Retail Inventory: Managing the Canary in the Coal Mine SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Retail Inventory: Managing the Canary in the Coal Mine
Retail inventory is a statistic that is closely watched by retailers as well as their investors, lenders, and suppliers. Retailers not only benefit from inventory, but also bear the cost of excess inventory. Investors, lenders, and suppliers interpret this statistic for signs of the retailer's health, future sales prospects, and impending costs. This article synthesizes the perspectives of investors, lenders, and suppliers on inventory. Moreover, the article shows that inventory turns, a commonly used metric to identify excess inventory, has important limitations that reduce its utility for all these stakeholders. It then presents a new metric, adjusted inventory turns, which can be effectively utilized by all stakeholders to assess whether a retailer is carrying too much or too little inventory.
Swot Analysis of "Retail Inventory: Managing the Canary in the Coal Mine" written by Vishal Gaur, Saravanan Kesavan, Ananth Raman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Inventory Lenders facing as an external strategic factors. Some of the topics covered in Retail Inventory: Managing the Canary in the Coal Mine case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Retail Inventory: Managing the Canary in the Coal Mine casestudy better are - – geopolitical disruptions, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Retail Inventory: Managing the Canary in the Coal Mine
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Retail Inventory: Managing the Canary in the Coal Mine case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Inventory Lenders, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Inventory Lenders 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 Retail Inventory: Managing the Canary in the Coal Mine can be done for the following purposes –
1. Strategic planning using facts provided in Retail Inventory: Managing the Canary in the Coal Mine case study
2. Improving business portfolio management of Inventory Lenders
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 Inventory Lenders
Strengths Retail Inventory: Managing the Canary in the Coal Mine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Inventory Lenders in Retail Inventory: Managing the Canary in the Coal Mine Harvard Business Review case study are -
Learning organization
- Inventory Lenders 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 Inventory Lenders is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Retail Inventory: Managing the Canary in the Coal Mine Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Inventory Lenders has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Inventory Lenders to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Inventory Lenders has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Inventory Lenders 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
– Inventory Lenders 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 Vishal Gaur, Saravanan Kesavan, Ananth Raman 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.
Diverse revenue streams
– Inventory Lenders is present in almost all the verticals within the industry. This has provided firm in Retail Inventory: Managing the Canary in the Coal Mine 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.
Ability to recruit top talent
– Inventory Lenders is one of the leading recruiters in the industry. Managers in the Retail Inventory: Managing the Canary in the Coal Mine are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Inventory Lenders has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Retail Inventory: Managing the Canary in the Coal Mine 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.
Effective Research and Development (R&D)
– Inventory Lenders 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 Retail Inventory: Managing the Canary in the Coal Mine - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Inventory Lenders 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.
Highly skilled collaborators
– Inventory Lenders 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 Retail Inventory: Managing the Canary in the Coal Mine HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Inventory Lenders digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Inventory Lenders 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.
Organizational Resilience of Inventory Lenders
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Inventory Lenders does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Retail Inventory: Managing the Canary in the Coal Mine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Retail Inventory: Managing the Canary in the Coal Mine are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Retail Inventory: Managing the Canary in the Coal Mine, it seems that the employees of Inventory Lenders 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.
Slow to strategic competitive environment developments
– As Retail Inventory: Managing the Canary in the Coal Mine HBR case study mentions - Inventory Lenders 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.
Increasing silos among functional specialists
– The organizational structure of Inventory Lenders is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Inventory Lenders needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Inventory Lenders 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 Retail Inventory: Managing the Canary in the Coal Mine, in the dynamic environment Inventory Lenders has struggled to respond to the nimble upstart competition. Inventory Lenders has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Inventory Lenders 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.
Skills based hiring
– The stress on hiring functional specialists at Inventory Lenders 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
Inventory Lenders 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.
Lack of clear differentiation of Inventory Lenders products
– To increase the profitability and margins on the products, Inventory Lenders needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Inventory Lenders 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Retail Inventory: Managing the Canary in the Coal Mine 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 Inventory Lenders 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Inventory Lenders, firm in the HBR case study Retail Inventory: Managing the Canary in the Coal Mine needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Retail Inventory: Managing the Canary in the Coal Mine | 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 Retail Inventory: Managing the Canary in the Coal Mine are -
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. Inventory Lenders can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Inventory Lenders can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Retail Inventory: Managing the Canary in the Coal Mine 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.
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. Inventory Lenders 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. Inventory Lenders 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 Inventory Lenders has opened avenues for new revenue streams for the organization in the industry. This can help Inventory Lenders to build a more holistic ecosystem as suggested in the Retail Inventory: Managing the Canary in the Coal Mine case study. Inventory Lenders can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Inventory Lenders 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 Inventory Lenders to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Inventory Lenders 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 Retail Inventory: Managing the Canary in the Coal Mine - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Inventory Lenders to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Inventory Lenders to increase its market reach. Inventory Lenders 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.
Leveraging digital technologies
– Inventory Lenders 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Inventory Lenders can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Inventory Lenders 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Inventory Lenders can use these opportunities to build new business models that can help the communities that Inventory Lenders operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Inventory Lenders to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Inventory Lenders can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Retail Inventory: Managing the Canary in the Coal Mine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Retail Inventory: Managing the Canary in the Coal Mine are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Inventory Lenders with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Inventory Lenders 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. Inventory Lenders can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Inventory Lenders has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Inventory Lenders 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.
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 Inventory Lenders.
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.
High dependence on third party suppliers
– Inventory Lenders 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
– Inventory Lenders 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Retail Inventory: Managing the Canary in the Coal Mine, Inventory Lenders 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 .
Increasing wage structure of Inventory Lenders
– 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 Inventory Lenders.
Shortening product life cycle
– it is one of the major threat that Inventory Lenders is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Inventory Lenders 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.
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. Inventory Lenders will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Inventory Lenders 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.
Weighted SWOT Analysis of Retail Inventory: Managing the Canary in the Coal Mine 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 Retail Inventory: Managing the Canary in the Coal Mine 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 Retail Inventory: Managing the Canary in the Coal Mine 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 Retail Inventory: Managing the Canary in the Coal Mine 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 Retail Inventory: Managing the Canary in the Coal Mine 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 Inventory Lenders needs to make to build a sustainable competitive advantage.