HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL
In January 2008, MA?rcio Luiz SimA?es Utsch, president & CEO of SA?o Paulo Alpargatas S.A., and his management team are looking at how to turn Havaianas, a leading brand in rubber flip flops, into a major global brand. Learning objectives: The case looks at how a Brazilian footwear company is trying to build a global brand in a highly competitive industry.
Swot Analysis of "HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL" written by Dominique Turpin, Tania Naomi Konishi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Havaianas Brand facing as an external strategic factors. Some of the topics covered in HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing commodity prices,
central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Havaianas Brand, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Havaianas Brand 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL can be done for the following purposes –
1. Strategic planning using facts provided in HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL case study
2. Improving business portfolio management of Havaianas Brand
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 Havaianas Brand
Strengths HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Havaianas Brand in HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Havaianas Brand in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Havaianas Brand in the sector have low bargaining power. HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Havaianas Brand to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Leadership & Managing People field
– Havaianas Brand 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 Havaianas Brand in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Havaianas Brand has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Havaianas Brand 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.
Analytics focus
– Havaianas Brand 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 Dominique Turpin, Tania Naomi Konishi 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.
Organizational Resilience of Havaianas Brand
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Havaianas Brand does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL firm has clearly differentiated products in the market place. This has enabled Havaianas Brand to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Havaianas Brand to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Havaianas Brand is one of the leading recruiters in the industry. Managers in the HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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.
Innovation driven organization
– Havaianas Brand is one of the most innovative firm in sector. Manager in HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Havaianas Brand is present in almost all the verticals within the industry. This has provided firm in HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Havaianas Brand 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.
Weaknesses HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL are -
Skills based hiring
– The stress on hiring functional specialists at Havaianas Brand 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.
Increasing silos among functional specialists
– The organizational structure of Havaianas Brand is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Havaianas Brand needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Havaianas Brand to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Havaianas Brand, firm in the HBR case study HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Dominique Turpin, Tania Naomi Konishi suggests that, Havaianas Brand 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.
Need for greater diversity
– Havaianas Brand has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL HBR case study mentions - Havaianas Brand 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.
Capital Spending Reduction
– Even during the low interest decade, Havaianas Brand 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.
Products dominated business model
– Even though Havaianas Brand 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 - HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL, is just above the industry average. Havaianas Brand 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.
Lack of clear differentiation of Havaianas Brand products
– To increase the profitability and margins on the products, Havaianas Brand needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Havaianas Brand 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL | 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL are -
Leveraging digital technologies
– Havaianas Brand can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Havaianas Brand 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 Havaianas Brand to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Havaianas Brand can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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.
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 Havaianas Brand 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Havaianas Brand 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.
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. Havaianas Brand can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Havaianas Brand can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Havaianas Brand has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Havaianas Brand 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, HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Havaianas Brand 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. Havaianas Brand 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.
Creating value in data economy
– The success of analytics program of Havaianas Brand has opened avenues for new revenue streams for the organization in the industry. This can help Havaianas Brand to build a more holistic ecosystem as suggested in the HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL case study. Havaianas Brand can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Havaianas Brand can use these opportunities to build new business models that can help the communities that Havaianas Brand operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Havaianas Brand 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.
Threats HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Havaianas Brand 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.
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. Havaianas Brand can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Havaianas Brand 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.
Shortening product life cycle
– it is one of the major threat that Havaianas Brand is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Havaianas Brand needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Havaianas Brand has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Havaianas Brand 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.
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 Havaianas Brand business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL, Havaianas Brand 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 .
Environmental challenges
– Havaianas Brand 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. Havaianas Brand can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Havaianas Brand 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.
Stagnating economy with rate increase
– Havaianas Brand 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Havaianas Brand with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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 HAVAIANAS: A BRAZILIAN BRAND GOES GLOBAL 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 Havaianas Brand needs to make to build a sustainable competitive advantage.