SWOT Analysis / TOWS Matrix for Vardhman Polytex Ltd (India)
Based on various researches at Oak Spring University , Vardhman Polytex Ltd is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, there is backlash against globalization, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Vardhman Polytex Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Vardhman Polytex Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vardhman Polytex Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vardhman Polytex Ltd 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 Vardhman Polytex Ltd can be done for the following purposes –
1. Strategic planning of Vardhman Polytex Ltd
2. Improving business portfolio management of Vardhman Polytex Ltd
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 Vardhman Polytex Ltd
Strengths of Vardhman Polytex Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vardhman Polytex Ltd are -
Learning organization
- Vardhman Polytex Ltd 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 Vardhman Polytex Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Vardhman Polytex Ltd emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Vardhman Polytex Ltd is one of the most innovative firm in Apparel/Accessories sector.
Digital Transformation in Apparel/Accessories industry
- digital transformation varies from industry to industry. For Vardhman Polytex Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vardhman Polytex Ltd 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.
Low bargaining power of suppliers
– Suppliers of Vardhman Polytex Ltd in the Consumer Cyclical sector have low bargaining power. Vardhman Polytex Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vardhman Polytex Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Vardhman Polytex Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vardhman Polytex Ltd 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.
Diverse revenue streams
– Vardhman Polytex Ltd is present in almost all the verticals within the Apparel/Accessories industry. This has provided Vardhman Polytex Ltd 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 brand equity
– Vardhman Polytex Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vardhman Polytex Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Vardhman Polytex Ltd 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.
Cross disciplinary teams
– Horizontal connected teams at the Vardhman Polytex Ltd 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.
High switching costs
– The high switching costs that Vardhman Polytex Ltd 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.
Strong track record of project management in the Apparel/Accessories industry
– Vardhman Polytex Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Apparel/Accessories industry
– Vardhman Polytex Ltd has clearly differentiated products in the market place. This has enabled Vardhman Polytex Ltd to fetch slight price premium compare to the competitors in the Apparel/Accessories industry. The sustainable margins have also helped Vardhman Polytex Ltd to invest into research and development (R&D) and innovation.
Weaknesses of Vardhman Polytex Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vardhman Polytex Ltd are -
Compensation and incentives
– The revenue per employee of Vardhman Polytex Ltd 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.
Low market penetration in new markets
– Outside its home market of India, Vardhman Polytex Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Vardhman Polytex Ltd strategy
– From the outside it seems that the employees of Vardhman Polytex Ltd 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vardhman Polytex Ltd is slow explore the new channels of communication. These new channels of communication can help Vardhman Polytex Ltd to provide better information regarding Apparel/Accessories products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Vardhman Polytex Ltd 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. Vardhman Polytex Ltd should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Apparel/Accessories industry
– The stress on hiring functional specialists at Vardhman Polytex Ltd 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.
Aligning sales with marketing
– From the outside it seems that Vardhman Polytex Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Apparel/Accessories industry have deep experience in developing customer relationships. Marketing department at Vardhman Polytex Ltd can leverage the sales team experience to cultivate customer relationships as Vardhman Polytex Ltd is planning to shift buying processes online.
Interest costs
– Compare to the competition, Vardhman Polytex Ltd 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.
Lack of clear differentiation of Vardhman Polytex Ltd products
– To increase the profitability and margins on the products, Vardhman Polytex Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Vardhman Polytex Ltd 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 Apparel/Accessories industry using digital technology.
High operating costs
– Compare to the competitors, Vardhman Polytex Ltd 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 Vardhman Polytex Ltd lucrative customers.
Vardhman Polytex Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vardhman Polytex Ltd are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vardhman Polytex Ltd is facing challenges because of the dominance of functional experts in the organization. Vardhman Polytex Ltd can utilize new technology in the field of Apparel/Accessories industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Vardhman Polytex Ltd 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 Vardhman Polytex Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vardhman Polytex Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Vardhman Polytex Ltd 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.
Building a culture of innovation
– managers at Vardhman Polytex Ltd 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vardhman Polytex Ltd 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 Vardhman Polytex Ltd to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Vardhman Polytex Ltd 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.
Use of Bitcoin and other crypto currencies for transactions in Apparel/Accessories industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vardhman Polytex Ltd in the Apparel/Accessories industry. Now Vardhman Polytex Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vardhman Polytex Ltd 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 Vardhman Polytex Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vardhman Polytex Ltd can use these opportunities to build new business models that can help the communities that Vardhman Polytex Ltd operates in. Secondly it can use opportunities from government spending in Apparel/Accessories sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vardhman Polytex Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vardhman Polytex Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Vardhman Polytex Ltd 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.
Buying journey improvements
– Vardhman Polytex Ltd 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.
Threats Vardhman Polytex Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vardhman Polytex Ltd are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vardhman Polytex Ltd in Apparel/Accessories industry. The Apparel/Accessories 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.
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.
Stagnating economy with rate increase
– Vardhman Polytex Ltd 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Vardhman Polytex Ltd is facing in Apparel/Accessories sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Apparel/Accessories industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vardhman Polytex Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Apparel/Accessories industry are lowering. It can presents Vardhman Polytex Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Apparel/Accessories sector.
Technology acceleration in Forth Industrial Revolution
– Vardhman Polytex Ltd has witnessed rapid integration of technology during Covid-19 in the Apparel/Accessories industry. As one of the leading players in the industry, Vardhman Polytex Ltd needs to keep up with the evolution of technology in the Apparel/Accessories 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vardhman Polytex Ltd 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 Vardhman Polytex Ltd prominent markets.
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. Vardhman Polytex Ltd 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.
Increasing wage structure of Vardhman Polytex Ltd
– 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 Vardhman Polytex Ltd.
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 Vardhman Polytex Ltd in the Apparel/Accessories sector and impact the bottomline of the organization.
Environmental challenges
– Vardhman Polytex Ltd 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. Vardhman Polytex Ltd can take advantage of this fund but it will also bring new competitors in the Apparel/Accessories industry.
Weighted SWOT Analysis of Vardhman Polytex Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Vardhman Polytex Ltd 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 Vardhman Polytex Ltd 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 Vardhman Polytex Ltd 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 Vardhman Polytex Ltd 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 Vardhman Polytex Ltd needs to make to build a sustainable competitive advantage.