Based on various researches at Oak Spring University , Soma Textiles Industries Ltd is operating in a macro-environment that has been destablized by – increasing energy prices, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, talent flight as more people leaving formal jobs,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Soma Textiles Industries Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Soma Textiles Industries Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Soma Textiles Industries Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Soma Textiles Industries 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 Soma Textiles Industries Ltd can be done for the following purposes –
1. Strategic planning of Soma Textiles Industries Ltd
2. Improving business portfolio management of Soma Textiles Industries 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 Soma Textiles Industries Ltd
Strengths of Soma Textiles Industries Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Soma Textiles Industries Ltd are -
Ability to lead change in Apparel/Accessories
– Soma Textiles Industries Ltd 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 Soma Textiles Industries Ltd 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 Soma Textiles Industries Ltd in Apparel/Accessories industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Soma Textiles Industries Ltd is one of the leading players in the Apparel/Accessories 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
– Soma Textiles Industries Ltd is one of the most innovative firm in Apparel/Accessories sector.
Organizational Resilience of Soma Textiles Industries Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Soma Textiles Industries Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Soma Textiles Industries Ltd in the Consumer Cyclical sector have low bargaining power. Soma Textiles Industries Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Soma Textiles Industries Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Soma Textiles Industries Ltd 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 Soma Textiles Industries Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Soma Textiles Industries 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 Soma Textiles Industries Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Soma Textiles Industries Ltd emphasize – knowledge, initiative, and innovation.
High brand equity
– Soma Textiles Industries Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Soma Textiles Industries Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Apparel/Accessories industry
– Soma Textiles Industries Ltd has clearly differentiated products in the market place. This has enabled Soma Textiles Industries Ltd to fetch slight price premium compare to the competitors in the Apparel/Accessories industry. The sustainable margins have also helped Soma Textiles Industries Ltd to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Soma Textiles Industries Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Soma Textiles Industries 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.
Training and development
– Soma Textiles Industries Ltd 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.
Weaknesses of Soma Textiles Industries Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Soma Textiles Industries Ltd are -
No frontier risks strategy
– From the 10K / annual statement of Soma Textiles Industries Ltd, it seems that company is thinking out the frontier risks that can impact Apparel/Accessories industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners in Apparel/Accessories industry
– because of the regulatory requirements in India, Soma Textiles Industries Ltd 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 Apparel/Accessories industry.
Low market penetration in new markets
– Outside its home market of India, Soma Textiles Industries Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Soma Textiles Industries Ltd, in the dynamic environment of Apparel/Accessories industry it has struggled to respond to the nimble upstart competition. Soma Textiles Industries Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Soma Textiles Industries Ltd is slow explore the new channels of communication. These new channels of communication can help Soma Textiles Industries 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 Soma Textiles Industries 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. Soma Textiles Industries Ltd should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Soma Textiles Industries 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 Soma Textiles Industries Ltd lucrative customers.
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 Soma Textiles Industries Ltd supply chain. Even after few cautionary changes, Soma Textiles Industries Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Soma Textiles Industries Ltd vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Soma Textiles Industries Ltd 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 dependence on Soma Textiles Industries Ltd ‘s star products
– The top 2 products and services of Soma Textiles Industries Ltd 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 Soma Textiles Industries Ltd has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Soma Textiles Industries 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 Soma Textiles Industries Ltd can leverage the sales team experience to cultivate customer relationships as Soma Textiles Industries Ltd is planning to shift buying processes online.
Soma Textiles Industries Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Soma Textiles Industries Ltd are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Soma Textiles Industries 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.
Manufacturing automation
– Soma Textiles Industries 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.
Creating value in data economy
– The success of analytics program of Soma Textiles Industries Ltd has opened avenues for new revenue streams for the organization in Apparel/Accessories industry. This can help Soma Textiles Industries Ltd to build a more holistic ecosystem for Soma Textiles Industries Ltd products in the Apparel/Accessories industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Soma Textiles Industries Ltd can develop new processes and procedures in Apparel/Accessories 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Soma Textiles Industries 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 Soma Textiles Industries 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.
Better consumer reach
– The expansion of the 5G network will help Soma Textiles Industries Ltd to increase its market reach. Soma Textiles Industries Ltd 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.
Loyalty marketing
– Soma Textiles Industries Ltd 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.
Building a culture of innovation
– managers at Soma Textiles Industries 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.
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. Soma Textiles Industries Ltd 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. Soma Textiles Industries Ltd 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.
Buying journey improvements
– Soma Textiles Industries 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Soma Textiles Industries Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Soma Textiles Industries Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Soma Textiles Industries Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Soma Textiles Industries Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Soma Textiles Industries Ltd are -
Technology acceleration in Forth Industrial Revolution
– Soma Textiles Industries Ltd has witnessed rapid integration of technology during Covid-19 in the Apparel/Accessories industry. As one of the leading players in the industry, Soma Textiles Industries 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, Soma Textiles Industries 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 Soma Textiles Industries Ltd prominent markets.
Regulatory challenges
– Soma Textiles Industries Ltd 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Soma Textiles Industries Ltd 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 Apparel/Accessories industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Apparel/Accessories industry are lowering. It can presents Soma Textiles Industries 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.
High dependence on third party suppliers
– Soma Textiles Industries Ltd 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.
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. Soma Textiles Industries 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.
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 Soma Textiles Industries Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Soma Textiles Industries Ltd is facing in Apparel/Accessories sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Soma Textiles Industries Ltd 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.
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. Soma Textiles Industries Ltd needs to understand the core reasons impacting the Apparel/Accessories industry. This will help it in building a better workplace.
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 Soma Textiles Industries Ltd.
Weighted SWOT Analysis of Soma Textiles Industries Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Soma Textiles Industries 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 Soma Textiles Industries 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 Soma Textiles Industries 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 Soma Textiles Industries 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 Soma Textiles Industries Ltd needs to make to build a sustainable competitive advantage.