Swot Analysis of "Italy: The Good, the Bad and the Ugly" written by Dante Roscini, Richard H.K. Vietor, Hilary White includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ugly Italy facing as an external strategic factors. Some of the topics covered in Italy: The Good, the Bad and the Ugly case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Italy: The Good, the Bad and the Ugly casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, increasing commodity prices, increasing energy prices, there is backlash against globalization, challanges to central banks by blockchain based private currencies, technology disruption,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Italy: The Good, the Bad and the Ugly
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Italy: The Good, the Bad and the Ugly case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ugly Italy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ugly Italy 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 Italy: The Good, the Bad and the Ugly can be done for the following purposes –
1. Strategic planning using facts provided in Italy: The Good, the Bad and the Ugly case study
2. Improving business portfolio management of Ugly Italy
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 Ugly Italy
Strengths Italy: The Good, the Bad and the Ugly | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ugly Italy in Italy: The Good, the Bad and the Ugly Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Italy: The Good, the Bad and the Ugly Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Ugly Italy 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.
Learning organization
- Ugly Italy 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 Ugly Italy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Italy: The Good, the Bad and the Ugly Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Ugly Italy is one of the leading recruiters in the industry. Managers in the Italy: The Good, the Bad and the Ugly are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Ugly Italy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Ugly Italy is one of the most innovative firm in sector. Manager in Italy: The Good, the Bad and the Ugly Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Ugly Italy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ugly Italy 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.
Organizational Resilience of Ugly Italy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ugly Italy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Ugly Italy 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 Ugly Italy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– Italy: The Good, the Bad and the Ugly firm has clearly differentiated products in the market place. This has enabled Ugly Italy to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ugly Italy to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Ugly Italy in the sector have low bargaining power. Italy: The Good, the Bad and the Ugly has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ugly Italy to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Ugly Italy 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.
Weaknesses Italy: The Good, the Bad and the Ugly | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Italy: The Good, the Bad and the Ugly are -
Lack of clear differentiation of Ugly Italy products
– To increase the profitability and margins on the products, Ugly Italy needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Ugly Italy 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 - Italy: The Good, the Bad and the Ugly should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Italy: The Good, the Bad and the Ugly 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 Italy: The Good, the Bad and the Ugly can leverage the sales team experience to cultivate customer relationships as Ugly Italy is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Ugly Italy 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.
Low market penetration in new markets
– Outside its home market of Ugly Italy, firm in the HBR case study Italy: The Good, the Bad and the Ugly needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Ugly Italy supply chain. Even after few cautionary changes mentioned in the HBR case study - Italy: The Good, the Bad and the Ugly, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ugly Italy vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Italy: The Good, the Bad and the Ugly 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 Ugly Italy has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Ugly Italy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ugly Italy even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Ugly Italy 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.
Interest costs
– Compare to the competition, Ugly Italy 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Italy: The Good, the Bad and the Ugly 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 Ugly Italy 's lucrative customers.
Opportunities Italy: The Good, the Bad and the Ugly | 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 Italy: The Good, the Bad and the Ugly are -
Building a culture of innovation
– managers at Ugly Italy 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.
Better consumer reach
– The expansion of the 5G network will help Ugly Italy to increase its market reach. Ugly Italy 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.
Creating value in data economy
– The success of analytics program of Ugly Italy has opened avenues for new revenue streams for the organization in the industry. This can help Ugly Italy to build a more holistic ecosystem as suggested in the Italy: The Good, the Bad and the Ugly case study. Ugly Italy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Ugly Italy 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.
Developing new processes and practices
– Ugly Italy 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.
Loyalty marketing
– Ugly Italy has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ugly Italy is facing challenges because of the dominance of functional experts in the organization. Italy: The Good, the Bad and the Ugly 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.
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. Ugly Italy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Ugly Italy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Ugly Italy 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.
Learning at scale
– Online learning technologies has now opened space for Ugly Italy 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.
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 Ugly Italy in the consumer business. Now Ugly Italy can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ugly Italy 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, Italy: The Good, the Bad and the Ugly, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Italy: The Good, the Bad and the Ugly External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Italy: The Good, the Bad and the Ugly are -
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 Ugly Italy.
Stagnating economy with rate increase
– Ugly Italy 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 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. Ugly Italy needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ugly Italy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Italy: The Good, the Bad and the Ugly, Ugly Italy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Consumer confidence and its impact on Ugly Italy 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.
Environmental challenges
– Ugly Italy 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. Ugly Italy can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ugly Italy 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 Italy: The Good, the Bad and the Ugly .
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. Ugly Italy 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.
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.
High dependence on third party suppliers
– Ugly Italy 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ugly Italy 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.
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. Ugly Italy 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 Italy: The Good, the Bad and the Ugly 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 Italy: The Good, the Bad and the Ugly 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 Italy: The Good, the Bad and the Ugly 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 Italy: The Good, the Bad and the Ugly 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 Italy: The Good, the Bad and the Ugly 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 Ugly Italy needs to make to build a sustainable competitive advantage.
