SWOT Analysis / TOWS Matrix for Guararapes Confeccoes PN (Brazil)
Based on various researches at Oak Spring University , Guararapes Confeccoes PN is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , there is backlash against globalization, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Guararapes Confeccoes PN
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guararapes Confeccoes PN can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guararapes Confeccoes PN, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guararapes Confeccoes PN 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 Guararapes Confeccoes PN can be done for the following purposes –
1. Strategic planning of Guararapes Confeccoes PN
2. Improving business portfolio management of Guararapes Confeccoes PN
3. Assessing feasibility of the new initiative in Brazil
4. Making a Retail (Apparel) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guararapes Confeccoes PN
Strengths of Guararapes Confeccoes PN | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guararapes Confeccoes PN are -
Low bargaining power of suppliers
– Suppliers of Guararapes Confeccoes PN in the Services sector have low bargaining power. Guararapes Confeccoes PN has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guararapes Confeccoes PN to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Retail (Apparel) industry
– Guararapes Confeccoes PN has clearly differentiated products in the market place. This has enabled Guararapes Confeccoes PN to fetch slight price premium compare to the competitors in the Retail (Apparel) industry. The sustainable margins have also helped Guararapes Confeccoes PN to invest into research and development (R&D) and innovation.
Digital Transformation in Retail (Apparel) industry
- digital transformation varies from industry to industry. For Guararapes Confeccoes PN digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guararapes Confeccoes PN 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.
Training and development
– Guararapes Confeccoes PN has one of the best training and development program in Services 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.
High brand equity
– Guararapes Confeccoes PN has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guararapes Confeccoes PN to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Guararapes Confeccoes PN in Retail (Apparel) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Guararapes Confeccoes PN is one of the most innovative firm in Retail (Apparel) sector.
Effective Research and Development (R&D)
– Guararapes Confeccoes PN has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Guararapes Confeccoes PN staying ahead in the Retail (Apparel) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Guararapes Confeccoes PN
– The covid-19 pandemic has put organizational resilience at the centre of everthing Guararapes Confeccoes PN does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Retail (Apparel) industry
– Guararapes Confeccoes PN is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Guararapes Confeccoes PN has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Guararapes Confeccoes PN 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.
Cross disciplinary teams
– Horizontal connected teams at the Guararapes Confeccoes PN 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.
Weaknesses of Guararapes Confeccoes PN | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guararapes Confeccoes PN are -
Slow decision making process
– As mentioned earlier in the report, Guararapes Confeccoes PN has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Apparel) industry over the last five years. Guararapes Confeccoes PN 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.
High cash cycle compare to competitors
Guararapes Confeccoes PN has a high cash cycle compare to other players in the Retail (Apparel) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Guararapes Confeccoes PN has some of the most successful models in the Retail (Apparel) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Guararapes Confeccoes PN 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 Guararapes Confeccoes PN needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Apparel) industry have deep experience in developing customer relationships. Marketing department at Guararapes Confeccoes PN can leverage the sales team experience to cultivate customer relationships as Guararapes Confeccoes PN is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Brazil, Guararapes Confeccoes PN needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Retail (Apparel) industry, Guararapes Confeccoes PN 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.
Skills based hiring in Retail (Apparel) industry
– The stress on hiring functional specialists at Guararapes Confeccoes PN 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.
Compensation and incentives
– The revenue per employee of Guararapes Confeccoes PN is just above the Retail (Apparel) 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.
Need for greater diversity
– Guararapes Confeccoes PN 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.
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 Guararapes Confeccoes PN supply chain. Even after few cautionary changes, Guararapes Confeccoes PN is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guararapes Confeccoes PN vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Guararapes Confeccoes PN 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.
Guararapes Confeccoes PN Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guararapes Confeccoes PN are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Apparel) industry, but it has also influenced the consumer preferences. Guararapes Confeccoes PN can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Guararapes Confeccoes PN 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.
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. Guararapes Confeccoes PN can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guararapes Confeccoes PN 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 Guararapes Confeccoes PN to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Guararapes Confeccoes PN in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Apparel) industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Guararapes Confeccoes PN 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 Retail (Apparel) industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guararapes Confeccoes PN can use these opportunities to build new business models that can help the communities that Guararapes Confeccoes PN operates in. Secondly it can use opportunities from government spending in Retail (Apparel) sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Guararapes Confeccoes PN 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, Guararapes Confeccoes PN is facing challenges because of the dominance of functional experts in the organization. Guararapes Confeccoes PN can utilize new technology in the field of Retail (Apparel) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Guararapes Confeccoes PN 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Apparel) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Guararapes Confeccoes PN in the Retail (Apparel) industry. Now Guararapes Confeccoes PN 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, Guararapes Confeccoes PN 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 Guararapes Confeccoes PN to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Guararapes Confeccoes PN has opened avenues for new revenue streams for the organization in Retail (Apparel) industry. This can help Guararapes Confeccoes PN to build a more holistic ecosystem for Guararapes Confeccoes PN products in the Retail (Apparel) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Guararapes Confeccoes PN External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guararapes Confeccoes PN are -
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 Guararapes Confeccoes PN in the Retail (Apparel) sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Guararapes Confeccoes PN has witnessed rapid integration of technology during Covid-19 in the Retail (Apparel) industry. As one of the leading players in the industry, Guararapes Confeccoes PN needs to keep up with the evolution of technology in the Retail (Apparel) 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.
Consumer confidence and its impact on Guararapes Confeccoes PN 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 Retail (Apparel) industry and other sectors.
Easy access to finance
– Easy access to finance in Retail (Apparel) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guararapes Confeccoes PN can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Guararapes Confeccoes PN
– 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 Guararapes Confeccoes PN.
High dependence on third party suppliers
– Guararapes Confeccoes PN 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.
Shortening product life cycle
– it is one of the major threat that Guararapes Confeccoes PN is facing in Retail (Apparel) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Guararapes Confeccoes PN 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. Guararapes Confeccoes PN can take advantage of this fund but it will also bring new competitors in the Retail (Apparel) industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guararapes Confeccoes PN in Retail (Apparel) industry. The Retail (Apparel) 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.
Regulatory challenges
– Guararapes Confeccoes PN 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 Retail (Apparel) industry regulations.
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. Guararapes Confeccoes PN 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 Guararapes Confeccoes PN business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Guararapes Confeccoes PN may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Apparel) sector.
Weighted SWOT Analysis of Guararapes Confeccoes PN Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guararapes Confeccoes PN 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 Guararapes Confeccoes PN 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 Guararapes Confeccoes PN 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 Guararapes Confeccoes PN 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 Guararapes Confeccoes PN needs to make to build a sustainable competitive advantage.