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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , geopolitical disruptions, increasing commodity prices, cloud computing is disrupting traditional business models, wage bills are increasing,
increasing energy prices, there is backlash against globalization, 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 -
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.
Superior customer experience
– The customer experience strategy of Etiqueta Negra in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Learning organization
- Etiqueta Negra 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 Etiqueta Negra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Etiqueta Negra is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Organizational Resilience of Etiqueta Negra
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Etiqueta Negra does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Etiqueta Negra 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Etiqueta Negra is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Etiqueta Negra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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 -
Interest costs
– Compare to the competition, Etiqueta Negra 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.
Skills based hiring
– The stress on hiring functional specialists at Etiqueta Negra 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 cash cycle compare to competitors
Etiqueta Negra 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.
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.
Low market penetration in new markets
– Outside its home market of Etiqueta Negra, firm in the HBR case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Etiqueta Negra 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. Etiqueta Negra 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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 Etiqueta Negra 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 Etiqueta Negra has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA can leverage the sales team experience to cultivate customer relationships as Etiqueta Negra is planning to shift buying processes online.
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 -
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.
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.
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. Etiqueta Negra 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. Etiqueta Negra 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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Etiqueta Negra can use these opportunities to build new business models that can help the communities that Etiqueta Negra operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Etiqueta Negra 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 Etiqueta Negra to hire the very best people irrespective of their geographical location.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Etiqueta Negra in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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 -
Environmental challenges
– Etiqueta Negra 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. Etiqueta Negra can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Etiqueta Negra 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 ETIQUETA NEGRA: GROWTH, BRAND BUILDING AND PRIVATE EQUITY IN LATIN AMERICA .
High dependence on third party suppliers
– Etiqueta Negra 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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Etiqueta Negra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Etiqueta Negra 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.
Regulatory challenges
– Etiqueta Negra needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
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.
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.
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.
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.
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.
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.
