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 – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing energy prices, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, increasing commodity prices, 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 -
Analytics focus
– Guararapes Confeccoes PN 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 Retail (Apparel) industry. The technology infrastructure of Brazil 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 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.
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.
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.
Highly skilled collaborators
– Guararapes Confeccoes PN has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Apparel) industry. Secondly the value chain collaborators of Guararapes Confeccoes PN have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Operational resilience
– The operational resilience strategy of Guararapes Confeccoes PN comprises – understanding the underlying the factors in the Retail (Apparel) 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.
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.
Diverse revenue streams
– Guararapes Confeccoes PN is present in almost all the verticals within the Retail (Apparel) industry. This has provided Guararapes Confeccoes PN 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.
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.
High switching costs
– The high switching costs that Guararapes Confeccoes PN 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.
Learning organization
- Guararapes Confeccoes PN 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 Guararapes Confeccoes PN is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guararapes Confeccoes PN emphasize – knowledge, initiative, and innovation.
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 -
Ability to respond to the competition
– As the decision making is very deliberative at Guararapes Confeccoes PN, in the dynamic environment of Retail (Apparel) industry it has struggled to respond to the nimble upstart competition. Guararapes Confeccoes PN has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Employees’ less understanding of Guararapes Confeccoes PN strategy
– From the outside it seems that the employees of Guararapes Confeccoes PN 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.
No frontier risks strategy
– From the 10K / annual statement of Guararapes Confeccoes PN, it seems that company is thinking out the frontier risks that can impact Retail (Apparel) 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.
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.
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.
High operating costs
– Compare to the competitors, Guararapes Confeccoes PN has high operating costs in the Retail (Apparel) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Guararapes Confeccoes PN lucrative customers.
Slow to strategic competitive environment developments
– As Guararapes Confeccoes PN is one of the leading players in the Retail (Apparel) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Apparel) industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Guararapes Confeccoes PN is slow explore the new channels of communication. These new channels of communication can help Guararapes Confeccoes PN to provide better information regarding Retail (Apparel) products and services. It can also build an online community to further reach out to potential 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 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.
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 -
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.
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.
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.
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.
Developing new processes and practices
– Guararapes Confeccoes PN can develop new processes and procedures in Retail (Apparel) 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.
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.
Using analytics as competitive advantage
– Guararapes Confeccoes PN has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Apparel) sector. This continuous investment in analytics has enabled Guararapes Confeccoes PN to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guararapes Confeccoes PN to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Guararapes Confeccoes PN 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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Guararapes Confeccoes PN to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 -
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.
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.
Stagnating economy with rate increase
– Guararapes Confeccoes PN 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 Retail (Apparel) industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guararapes Confeccoes PN 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 Guararapes Confeccoes PN prominent markets.
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.
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.
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 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.
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.
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.
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.
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 Guararapes Confeccoes PN.
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.
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.