Coco Chanel: Creating Fashion for the Modern Woman (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Coco Chanel: Creating Fashion for the Modern Woman (A)
Chanel, the iconic haute couture house, founded by Gabrielle "Coco" Chanel in 1913, came to embody its founder's philosophy, taste, and style and set a distinctive and influential tone for women's fashion. Coming to prominence during the height of cultural modernity in the 1920s and 1930s, Chanel's designs wrapped high and low cultural references into beautiful yet practical clothing and jewelry for women of Europe and the Americas. In their articulation of clean, classic lines, her designs set a standard for women's fashion and clothing, relevant from 1910 through to the 1960s. She created several iconic but understated staples of many women's wardrobes, such as her signature cardigan and suit, the quilted handbag with a chain-link strap, which left its wearer's hands free, and "the little black dress," all of which continue to be part of women's wardrobes today in some shape and form. Chanel died in 1971 leaving the future of the brand and its leadership uncertain.
Swot Analysis of "Coco Chanel: Creating Fashion for the Modern Woman (A)" written by Mukti Khaire, Kerry Herman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chanel Women's facing as an external strategic factors. Some of the topics covered in Coco Chanel: Creating Fashion for the Modern Woman (A) case study are - Strategic Management Strategies, Business history, Entrepreneurship, Growth strategy, Manufacturing and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Coco Chanel: Creating Fashion for the Modern Woman (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, technology disruption, increasing energy prices, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc
Introduction to SWOT Analysis of Coco Chanel: Creating Fashion for the Modern Woman (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Coco Chanel: Creating Fashion for the Modern Woman (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chanel Women's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chanel Women's 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 Coco Chanel: Creating Fashion for the Modern Woman (A) can be done for the following purposes –
1. Strategic planning using facts provided in Coco Chanel: Creating Fashion for the Modern Woman (A) case study
2. Improving business portfolio management of Chanel Women's
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 Chanel Women's
Strengths Coco Chanel: Creating Fashion for the Modern Woman (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chanel Women's in Coco Chanel: Creating Fashion for the Modern Woman (A) Harvard Business Review case study are -
Organizational Resilience of Chanel Women's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chanel Women's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Chanel Women's is one of the leading recruiters in the industry. Managers in the Coco Chanel: Creating Fashion for the Modern Woman (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Chanel Women's 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 Chanel Women's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Coco Chanel: Creating Fashion for the Modern Woman (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Chanel Women's in the sector have low bargaining power. Coco Chanel: Creating Fashion for the Modern Woman (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chanel Women's to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Chanel Women's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Chanel Women's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Chanel Women's 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 Coco Chanel: Creating Fashion for the Modern Woman (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Chanel Women's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Coco Chanel: Creating Fashion for the Modern Woman (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Chanel Women's 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.
Innovation driven organization
– Chanel Women's is one of the most innovative firm in sector. Manager in Coco Chanel: Creating Fashion for the Modern Woman (A) 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
– Chanel Women's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chanel Women's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Coco Chanel: Creating Fashion for the Modern Woman (A) firm has clearly differentiated products in the market place. This has enabled Chanel Women's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Chanel Women's to invest into research and development (R&D) and innovation.
Weaknesses Coco Chanel: Creating Fashion for the Modern Woman (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coco Chanel: Creating Fashion for the Modern Woman (A) are -
Slow to strategic competitive environment developments
– As Coco Chanel: Creating Fashion for the Modern Woman (A) HBR case study mentions - Chanel Women's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Chanel Women's has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Coco Chanel: Creating Fashion for the Modern Woman (A), in the dynamic environment Chanel Women's has struggled to respond to the nimble upstart competition. Chanel Women's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Coco Chanel: Creating Fashion for the Modern Woman (A) can leverage the sales team experience to cultivate customer relationships as Chanel Women's is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Chanel Women's 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. Chanel Women's 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.
Low market penetration in new markets
– Outside its home market of Chanel Women's, firm in the HBR case study Coco Chanel: Creating Fashion for the Modern Woman (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Coco Chanel: Creating Fashion for the Modern Woman (A), is just above the industry average. Chanel Women's 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.
Lack of clear differentiation of Chanel Women's products
– To increase the profitability and margins on the products, Chanel Women's needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Chanel Women's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Chanel Women's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chanel Women's to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Chanel Women's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chanel Women's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Coco Chanel: Creating Fashion for the Modern Woman (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Coco Chanel: Creating Fashion for the Modern Woman (A) | 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 Coco Chanel: Creating Fashion for the Modern Woman (A) are -
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. Chanel Women's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Chanel Women's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chanel Women's 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.
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 Chanel Women's in the consumer business. Now Chanel Women's can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Chanel Women's 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.
Creating value in data economy
– The success of analytics program of Chanel Women's has opened avenues for new revenue streams for the organization in the industry. This can help Chanel Women's to build a more holistic ecosystem as suggested in the Coco Chanel: Creating Fashion for the Modern Woman (A) case study. Chanel Women's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Chanel Women's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chanel Women's can use these opportunities to build new business models that can help the communities that Chanel Women's operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chanel Women's 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, Coco Chanel: Creating Fashion for the Modern Woman (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chanel Women's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chanel Women's is facing challenges because of the dominance of functional experts in the organization. Coco Chanel: Creating Fashion for the Modern Woman (A) 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.
Building a culture of innovation
– managers at Chanel Women's 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.
Better consumer reach
– The expansion of the 5G network will help Chanel Women's to increase its market reach. Chanel Women's 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.
Threats Coco Chanel: Creating Fashion for the Modern Woman (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Coco Chanel: Creating Fashion for the Modern Woman (A) are -
Increasing wage structure of Chanel Women's
– 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 Chanel Women's.
High dependence on third party suppliers
– Chanel Women's 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.
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 Chanel Women's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chanel Women's 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 Coco Chanel: Creating Fashion for the Modern Woman (A) .
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. Chanel Women's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Chanel Women's 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.
Consumer confidence and its impact on Chanel Women's 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
– Chanel Women's 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. Chanel Women's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Coco Chanel: Creating Fashion for the Modern Woman (A), Chanel Women's 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 .
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 Chanel Women's business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Chanel Women's 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.
Regulatory challenges
– Chanel Women's 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 Innovation & Entrepreneurship industry regulations.
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. Chanel Women's 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 Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Coco Chanel: Creating Fashion for the Modern Woman (A) 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 Chanel Women's needs to make to build a sustainable competitive advantage.
