The case describes how AMF Snaps, a supplier of fastenings for the premium clothes market, has risen to become one of Europe's leading and most innovative snaps companies. From the first collection in 1996, designed by founder Andreas Faerber with the help of some friends using simple computer graphic tools, by 2007 the workforce had increased from four people to 70, with annual sales of 50 million snaps. Unwavering in his belief that the relationship with the customer is key to success, in 2007 Faerber was faced with a dilemma. Survey results revealed a gap between what employees perceived to be the company's strong points and what its clients considered them to be. It also uncovered a weak point in the snap supplying process: the outsourced manufacturing of the snaps. .
Authors :: Anne-Marie Carrick, Baptiste Lebreton, Luk Van Wassenhove
Swot Analysis of "A.M.F. snaps" written by Anne-Marie Carrick, Baptiste Lebreton, Luk Van Wassenhove includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Snaps Faerber facing as an external strategic factors. Some of the topics covered in A.M.F. snaps case study are - Strategic Management Strategies, Mergers & acquisitions, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the A.M.F. snaps casestudy better are - – geopolitical disruptions, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A.M.F. snaps case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Snaps Faerber, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Snaps Faerber 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 A.M.F. snaps can be done for the following purposes –
1. Strategic planning using facts provided in A.M.F. snaps case study
2. Improving business portfolio management of Snaps Faerber
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Snaps Faerber
Strengths A.M.F. snaps | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Snaps Faerber in A.M.F. snaps Harvard Business Review case study are -
Successful track record of launching new products
– Snaps Faerber has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Snaps Faerber 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.
Low bargaining power of suppliers
– Suppliers of Snaps Faerber in the sector have low bargaining power. A.M.F. snaps has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Snaps Faerber to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Snaps Faerber 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 Anne-Marie Carrick, Baptiste Lebreton, Luk Van Wassenhove 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.
High brand equity
– Snaps Faerber has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Snaps Faerber to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Snaps Faerber digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Snaps Faerber 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.
Effective Research and Development (R&D)
– Snaps Faerber 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 A.M.F. snaps - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Snaps Faerber
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Snaps Faerber does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Snaps Faerber 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 Snaps Faerber is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in A.M.F. snaps Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Leadership & Managing People industry
– A.M.F. snaps firm has clearly differentiated products in the market place. This has enabled Snaps Faerber to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Snaps Faerber to invest into research and development (R&D) and innovation.
Training and development
– Snaps Faerber has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in A.M.F. snaps 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.
Superior customer experience
– The customer experience strategy of Snaps Faerber in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Snaps Faerber 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 A.M.F. snaps HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses A.M.F. snaps | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A.M.F. snaps are -
Slow to strategic competitive environment developments
– As A.M.F. snaps HBR case study mentions - Snaps Faerber 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.
Low market penetration in new markets
– Outside its home market of Snaps Faerber, firm in the HBR case study A.M.F. snaps needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Snaps Faerber 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. Snaps Faerber 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 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 Snaps Faerber supply chain. Even after few cautionary changes mentioned in the HBR case study - A.M.F. snaps, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Snaps Faerber vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Snaps Faerber 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.
Skills based hiring
– The stress on hiring functional specialists at Snaps Faerber 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, Anne-Marie Carrick, Baptiste Lebreton, Luk Van Wassenhove suggests that, Snaps Faerber 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Snaps Faerber is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study A.M.F. snaps can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study A.M.F. snaps, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Snaps Faerber 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study A.M.F. snaps, in the dynamic environment Snaps Faerber has struggled to respond to the nimble upstart competition. Snaps Faerber has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities A.M.F. snaps | 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 A.M.F. snaps are -
Using analytics as competitive advantage
– Snaps Faerber 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 A.M.F. snaps - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Snaps Faerber to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Snaps Faerber can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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. Snaps Faerber can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Snaps Faerber can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Snaps Faerber 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. Snaps Faerber 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.
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 Snaps Faerber in the consumer business. Now Snaps Faerber can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Snaps Faerber 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 Leadership & Managing People segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Snaps Faerber can use these opportunities to build new business models that can help the communities that Snaps Faerber operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Snaps Faerber can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Snaps Faerber 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.
Developing new processes and practices
– Snaps Faerber can develop new processes and procedures in Leadership & Managing People 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Snaps Faerber 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, A.M.F. snaps, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Snaps Faerber has opened avenues for new revenue streams for the organization in the industry. This can help Snaps Faerber to build a more holistic ecosystem as suggested in the A.M.F. snaps case study. Snaps Faerber can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats A.M.F. snaps External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A.M.F. snaps are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A.M.F. snaps, Snaps Faerber may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Snaps Faerber needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Snaps Faerber 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 Snaps Faerber in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Snaps Faerber 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Snaps Faerber in the Leadership & Managing People industry. The Leadership & Managing People 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Snaps Faerber 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 A.M.F. snaps .
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.
Consumer confidence and its impact on Snaps Faerber 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
– Snaps Faerber 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. Snaps Faerber can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Snaps Faerber
– 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 Snaps Faerber.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Snaps Faerber with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Snaps Faerber 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.
Weighted SWOT Analysis of A.M.F. snaps 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 A.M.F. snaps 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 A.M.F. snaps 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 A.M.F. snaps 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 A.M.F. snaps 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 Snaps Faerber needs to make to build a sustainable competitive advantage.