S. P. Apparels (SPAP) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for S. P. Apparels (India)

Based on various researches at Oak Spring University , S. P. Apparels is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, geopolitical disruptions, there is backlash against globalization, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , technology disruption, etc

---

---

---

---

Introduction to SWOT Analysis of S. P. Apparels

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that S. P. Apparels can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the S. P. Apparels, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which S. P. Apparels 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 S. P. Apparels can be done for the following purposes –
1. Strategic planning of S. P. Apparels
2. Improving business portfolio management of S. P. Apparels
3. Assessing feasibility of the new initiative in India
4. Making a Apparel/Accessories sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of S. P. Apparels

---

Strengths of S. P. Apparels | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of S. P. Apparels are -

Low bargaining power of suppliers

– Suppliers of S. P. Apparels in the Consumer Cyclical sector have low bargaining power. S. P. Apparels has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps S. P. Apparels to manage not only supply disruptions but also source products at highly competitive prices.

Operational resilience

– The operational resilience strategy of S. P. Apparels comprises – understanding the underlying the factors in the Apparel/Accessories 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

– S. P. Apparels has one of the best training and development program in Consumer Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Sustainable margins compare to other players in Apparel/Accessories industry

– S. P. Apparels has clearly differentiated products in the market place. This has enabled S. P. Apparels to fetch slight price premium compare to the competitors in the Apparel/Accessories industry. The sustainable margins have also helped S. P. Apparels to invest into research and development (R&D) and innovation.

Organizational Resilience of S. P. Apparels

– The covid-19 pandemic has put organizational resilience at the centre of everthing S. P. Apparels does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

High brand equity

– S. P. Apparels has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled S. P. Apparels to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Apparel/Accessories

– S. P. Apparels is one of the leading players in the Apparel/Accessories industry in India. Over the years it has not only transformed the business landscape in the Apparel/Accessories industry in India but also across the existing markets. The ability to lead change has enabled S. P. Apparels in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Superior customer experience

– The customer experience strategy of S. P. Apparels in Apparel/Accessories industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Diverse revenue streams

– S. P. Apparels is present in almost all the verticals within the Apparel/Accessories industry. This has provided S. P. Apparels 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.

Analytics focus

– S. P. Apparels 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 Apparel/Accessories industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Highly skilled collaborators

– S. P. Apparels has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Apparel/Accessories industry. Secondly the value chain collaborators of S. P. Apparels have helped the firm to develop new products and bring them quickly to the marketplace.

Innovation driven organization

– S. P. Apparels is one of the most innovative firm in Apparel/Accessories sector.

---

---

Weaknesses of S. P. Apparels | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of S. P. Apparels are -

High dependence on S. P. Apparels ‘s star products

– The top 2 products and services of S. P. Apparels still accounts for major business revenue. This dependence on star products in Apparel/Accessories industry has resulted into insufficient focus on developing new products, even though S. P. Apparels has relatively successful track record of launching new products.

Slow to strategic competitive environment developments

– As S. P. Apparels is one of the leading players in the Apparel/Accessories industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Apparel/Accessories industry in last five years.

High operating costs

– Compare to the competitors, S. P. Apparels has high operating costs in the Apparel/Accessories industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract S. P. Apparels lucrative customers.

Skills based hiring in Apparel/Accessories industry

– The stress on hiring functional specialists at S. P. Apparels 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.

Low market penetration in new markets

– Outside its home market of India, S. P. Apparels needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Increasing silos among functional specialists

– The organizational structure of S. P. Apparels is dominated by functional specialists. It is not different from other players in the Apparel/Accessories industry, but S. P. Apparels needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help S. P. Apparels to focus more on services in the Apparel/Accessories industry rather than just following the product oriented approach.

Compensation and incentives

– The revenue per employee of S. P. Apparels is just above the Apparel/Accessories industry average. It 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 S. P. Apparels products

– To increase the profitability and margins on the products, S. P. Apparels needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow decision making process

– As mentioned earlier in the report, S. P. Apparels has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Apparel/Accessories industry over the last five years. S. P. Apparels 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.

Products dominated business model

– Even though S. P. Apparels has some of the most successful models in the Apparel/Accessories industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. S. P. Apparels should strive to include more intangible value offerings along with its core products and services.

Interest costs

– Compare to the competition, S. P. Apparels 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.

---

S. P. Apparels Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of S. P. Apparels are -

Loyalty marketing

– S. P. Apparels 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.

Buying journey improvements

– S. P. Apparels can improve the customer journey of consumers in the Apparel/Accessories industry by using analytics and artificial intelligence. It 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.

Using analytics as competitive advantage

– S. P. Apparels has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Apparel/Accessories sector. This continuous investment in analytics has enabled S. P. Apparels to build a competitive advantage using analytics. The analytics driven competitive advantage can help S. P. Apparels to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Manufacturing automation

– S. P. Apparels can use the latest technology developments to improve its manufacturing and designing process in Apparel/Accessories sector. 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. S. P. Apparels can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Apparel/Accessories industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. S. P. Apparels 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. S. P. Apparels 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, S. P. Apparels 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 S. P. Apparels to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of S. P. Apparels has opened avenues for new revenue streams for the organization in Apparel/Accessories industry. This can help S. P. Apparels to build a more holistic ecosystem for S. P. Apparels products in the Apparel/Accessories industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for S. P. Apparels in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Apparel/Accessories industry, and it will provide faster access to the consumers.

Leveraging digital technologies

– S. P. Apparels 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects S. P. Apparels can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, S. P. Apparels can use these opportunities to build new business models that can help the communities that S. P. Apparels operates in. Secondly it can use opportunities from government spending in Apparel/Accessories sector.

Building a culture of innovation

– managers at S. P. Apparels 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 Apparel/Accessories industry.

---

Threats S. P. Apparels External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of S. P. Apparels are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, S. P. Apparels 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 S. P. Apparels prominent markets.

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. S. P. Apparels needs to understand the core reasons impacting the Apparel/Accessories industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– S. P. Apparels 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 Apparel/Accessories industry.

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 S. P. Apparels.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, S. P. Apparels may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Apparel/Accessories sector.

Increasing wage structure of S. P. Apparels

– 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 S. P. Apparels.

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 S. P. Apparels in the Apparel/Accessories sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that S. P. Apparels is facing in Apparel/Accessories sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.

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. S. P. Apparels 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Apparel/Accessories industry are lowering. It can presents S. P. Apparels with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Apparel/Accessories sector.

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 S. P. Apparels business can come under increasing regulations regarding data privacy, data security, etc.

Regulatory challenges

– S. P. Apparels 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 Apparel/Accessories industry regulations.

---

Weighted SWOT Analysis of S. P. Apparels Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at S. P. Apparels 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 S. P. Apparels 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 S. P. Apparels 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 S. P. Apparels 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 S. P. Apparels needs to make to build a sustainable competitive advantage.

--- ---