SWOT Analysis / TOWS Matrix for Vulcabras Azaleia (Brazil)
Based on various researches at Oak Spring University , Vulcabras Azaleia is operating in a macro-environment that has been destablized by – increasing energy prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Vulcabras Azaleia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Vulcabras Azaleia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vulcabras Azaleia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vulcabras Azaleia 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 Vulcabras Azaleia can be done for the following purposes –
1. Strategic planning of Vulcabras Azaleia
2. Improving business portfolio management of Vulcabras Azaleia
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 Vulcabras Azaleia
Strengths of Vulcabras Azaleia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vulcabras Azaleia are -
Effective Research and Development (R&D)
– Vulcabras Azaleia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Vulcabras Azaleia 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.
Ability to lead change in Footwear
– Vulcabras Azaleia is one of the leading players in the Footwear industry in Brazil. Over the years it has not only transformed the business landscape in the Footwear industry in Brazil but also across the existing markets. The ability to lead change has enabled Vulcabras Azaleia 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 Vulcabras Azaleia 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.
High brand equity
– Vulcabras Azaleia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vulcabras Azaleia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Vulcabras Azaleia
– The covid-19 pandemic has put organizational resilience at the centre of everthing Vulcabras Azaleia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Vulcabras Azaleia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vulcabras Azaleia 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.
Ability to recruit top talent
– Vulcabras Azaleia is one of the leading players in the Footwear industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Vulcabras Azaleia in Footwear industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Footwear industry
- digital transformation varies from industry to industry. For Vulcabras Azaleia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vulcabras Azaleia 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.
Analytics focus
– Vulcabras Azaleia 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 Footwear 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.
Strong track record of project management in the Footwear industry
– Vulcabras Azaleia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Vulcabras Azaleia 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 Vulcabras Azaleia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Vulcabras Azaleia emphasize – knowledge, initiative, and innovation.
Weaknesses of Vulcabras Azaleia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vulcabras Azaleia are -
Need for greater diversity
– Vulcabras Azaleia 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.
Compensation and incentives
– The revenue per employee of Vulcabras Azaleia 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.
Interest costs
– Compare to the competition, Vulcabras Azaleia 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.
High dependence on Vulcabras Azaleia ‘s star products
– The top 2 products and services of Vulcabras Azaleia 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 Vulcabras Azaleia has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Vulcabras Azaleia is dominated by functional specialists. It is not different from other players in the Footwear industry, but Vulcabras Azaleia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vulcabras Azaleia to focus more on services in the Footwear industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Vulcabras Azaleia is one of the leading players in the Footwear industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Footwear industry in last five years.
Low market penetration in new markets
– Outside its home market of Brazil, Vulcabras Azaleia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Vulcabras Azaleia products
– To increase the profitability and margins on the products, Vulcabras Azaleia needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Vulcabras Azaleia, it seems that company is thinking out the frontier risks that can impact Footwear 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.
Aligning sales with marketing
– From the outside it seems that Vulcabras Azaleia 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 Vulcabras Azaleia can leverage the sales team experience to cultivate customer relationships as Vulcabras Azaleia is planning to shift buying processes online.
Skills based hiring in Footwear industry
– The stress on hiring functional specialists at Vulcabras Azaleia 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.
Vulcabras Azaleia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vulcabras Azaleia 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. Vulcabras Azaleia 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. Vulcabras Azaleia 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vulcabras Azaleia 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 Vulcabras Azaleia to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Vulcabras Azaleia 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.
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. Vulcabras Azaleia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Vulcabras Azaleia 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 Vulcabras Azaleia to increase its market reach. Vulcabras Azaleia 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.
Buying journey improvements
– Vulcabras Azaleia 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vulcabras Azaleia can use these opportunities to build new business models that can help the communities that Vulcabras Azaleia operates in. Secondly it can use opportunities from government spending in Footwear sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vulcabras Azaleia is facing challenges because of the dominance of functional experts in the organization. Vulcabras Azaleia 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.
Loyalty marketing
– Vulcabras Azaleia 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vulcabras Azaleia 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.
Developing new processes and practices
– Vulcabras Azaleia can develop new processes and procedures in Footwear 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.
Leveraging digital technologies
– Vulcabras Azaleia 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.
Threats Vulcabras Azaleia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vulcabras Azaleia are -
Technology acceleration in Forth Industrial Revolution
– Vulcabras Azaleia has witnessed rapid integration of technology during Covid-19 in the Footwear industry. As one of the leading players in the industry, Vulcabras Azaleia 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.
High dependence on third party suppliers
– Vulcabras Azaleia 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.
Consumer confidence and its impact on Vulcabras Azaleia 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.
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 Vulcabras Azaleia.
Shortening product life cycle
– it is one of the major threat that Vulcabras Azaleia is facing in Footwear sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Vulcabras Azaleia needs to understand the core reasons impacting the Footwear industry. This will help it in building a better workplace.
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.
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. Vulcabras Azaleia 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.
Environmental challenges
– Vulcabras Azaleia 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. Vulcabras Azaleia can take advantage of this fund but it will also bring new competitors in the Footwear industry.
Easy access to finance
– Easy access to finance in Footwear industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vulcabras Azaleia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Vulcabras Azaleia 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.
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 Vulcabras Azaleia business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Vulcabras Azaleia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Vulcabras Azaleia 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 Vulcabras Azaleia 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 Vulcabras Azaleia 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 Vulcabras Azaleia 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 Vulcabras Azaleia needs to make to build a sustainable competitive advantage.