Privatization of a Polish Clothing Manufacturer should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Prochnik Clothing 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.
Opportunities Prochnik: Privatization of a Polish Clothing Manufacturer | 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 Prochnik: Privatization of a Polish Clothing Manufacturer are -
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. Prochnik Clothing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Prochnik Clothing is facing challenges because of the dominance of functional experts in the organization. Prochnik: Privatization of a Polish Clothing Manufacturer 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.
Buying journey improvements
– Prochnik Clothing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Prochnik: Privatization of a Polish Clothing Manufacturer suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Developing new processes and practices
– Prochnik Clothing 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.
Creating value in data economy
– The success of analytics program of Prochnik Clothing has opened avenues for new revenue streams for the organization in the industry. This can help Prochnik Clothing to build a more holistic ecosystem as suggested in the Prochnik: Privatization of a Polish Clothing Manufacturer case study. Prochnik Clothing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Prochnik Clothing to increase its market reach. Prochnik Clothing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Prochnik Clothing 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 Prochnik Clothing to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Prochnik Clothing 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.
Leveraging digital technologies
– Prochnik Clothing 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.
Using analytics as competitive advantage
– Prochnik Clothing 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 Prochnik: Privatization of a Polish Clothing Manufacturer - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Prochnik Clothing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Prochnik Clothing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Prochnik Clothing 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, Prochnik: Privatization of a Polish Clothing Manufacturer, 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, Prochnik Clothing can use these opportunities to build new business models that can help the communities that Prochnik Clothing operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Prochnik: Privatization of a Polish Clothing Manufacturer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Prochnik: Privatization of a Polish Clothing Manufacturer are -
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 Prochnik Clothing in the Global Business sector and impact the bottomline 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 Prochnik Clothing 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.
Technology acceleration in Forth Industrial Revolution
– Prochnik Clothing has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Prochnik Clothing 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.
Increasing wage structure of Prochnik Clothing
– 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 Prochnik Clothing.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Prochnik Clothing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Prochnik Clothing 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. Prochnik Clothing can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Prochnik Clothing 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. Prochnik Clothing needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Prochnik Clothing 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 Prochnik: Privatization of a Polish Clothing Manufacturer .
Stagnating economy with rate increase
– Prochnik Clothing 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.
High dependence on third party suppliers
– Prochnik Clothing 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.
Regulatory challenges
– Prochnik Clothing 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.
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 Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik: Privatization of a Polish Clothing Manufacturer 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 Prochnik Clothing needs to make to build a sustainable competitive advantage.