Warby Parker: Vision of a "Good" Fashion Brand SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Warby Parker: Vision of a "Good" Fashion Brand
To maximize their effectiveness, color cases should be printed in color.In its third year of existence and poised to double its workforce, Warby Parker attributed its success to an innovative approach in the eyewear industry and to the company culture that supported it. With a mission combining social and business goals, the company had articulated a stakeholder-centric model that benefited consumers through high-quality, fashionable, and affordable eyewear: the global community by donating, through sustainable channels, one pair of glasses per every pair sold; employees through a fun culture and inspiring work; and the environment, by becoming carbon neutral. The case covers the decisions that Warby Parker must make at the beginning of its third year of existence as a consequence of growth and in order to avoid losing momentum. Some of the challenges that Warby Parker faced were maintaining the company culture, finding adequate partners to preserve the quality of the "Buy a Pair, Give a Pair" program, and devising an integrated online and offline marketing strategy that fit the brand personality.
Swot Analysis of "Warby Parker: Vision of a "Good" Fashion Brand" written by Christopher Marquis, Laura Velez Villa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Warby Pair facing as an external strategic factors. Some of the topics covered in Warby Parker: Vision of a "Good" Fashion Brand case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Health, Innovation, Organizational culture, Social responsibility and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Warby Parker: Vision of a "Good" Fashion Brand casestudy better are - – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, wage bills are increasing, talent flight as more people leaving formal jobs, increasing energy prices, central banks are concerned over increasing inflation,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Warby Parker: Vision of a "Good" Fashion Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Warby Parker: Vision of a "Good" Fashion Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Warby Pair, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Warby Pair 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 Warby Parker: Vision of a "Good" Fashion Brand can be done for the following purposes –
1. Strategic planning using facts provided in Warby Parker: Vision of a "Good" Fashion Brand case study
2. Improving business portfolio management of Warby Pair
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Warby Pair
Strengths Warby Parker: Vision of a "Good" Fashion Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Warby Pair in Warby Parker: Vision of a "Good" Fashion Brand Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Warby Pair 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.
Training and development
– Warby Pair has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Warby Parker: Vision of a "Good" Fashion Brand Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Warby Parker: Vision of a "Good" Fashion Brand firm has clearly differentiated products in the market place. This has enabled Warby Pair to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Warby Pair to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Warby Parker: Vision of a "Good" Fashion Brand 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.
Ability to lead change in Innovation & Entrepreneurship field
– Warby Pair 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 Warby Pair in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Warby Pair
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Warby Pair does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Warby Pair digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Warby Pair has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Warby Pair has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Warby Pair 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 switching costs
– The high switching costs that Warby Pair 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.
Highly skilled collaborators
– Warby Pair 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 Warby Parker: Vision of a "Good" Fashion Brand HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Warby Pair 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 Warby Parker: Vision of a "Good" Fashion Brand - 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 brand equity
– Warby Pair has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Warby Pair to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Warby Parker: Vision of a "Good" Fashion Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Warby Parker: Vision of a "Good" Fashion Brand are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Warby Parker: Vision of a "Good" Fashion Brand, is just above the industry average. Warby Pair 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 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 Warby Pair supply chain. Even after few cautionary changes mentioned in the HBR case study - Warby Parker: Vision of a "Good" Fashion Brand, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Warby Pair vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Warby Pair is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Warby Pair needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Warby Pair to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Warby Pair 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. Warby Pair 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.
Interest costs
– Compare to the competition, Warby Pair 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.
Lack of clear differentiation of Warby Pair products
– To increase the profitability and margins on the products, Warby Pair needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Pair 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Warby Pair needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Warby Pair 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Pair has relatively successful track record of launching new products.
Need for greater diversity
– Warby Pair 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 Warby Parker: Vision of a "Good" Fashion Brand | 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 Warby Parker: Vision of a "Good" Fashion Brand are -
Building a culture of innovation
– managers at Warby Pair 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 Innovation & Entrepreneurship segment.
Manufacturing automation
– Warby Pair can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Better consumer reach
– The expansion of the 5G network will help Warby Pair to increase its market reach. Warby Pair 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.
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 Warby Pair in the consumer business. Now Warby Pair can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Warby Pair in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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 Warby Pair 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Warby Pair 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, Warby Parker: Vision of a "Good" Fashion Brand, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Warby Pair 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. Warby Pair 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.
Leveraging digital technologies
– Warby Pair 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.
Developing new processes and practices
– Warby Pair can develop new processes and procedures in Innovation & Entrepreneurship 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Warby Pair 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Warby Pair 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 Warby Pair to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Warby Pair 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 Warby Parker: Vision of a "Good" Fashion Brand - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Warby Pair to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Warby Parker: Vision of a "Good" Fashion Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Pair.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Warby Pair 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 Warby Parker: Vision of a "Good" Fashion Brand .
Consumer confidence and its impact on Warby Pair 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Warby Pair with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Stagnating economy with rate increase
– Warby Pair can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Warby Pair can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Warby Pair in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Warby Pair is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Warby Pair in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Warby Parker: Vision of a "Good" Fashion Brand, Warby Pair may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
High dependence on third party suppliers
– Warby Pair 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.
Weighted SWOT Analysis of Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Parker: Vision of a "Good" Fashion Brand 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 Warby Pair needs to make to build a sustainable competitive advantage.