SWOT Analysis / TOWS Matrix for Zodiac Clothing (India)
Based on various researches at Oak Spring University , Zodiac Clothing is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
there is increasing trade war between United States & China, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zodiac Clothing can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zodiac Clothing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zodiac Clothing 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 Zodiac Clothing can be done for the following purposes –
1. Strategic planning of Zodiac Clothing
2. Improving business portfolio management of Zodiac Clothing
3. Assessing feasibility of the new initiative in India
4. Making a Retail (Apparel) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zodiac Clothing
Strengths of Zodiac Clothing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zodiac Clothing are -
Effective Research and Development (R&D)
– Zodiac Clothing has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zodiac Clothing staying ahead in the Retail (Apparel) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Zodiac Clothing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zodiac Clothing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Zodiac Clothing has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Apparel) industry. Secondly the value chain collaborators of Zodiac Clothing have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Zodiac Clothing 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.
Training and development
– Zodiac Clothing has one of the best training and development program in Services 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.
Diverse revenue streams
– Zodiac Clothing is present in almost all the verticals within the Retail (Apparel) industry. This has provided Zodiac Clothing 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.
Cross disciplinary teams
– Horizontal connected teams at the Zodiac Clothing 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.
Digital Transformation in Retail (Apparel) industry
- digital transformation varies from industry to industry. For Zodiac Clothing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zodiac Clothing 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.
Ability to recruit top talent
– Zodiac Clothing is one of the leading players in the Retail (Apparel) industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Zodiac Clothing is one of the most innovative firm in Retail (Apparel) sector.
Strong track record of project management in the Retail (Apparel) industry
– Zodiac Clothing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Retail (Apparel)
– Zodiac Clothing is one of the leading players in the Retail (Apparel) industry in India. Over the years it has not only transformed the business landscape in the Retail (Apparel) industry in India but also across the existing markets. The ability to lead change has enabled Zodiac Clothing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Zodiac Clothing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zodiac Clothing are -
Compensation and incentives
– The revenue per employee of Zodiac Clothing is just above the Retail (Apparel) 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.
Products dominated business model
– Even though Zodiac Clothing has some of the most successful models in the Retail (Apparel) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zodiac Clothing should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Zodiac Clothing products
– To increase the profitability and margins on the products, Zodiac Clothing needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Zodiac Clothing needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Apparel) industry have deep experience in developing customer relationships. Marketing department at Zodiac Clothing can leverage the sales team experience to cultivate customer relationships as Zodiac Clothing is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Zodiac Clothing has high operating costs in the Retail (Apparel) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zodiac Clothing lucrative customers.
High dependence on Zodiac Clothing ‘s star products
– The top 2 products and services of Zodiac Clothing still accounts for major business revenue. This dependence on star products in Retail (Apparel) industry has resulted into insufficient focus on developing new products, even though Zodiac Clothing has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of India, Zodiac Clothing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Zodiac Clothing supply chain. Even after few cautionary changes, Zodiac Clothing is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zodiac Clothing vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Retail (Apparel) industry
– because of the regulatory requirements in India, Zodiac Clothing 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 Retail (Apparel) industry.
Slow to strategic competitive environment developments
– As Zodiac Clothing is one of the leading players in the Retail (Apparel) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Apparel) industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Zodiac Clothing has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Apparel) industry over the last five years. Zodiac Clothing 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.
Zodiac Clothing Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zodiac Clothing are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zodiac Clothing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Apparel) industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zodiac Clothing 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Apparel) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zodiac Clothing in the Retail (Apparel) industry. Now Zodiac Clothing can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Zodiac Clothing can use the latest technology developments to improve its manufacturing and designing process in Retail (Apparel) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zodiac Clothing 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 Zodiac Clothing to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Zodiac Clothing has opened avenues for new revenue streams for the organization in Retail (Apparel) industry. This can help Zodiac Clothing to build a more holistic ecosystem for Zodiac Clothing products in the Retail (Apparel) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Zodiac Clothing can develop new processes and procedures in Retail (Apparel) 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.
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. Zodiac Clothing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Zodiac Clothing to increase its market reach. Zodiac Clothing 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Apparel) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zodiac Clothing 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. Zodiac Clothing 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.
Building a culture of innovation
– managers at Zodiac Clothing 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 Retail (Apparel) industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Apparel) industry, but it has also influenced the consumer preferences. Zodiac Clothing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zodiac Clothing can use these opportunities to build new business models that can help the communities that Zodiac Clothing operates in. Secondly it can use opportunities from government spending in Retail (Apparel) sector.
Threats Zodiac Clothing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zodiac Clothing are -
Environmental challenges
– Zodiac Clothing 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. Zodiac Clothing can take advantage of this fund but it will also bring new competitors in the Retail (Apparel) industry.
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 Zodiac Clothing in the Retail (Apparel) sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Zodiac Clothing is facing in Retail (Apparel) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Zodiac Clothing 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 Retail (Apparel) industry regulations.
Consumer confidence and its impact on Zodiac Clothing 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 Retail (Apparel) industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zodiac Clothing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Apparel) sector.
Easy access to finance
– Easy access to finance in Retail (Apparel) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zodiac Clothing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Zodiac Clothing 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.
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. Zodiac Clothing needs to understand the core reasons impacting the Retail (Apparel) industry. This will help it in building a better workplace.
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.
Technology acceleration in Forth Industrial Revolution
– Zodiac Clothing has witnessed rapid integration of technology during Covid-19 in the Retail (Apparel) industry. As one of the leading players in the industry, Zodiac Clothing needs to keep up with the evolution of technology in the Retail (Apparel) 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 Zodiac Clothing.
Stagnating economy with rate increase
– Zodiac Clothing 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 Retail (Apparel) industry.
Weighted SWOT Analysis of Zodiac Clothing Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zodiac Clothing 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 Zodiac Clothing 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 Zodiac Clothing 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 Zodiac Clothing 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 Zodiac Clothing needs to make to build a sustainable competitive advantage.