Esquel Group: Integrating Business Strategy and Corporate Social Responsibility SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility
Focuses on the experience of China's largest shirt manufacturer in managing various aspects of government relations in China. Identifies a wide variety of social initiatives it has undertaken.
Authors :: F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty
Swot Analysis of "Esquel Group: Integrating Business Strategy and Corporate Social Responsibility" written by F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Esquel Shirt facing as an external strategic factors. Some of the topics covered in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study are - Strategic Management Strategies, Government, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility casestudy better are - – increasing energy prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Esquel Shirt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Esquel Shirt operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility can be done for the following purposes –
1. Strategic planning using facts provided in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study
2. Improving business portfolio management of Esquel Shirt
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Esquel Shirt
Strengths Esquel Group: Integrating Business Strategy and Corporate Social Responsibility | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Esquel Shirt in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study are -
High brand equity
– Esquel Shirt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Esquel Shirt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Esquel Shirt is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Esquel Shirt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Esquel Shirt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Esquel Group: Integrating Business Strategy and Corporate Social Responsibility firm has clearly differentiated products in the market place. This has enabled Esquel Shirt to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Esquel Shirt to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Esquel Shirt 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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Esquel Shirt 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.
Cross disciplinary teams
– Horizontal connected teams at the Esquel Shirt 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.
Low bargaining power of suppliers
– Suppliers of Esquel Shirt in the sector have low bargaining power. Esquel Group: Integrating Business Strategy and Corporate Social Responsibility has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Esquel Shirt to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Esquel Shirt is one of the most innovative firm in sector. Manager in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Esquel Shirt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Esquel Shirt is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Esquel Shirt is present in almost all the verticals within the industry. This has provided firm in Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Esquel Group: Integrating Business Strategy and Corporate Social Responsibility | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, is just above the industry average. Esquel Shirt 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Esquel Shirt 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Esquel Group: Integrating Business Strategy and Corporate Social Responsibility HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Esquel Shirt has relatively successful track record of launching new products.
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 Esquel Shirt supply chain. Even after few cautionary changes mentioned in the HBR case study - Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Esquel Shirt vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Esquel Shirt products
– To increase the profitability and margins on the products, Esquel Shirt needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Esquel Shirt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Esquel Shirt 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. Esquel Shirt 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 Esquel Shirt 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.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, William C. Kirby, Tracy Yuen Manty suggests that, Esquel Shirt is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Esquel Shirt, firm in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Esquel Group: Integrating Business Strategy and Corporate Social Responsibility | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are -
Leveraging digital technologies
– Esquel Shirt can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Esquel Shirt can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Esquel Shirt to increase its market reach. Esquel Shirt will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Esquel Shirt 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.
Loyalty marketing
– Esquel Shirt 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.
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 Esquel Shirt 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.
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. Esquel Shirt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Esquel Shirt in the consumer business. Now Esquel Shirt can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Esquel Shirt is facing challenges because of the dominance of functional experts in the organization. Esquel Group: Integrating Business Strategy and Corporate Social Responsibility case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Esquel Shirt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Esquel Shirt to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Esquel Shirt can use these opportunities to build new business models that can help the communities that Esquel Shirt operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Esquel Shirt can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Threats Esquel Group: Integrating Business Strategy and Corporate Social Responsibility External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility are -
Regulatory challenges
– Esquel Shirt 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility, Esquel Shirt 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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Esquel Shirt business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Esquel Shirt 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.
Shortening product life cycle
– it is one of the major threat that Esquel Shirt is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Esquel Shirt
– 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 Esquel Shirt.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Esquel Shirt.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Esquel Shirt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Esquel Shirt has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Esquel Shirt needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Esquel Shirt in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Esquel Shirt 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.
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.
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 Esquel Group: Integrating Business Strategy and Corporate Social Responsibility Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Esquel Group: Integrating Business Strategy and Corporate Social Responsibility is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Esquel Group: Integrating Business Strategy and Corporate Social Responsibility is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Esquel Shirt needs to make to build a sustainable competitive advantage.