SWOT Analysis / TOWS Matrix for ALPARGATAS PN (Brazil)
Based on various researches at Oak Spring University , ALPARGATAS PN is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing transportation and logistics costs, geopolitical disruptions, technology disruption,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ALPARGATAS PN can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ALPARGATAS PN, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ALPARGATAS 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 ALPARGATAS PN can be done for the following purposes –
1. Strategic planning of ALPARGATAS PN
2. Improving business portfolio management of ALPARGATAS PN
3. Assessing feasibility of the new initiative in Brazil
4. Making a Footwear sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ALPARGATAS PN
Strengths of ALPARGATAS PN | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ALPARGATAS PN are -
Effective Research and Development (R&D)
– ALPARGATAS PN has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ALPARGATAS PN staying ahead in the Footwear industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– ALPARGATAS PN 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.
Innovation driven organization
– ALPARGATAS PN is one of the most innovative firm in Footwear sector.
Low bargaining power of suppliers
– Suppliers of ALPARGATAS PN in the Consumer Cyclical sector have low bargaining power. ALPARGATAS PN has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ALPARGATAS PN to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– ALPARGATAS PN has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Footwear industry. Secondly the value chain collaborators of ALPARGATAS PN have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of ALPARGATAS PN comprises – understanding the underlying the factors in the Footwear 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.
Digital Transformation in Footwear industry
- digital transformation varies from industry to industry. For ALPARGATAS PN digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ALPARGATAS 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.
High brand equity
– ALPARGATAS PN has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ALPARGATAS 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 ALPARGATAS PN in Footwear industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– ALPARGATAS PN is present in almost all the verticals within the Footwear industry. This has provided ALPARGATAS 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.
Strong track record of project management in the Footwear industry
– ALPARGATAS 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.
Cross disciplinary teams
– Horizontal connected teams at the ALPARGATAS 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 ALPARGATAS PN | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ALPARGATAS PN are -
Skills based hiring in Footwear industry
– The stress on hiring functional specialists at ALPARGATAS 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.
Increasing silos among functional specialists
– The organizational structure of ALPARGATAS PN is dominated by functional specialists. It is not different from other players in the Footwear industry, but ALPARGATAS PN needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ALPARGATAS PN to focus more on services in the Footwear industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, ALPARGATAS PN is slow explore the new channels of communication. These new channels of communication can help ALPARGATAS PN to provide better information regarding Footwear products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Brazil, ALPARGATAS PN needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that ALPARGATAS PN needs to have more collaboration between its sales team and marketing team. Sales professionals in the Footwear industry have deep experience in developing customer relationships. Marketing department at ALPARGATAS PN can leverage the sales team experience to cultivate customer relationships as ALPARGATAS PN is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, ALPARGATAS PN 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 Footwear industry using digital technology.
High dependence on ALPARGATAS PN ‘s star products
– The top 2 products and services of ALPARGATAS PN still accounts for major business revenue. This dependence on star products in Footwear industry has resulted into insufficient focus on developing new products, even though ALPARGATAS PN has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of ALPARGATAS PN is just above the Footwear 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.
Ability to respond to the competition
– As the decision making is very deliberative at ALPARGATAS PN, in the dynamic environment of Footwear industry it has struggled to respond to the nimble upstart competition. ALPARGATAS PN has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 ALPARGATAS PN supply chain. Even after few cautionary changes, ALPARGATAS PN is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left ALPARGATAS PN vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
ALPARGATAS PN has a high cash cycle compare to other players in the Footwear industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
ALPARGATAS PN Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ALPARGATAS PN are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Footwear industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ALPARGATAS PN 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. ALPARGATAS PN 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ALPARGATAS PN can use these opportunities to build new business models that can help the communities that ALPARGATAS PN operates in. Secondly it can use opportunities from government spending in Footwear sector.
Buying journey improvements
– ALPARGATAS PN can improve the customer journey of consumers in the Footwear 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 ALPARGATAS 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 Footwear industry.
Better consumer reach
– The expansion of the 5G network will help ALPARGATAS PN to increase its market reach. ALPARGATAS PN 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ALPARGATAS PN can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Footwear industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for ALPARGATAS PN in the Footwear industry. Now ALPARGATAS PN can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– ALPARGATAS PN can use the latest technology developments to improve its manufacturing and designing process in Footwear 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for ALPARGATAS 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 Footwear industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Footwear industry, but it has also influenced the consumer preferences. ALPARGATAS PN can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for ALPARGATAS 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 ALPARGATAS PN to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, ALPARGATAS PN is facing challenges because of the dominance of functional experts in the organization. ALPARGATAS PN can utilize new technology in the field of Footwear industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of ALPARGATAS PN has opened avenues for new revenue streams for the organization in Footwear industry. This can help ALPARGATAS PN to build a more holistic ecosystem for ALPARGATAS PN products in the Footwear industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats ALPARGATAS PN External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ALPARGATAS PN 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. ALPARGATAS PN needs to understand the core reasons impacting the Footwear industry. This will help it in building a better workplace.
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. ALPARGATAS 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ALPARGATAS PN in Footwear industry. The Footwear 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.
Consumer confidence and its impact on ALPARGATAS 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 Footwear industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Footwear industry are lowering. It can presents ALPARGATAS PN with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Footwear sector.
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.
Technology acceleration in Forth Industrial Revolution
– ALPARGATAS PN has witnessed rapid integration of technology during Covid-19 in the Footwear industry. As one of the leading players in the industry, ALPARGATAS PN needs to keep up with the evolution of technology in the Footwear 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.
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 ALPARGATAS PN.
Environmental challenges
– ALPARGATAS 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. ALPARGATAS PN can take advantage of this fund but it will also bring new competitors in the Footwear industry.
High dependence on third party suppliers
– ALPARGATAS 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.
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.
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 ALPARGATAS 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, ALPARGATAS 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 Footwear sector.
Weighted SWOT Analysis of ALPARGATAS PN Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ALPARGATAS 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 ALPARGATAS 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 ALPARGATAS 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 ALPARGATAS 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 ALPARGATAS PN needs to make to build a sustainable competitive advantage.