REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry
Many companies view financial variables independently from ecological and social variables. Is it possible to hold one's organization equally accountable for financial performance and social responsibility? This field-based case is suitable for MBA and undergraduate courses or modules in sustainability and innovation, ethics, and corporate social responsibility. For REI, an outdoor gear and apparel manufacturer, the challenge lies in how to expand sustainability awareness through consensus building across the organization and with outside collaborators. As it designs a new strategic framework for the operations footprint, the company seeks to adopt a corporate strategy on product stewardship and adapt its philanthropy strategy around sustainability objectives.
Swot Analysis of "REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry" written by Andrea Larson, Mark Meier includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rei Sustainability facing as an external strategic factors. Some of the topics covered in REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry case study are - Strategic Management Strategies, Entrepreneurship, Innovation and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing energy prices, increasing transportation and logistics costs, technology disruption, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rei Sustainability, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rei Sustainability 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry can be done for the following purposes –
1. Strategic planning using facts provided in REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry case study
2. Improving business portfolio management of Rei Sustainability
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 Rei Sustainability
Strengths REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rei Sustainability in REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry Harvard Business Review case study are -
Analytics focus
– Rei Sustainability 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 Andrea Larson, Mark Meier 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.
Ability to recruit top talent
– Rei Sustainability is one of the leading recruiters in the industry. Managers in the REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Rei Sustainability 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.
Strong track record of project management
– Rei Sustainability is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Rei Sustainability 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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.
Superior customer experience
– The customer experience strategy of Rei Sustainability in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Rei Sustainability has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rei Sustainability 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Rei Sustainability digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rei Sustainability 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry firm has clearly differentiated products in the market place. This has enabled Rei Sustainability to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Rei Sustainability to invest into research and development (R&D) and innovation.
High brand equity
– Rei Sustainability has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rei Sustainability to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Rei Sustainability in the sector have low bargaining power. REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rei Sustainability to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry, is just above the industry average. Rei Sustainability 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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 Rei Sustainability 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Increasing silos among functional specialists
– The organizational structure of Rei Sustainability is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Rei Sustainability needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rei Sustainability to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Rei Sustainability 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.
Products dominated business model
– Even though Rei Sustainability 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 - REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Rei Sustainability 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.
Slow decision making process
– As mentioned earlier in the report, Rei Sustainability 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. Rei Sustainability 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.
High cash cycle compare to competitors
Rei Sustainability has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry, it seems that the employees of Rei Sustainability don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry, in the dynamic environment Rei Sustainability has struggled to respond to the nimble upstart competition. Rei Sustainability has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry | 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry are -
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 Rei Sustainability 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.
Creating value in data economy
– The success of analytics program of Rei Sustainability has opened avenues for new revenue streams for the organization in the industry. This can help Rei Sustainability to build a more holistic ecosystem as suggested in the REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry case study. Rei Sustainability can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Rei Sustainability 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.
Manufacturing automation
– Rei Sustainability 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rei Sustainability can use these opportunities to build new business models that can help the communities that Rei Sustainability operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Rei Sustainability can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rei Sustainability 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 Rei Sustainability to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Rei Sustainability to increase its market reach. Rei Sustainability 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rei Sustainability 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rei Sustainability 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, REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Rei Sustainability can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Rei Sustainability can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Rei Sustainability 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rei Sustainability to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry are -
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
– Rei Sustainability 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.
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 Rei Sustainability in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 Rei Sustainability 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.
Technology acceleration in Forth Industrial Revolution
– Rei Sustainability has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Rei Sustainability needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Rei Sustainability is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Rei Sustainability
– 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 Rei Sustainability.
Stagnating economy with rate increase
– Rei Sustainability 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.
Environmental challenges
– Rei Sustainability 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. Rei Sustainability can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rei Sustainability with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rei Sustainability 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Rei Sustainability 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.
Weighted SWOT Analysis of REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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 REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry 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 Rei Sustainability needs to make to build a sustainable competitive advantage.
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