Swot Analysis of "Grupo Garantia (C) Lojas Americanas SA: The Retail Chain" written by R. Jeffrey Ellis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Americanas Lojas facing as an external strategic factors. Some of the topics covered in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study are - Strategic Management Strategies, Economy, Emerging markets, Globalization, Joint ventures and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain casestudy better are - – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Grupo Garantia (C) Lojas Americanas SA: The Retail Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Americanas Lojas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain can be done for the following purposes –
1. Strategic planning using facts provided in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study
2. Improving business portfolio management of Americanas Lojas
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Americanas Lojas
Strengths Grupo Garantia (C) Lojas Americanas SA: The Retail Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Americanas Lojas in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain Harvard Business Review case study are -
Analytics focus
– Americanas Lojas 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 R. Jeffrey Ellis 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.
Superior customer experience
– The customer experience strategy of Americanas Lojas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Americanas Lojas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Americanas Lojas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Americanas Lojas is one of the most innovative firm in sector. Manager in Grupo Garantia (C) Lojas Americanas SA: The Retail Chain Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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.
Strong track record of project management
– Americanas Lojas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Americanas Lojas in the sector have low bargaining power. Grupo Garantia (C) Lojas Americanas SA: The Retail Chain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Americanas Lojas to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Americanas Lojas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Americanas Lojas 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.
Cross disciplinary teams
– Horizontal connected teams at the Americanas Lojas 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Grupo Garantia (C) Lojas Americanas SA: The Retail Chain firm has clearly differentiated products in the market place. This has enabled Americanas Lojas to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Americanas Lojas to invest into research and development (R&D) and innovation.
Organizational Resilience of Americanas Lojas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Americanas Lojas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Grupo Garantia (C) Lojas Americanas SA: The Retail Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grupo Garantia (C) Lojas Americanas SA: The Retail Chain are -
High cash cycle compare to competitors
Americanas Lojas 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Americanas Lojas has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Americanas Lojas is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Americanas Lojas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Americanas Lojas to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Americanas Lojas 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain, is just above the industry average. Americanas Lojas 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.
Low market penetration in new markets
– Outside its home market of Americanas Lojas, firm in the HBR case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Americanas Lojas 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 - Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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, Americanas Lojas 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.
Aligning sales with marketing
– It come across in the case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain can leverage the sales team experience to cultivate customer relationships as Americanas Lojas is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Americanas Lojas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Americanas Lojas 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.
Opportunities Grupo Garantia (C) Lojas Americanas SA: The Retail Chain | 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain are -
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 Americanas Lojas in the consumer business. Now Americanas Lojas can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Americanas Lojas 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Americanas Lojas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Americanas Lojas in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting 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 Americanas Lojas 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.
Better consumer reach
– The expansion of the 5G network will help Americanas Lojas to increase its market reach. Americanas Lojas 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Americanas Lojas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Americanas Lojas has opened avenues for new revenue streams for the organization in the industry. This can help Americanas Lojas to build a more holistic ecosystem as suggested in the Grupo Garantia (C) Lojas Americanas SA: The Retail Chain case study. Americanas Lojas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Americanas Lojas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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.
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. Americanas Lojas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Americanas Lojas can develop new processes and procedures in Finance & Accounting 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Americanas Lojas is facing challenges because of the dominance of functional experts in the organization. Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Americanas Lojas 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 Finance & Accounting segment.
Threats Grupo Garantia (C) Lojas Americanas SA: The Retail Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain are -
Consumer confidence and its impact on Americanas Lojas 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.
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 Americanas Lojas.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Americanas Lojas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Grupo Garantia (C) Lojas Americanas SA: The Retail Chain, Americanas Lojas may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Environmental challenges
– Americanas Lojas 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. Americanas Lojas can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Americanas Lojas has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Americanas Lojas needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Americanas Lojas in the Finance & Accounting sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Americanas Lojas can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Americanas Lojas 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.
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. Americanas Lojas 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.
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. Americanas Lojas needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Americanas Lojas 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain .
Weighted SWOT Analysis of Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Grupo Garantia (C) Lojas Americanas SA: The Retail Chain 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 Americanas Lojas needs to make to build a sustainable competitive advantage.
