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 – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing energy prices,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, 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 -
Innovation driven organization
– Damiani is one of the most innovative firm in Jewelry & Silverware sector.
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.
Organizational Resilience of Damiani
– The covid-19 pandemic has put organizational resilience at the centre of everthing Damiani does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
High switching costs
– The high switching costs that Damiani 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.
Ability to lead change in Jewelry & Silverware
– Damiani is one of the leading players in the Jewelry & Silverware industry in Italy. Over the years it has not only transformed the business landscape in the Jewelry & Silverware industry in Italy but also across the existing markets. The ability to lead change has enabled Damiani in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Ability to recruit top talent
– Damiani is one of the leading players in the Jewelry & Silverware industry in Italy. It is in a position to attract the best talent available in Italy. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Damiani 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 Damiani is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Damiani emphasize – knowledge, initiative, and innovation.
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.
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.
Low bargaining power of suppliers
– Suppliers of Damiani in the Consumer Cyclical sector have low bargaining power. Damiani has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Damiani to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Damiani | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Damiani are -
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.
Ability to respond to the competition
– As the decision making is very deliberative at Damiani, in the dynamic environment of Jewelry & Silverware industry it has struggled to respond to the nimble upstart competition. Damiani has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
High operating costs
– Compare to the competitors, Damiani has high operating costs in the Jewelry & Silverware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Damiani lucrative customers.
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.
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.
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 Damiani supply chain. Even after few cautionary changes, Damiani is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Damiani vulnerable to further global disruptions in South East Asia.
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 bargaining power of channel partners in Jewelry & Silverware industry
– because of the regulatory requirements in Italy, Damiani 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 Jewelry & Silverware industry.
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.
Damiani Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Damiani are -
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.
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.
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.
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.
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.
Loyalty marketing
– Damiani 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Damiani is facing challenges because of the dominance of functional experts in the organization. Damiani can utilize new technology in the field of Jewelry & Silverware industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Damiani can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Buying journey improvements
– Damiani can improve the customer journey of consumers in the Jewelry & Silverware 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.
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.
Threats Damiani External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Damiani are -
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.
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.
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.
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.
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.
High dependence on third party suppliers
– Damiani 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.
Stagnating economy with rate increase
– Damiani 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 Jewelry & Silverware 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 Damiani in the Jewelry & Silverware sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Jewelry & Silverware industry are lowering. It can presents Damiani with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Jewelry & Silverware sector.
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 Damiani.
Environmental challenges
– Damiani 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. Damiani can take advantage of this fund but it will also bring new competitors in the Jewelry & Silverware industry.
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.
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.
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.