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 – wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
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.
Successful track record of launching new products
– Damiani has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Damiani 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.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy of Damiani comprises – understanding the underlying the factors in the Jewelry & Silverware industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
Weaknesses of Damiani | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Damiani are -
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.
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.
Increasing silos among functional specialists
– The organizational structure of Damiani is dominated by functional specialists. It is not different from other players in the Jewelry & Silverware industry, but Damiani needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Damiani to focus more on services in the Jewelry & Silverware industry rather than just following the product oriented approach.
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 Damiani ‘s star products
– The top 2 products and services of Damiani still accounts for major business revenue. This dependence on star products in Jewelry & Silverware industry has resulted into insufficient focus on developing new products, even though Damiani has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Damiani, it seems that company is thinking out the frontier risks that can impact Jewelry & Silverware 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.
Capital Spending Reduction
– Even during the low interest decade, Damiani 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 Jewelry & Silverware industry using digital technology.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the Jewelry & Silverware industry, Damiani needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Damiani Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Damiani are -
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.
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.
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.
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.
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.
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. Damiani can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Developing new processes and practices
– Damiani can develop new processes and procedures in Jewelry & Silverware 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.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions in Jewelry & Silverware industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Damiani in the Jewelry & Silverware industry. Now Damiani can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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. Damiani 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.
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.
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.
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.