ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA
"As Luc Gerard stepped out of the plane coming from freezing cold BogotA? in October 2007, he could not help but notice the pleasant mid-summer weather in Buenos Aires. He hoped this was a good omen for the deal he was contemplating there for his young private equity company, Tribe Capital Partners (Tribeca). Strategically, Etiqueta Negra, an Argentinean fashion company, seemed a great fit for the portfolio. It was based in Latin America, Tribeca's targeted geographical playground. It fit neatly into its high-end fashion focus. The brand would also fit well alongside his recently acquired Colombia-based swimwear phenomenon OndadeMar. Between them, they could probably leverage knowledge, share activities and contacts, and obtain economies of scale. Etiqueta Negra had also proved itself to be a profitable company and a resilient brand name, and the concept was easy to scale up. However, there were still quite a few unknowns: Was this brand sufficiently differentiated? Would it sell in North America and Europe? Would the concept fly there? This was to be Tribeca's first foreign venture. Although launched with the ambition to become the first "global" Latin American private equity company, it had so far found enough great opportunities on its home market. Etiqueta Negra had built its brand on the appeal of Argentinean sport icons, such as Juan-Manuel Fangio; making it Colombian could ruffle a few nationalistic feathers. This was bound to increase the visibility of the deal, for good and bad. If it flew, it would be a flagship transaction that could help Luc source many other similar deals and put him in the big league as a cross-continental private equity investor. If it failed, it could set back his efforts for years. "Well," he thought, "we are risk investors, after all." Learning objectives: Building and managing a brand globally in the fashion industry. High-end fashion retailing. Globalization of brands. Growth financing in a global context."
Swot Analysis of "ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA" written by Benoit Leleux, Bryony Jansen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Etiqueta Negra facing as an external strategic factors. Some of the topics covered in ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA case study are - Strategic Management Strategies, Entrepreneurial finance, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA casestudy better are - – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, wage bills are increasing, technology disruption,
central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Etiqueta Negra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Etiqueta Negra 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA can be done for the following purposes –
1. Strategic planning using facts provided in ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA case study
2. Improving business portfolio management of Etiqueta Negra
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 Etiqueta Negra
Strengths ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Etiqueta Negra in ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Etiqueta Negra in the sector have low bargaining power. ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Etiqueta Negra to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Etiqueta Negra digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Etiqueta Negra 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.
Highly skilled collaborators
– Etiqueta Negra 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Etiqueta Negra 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA firm has clearly differentiated products in the market place. This has enabled Etiqueta Negra to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Etiqueta Negra to invest into research and development (R&D) and innovation.
Analytics focus
– Etiqueta Negra 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 Benoit Leleux, Bryony Jansen 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.
Operational resilience
– The operational resilience strategy in the ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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.
Training and development
– Etiqueta Negra has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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.
Successful track record of launching new products
– Etiqueta Negra has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Etiqueta Negra 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.
Ability to recruit top talent
– Etiqueta Negra is one of the leading recruiters in the industry. Managers in the ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 Etiqueta Negra 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.
High brand equity
– Etiqueta Negra has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Etiqueta Negra to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA are -
Capital Spending Reduction
– Even during the low interest decade, Etiqueta Negra 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, Etiqueta Negra is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA, it seems that the employees of Etiqueta Negra 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Etiqueta Negra 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.
Products dominated business model
– Even though Etiqueta Negra 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 - ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Etiqueta Negra products
– To increase the profitability and margins on the products, Etiqueta Negra needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA, 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.
Increasing silos among functional specialists
– The organizational structure of Etiqueta Negra is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Etiqueta Negra needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Etiqueta Negra to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA, in the dynamic environment Etiqueta Negra has struggled to respond to the nimble upstart competition. Etiqueta Negra has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Etiqueta Negra supply chain. Even after few cautionary changes mentioned in the HBR case study - ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Etiqueta Negra vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Benoit Leleux, Bryony Jansen suggests that, Etiqueta Negra 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.
Opportunities ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA | 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 Etiqueta Negra in the consumer business. Now Etiqueta Negra can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Etiqueta Negra is facing challenges because of the dominance of functional experts in the organization. ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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.
Using analytics as competitive advantage
– Etiqueta Negra 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Etiqueta Negra to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Etiqueta Negra has opened avenues for new revenue streams for the organization in the industry. This can help Etiqueta Negra to build a more holistic ecosystem as suggested in the ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA case study. Etiqueta Negra can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Etiqueta Negra 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.
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. Etiqueta Negra 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 Etiqueta Negra can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Etiqueta Negra 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, Etiqueta Negra 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, ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Etiqueta Negra 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.
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. Etiqueta Negra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Etiqueta Negra 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.
Manufacturing automation
– Etiqueta Negra 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.
Threats ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA are -
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. Etiqueta Negra needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Etiqueta Negra is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Etiqueta Negra business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Etiqueta Negra.
Stagnating economy with rate increase
– Etiqueta Negra 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.
Technology acceleration in Forth Industrial Revolution
– Etiqueta Negra has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Etiqueta Negra needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA, Etiqueta Negra 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 .
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 Etiqueta Negra 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. Etiqueta Negra 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Etiqueta Negra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Etiqueta Negra
– 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 Etiqueta Negra.
Weighted SWOT Analysis of ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 Etiqueta Negra needs to make to build a sustainable competitive advantage.