Damiani (DMN) SWOT Analysis / TOWS Matrix / MBA Resources
Jewelry & Silverware
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Damiani (Italy)
Based on various researches at Oak Spring University , Damiani is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Damiani can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Damiani, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Damiani 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 Damiani can be done for the following purposes –
1. Strategic planning of Damiani
2. Improving business portfolio management of Damiani
3. Assessing feasibility of the new initiative in Italy
4. Making a Jewelry & Silverware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Damiani
Strengths of Damiani | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Damiani are -
High brand equity
– Damiani has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Damiani to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Damiani has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Jewelry & Silverware industry. Secondly the value chain collaborators of Damiani have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Damiani 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.
Strong track record of project management in the Jewelry & Silverware industry
– Damiani is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Damiani 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.
Analytics focus
– Damiani 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 Jewelry & Silverware industry. The technology infrastructure of Italy 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.
Diverse revenue streams
– Damiani is present in almost all the verticals within the Jewelry & Silverware industry. This has provided Damiani 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.
Innovation driven organization
– Damiani is one of the most innovative firm in Jewelry & Silverware sector.
Digital Transformation in Jewelry & Silverware industry
- digital transformation varies from industry to industry. For Damiani digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Damiani 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.
Sustainable margins compare to other players in Jewelry & Silverware industry
– Damiani has clearly differentiated products in the market place. This has enabled Damiani to fetch slight price premium compare to the competitors in the Jewelry & Silverware industry. The sustainable margins have also helped Damiani to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Damiani has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Damiani staying ahead in the Jewelry & Silverware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Damiani in Jewelry & Silverware industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Damiani | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Damiani are -
Employees’ less understanding of Damiani strategy
– From the outside it seems that the employees of Damiani 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.
Products dominated business model
– Even though Damiani has some of the most successful models in the Jewelry & Silverware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Damiani should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Damiani needs to have more collaboration between its sales team and marketing team. Sales professionals in the Jewelry & Silverware industry have deep experience in developing customer relationships. Marketing department at Damiani can leverage the sales team experience to cultivate customer relationships as Damiani is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Damiani is slow explore the new channels of communication. These new channels of communication can help Damiani to provide better information regarding Jewelry & Silverware products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Jewelry & Silverware industry
– The stress on hiring functional specialists at Damiani 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.
Lack of clear differentiation of Damiani products
– To increase the profitability and margins on the products, Damiani needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Damiani has a high cash cycle compare to other players in the Jewelry & Silverware industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Damiani is one of the leading players in the Jewelry & Silverware industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Jewelry & Silverware industry in last five years.
Need for greater diversity
– Damiani has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Italy, Damiani needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Damiani has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Jewelry & Silverware industry over the last five years. Damiani 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.
Damiani Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Damiani are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Damiani in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Jewelry & Silverware industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Damiani 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 Jewelry & Silverware industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Jewelry & Silverware industry, but it has also influenced the consumer preferences. Damiani can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Damiani has opened avenues for new revenue streams for the organization in Jewelry & Silverware industry. This can help Damiani to build a more holistic ecosystem for Damiani products in the Jewelry & Silverware industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Damiani 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Damiani can use these opportunities to build new business models that can help the communities that Damiani operates in. Secondly it can use opportunities from government spending in Jewelry & Silverware sector.
Leveraging digital technologies
– Damiani 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Damiani 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 Damiani to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Damiani has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Jewelry & Silverware sector. This continuous investment in analytics has enabled Damiani to build a competitive advantage using analytics. The analytics driven competitive advantage can help Damiani to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Damiani can use the latest technology developments to improve its manufacturing and designing process in Jewelry & Silverware 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Jewelry & Silverware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Damiani 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. Damiani 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, Damiani 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 Damiani 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 Damiani to increase its market reach. Damiani 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.
Threats Damiani External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Damiani are -
Easy access to finance
– Easy access to finance in Jewelry & Silverware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Damiani can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Damiani may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Jewelry & Silverware 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. Damiani needs to understand the core reasons impacting the Jewelry & Silverware industry. This will help it in building a better workplace.
Consumer confidence and its impact on Damiani 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 Jewelry & Silverware industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Damiani has witnessed rapid integration of technology during Covid-19 in the Jewelry & Silverware industry. As one of the leading players in the industry, Damiani needs to keep up with the evolution of technology in the Jewelry & Silverware 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.
Regulatory challenges
– Damiani 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 Jewelry & Silverware industry regulations.
Shortening product life cycle
– it is one of the major threat that Damiani is facing in Jewelry & Silverware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Damiani
– 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 Damiani.
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.
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 Damiani in the Jewelry & Silverware sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Damiani in Jewelry & Silverware industry. The Jewelry & Silverware 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.
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 Damiani business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Damiani 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 Damiani prominent markets.
Weighted SWOT Analysis of Damiani Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Damiani 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 Damiani 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 Damiani 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 Damiani 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 Damiani needs to make to build a sustainable competitive advantage.
