Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for LOJAS MARISA ON (Brazil)
Based on various researches at Oak Spring University , LOJAS MARISA ON is operating in a macro-environment that has been destablized by – technology disruption, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, wage bills are increasing,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, etc
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Introduction to SWOT Analysis of LOJAS MARISA ON
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that LOJAS MARISA ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the LOJAS MARISA ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which LOJAS MARISA ON 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 LOJAS MARISA ON can be done for the following purposes –
1. Strategic planning of LOJAS MARISA ON
2. Improving business portfolio management of LOJAS MARISA ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of LOJAS MARISA ON
Strengths of LOJAS MARISA ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of LOJAS MARISA ON are -
Superior customer experience
– The customer experience strategy of LOJAS MARISA ON in Retail (Department & Discount) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of LOJAS MARISA ON in the Services sector have low bargaining power. LOJAS MARISA ON has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps LOJAS MARISA ON to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– LOJAS MARISA ON has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. LOJAS MARISA ON 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.
- LOJAS MARISA ON 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 LOJAS MARISA ON is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at LOJAS MARISA ON emphasize – knowledge, initiative, and innovation.
– LOJAS MARISA ON 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 (Department & Discount) 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 switching costs
– The high switching costs that LOJAS MARISA ON 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.
Effective Research and Development (R&D)
– LOJAS MARISA ON has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – LOJAS MARISA ON staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– LOJAS MARISA ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled LOJAS MARISA ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Retail (Department & Discount) industry
– LOJAS MARISA ON has clearly differentiated products in the market place. This has enabled LOJAS MARISA ON to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped LOJAS MARISA ON to invest into research and development (R&D) and innovation.
Diverse revenue streams
– LOJAS MARISA ON is present in almost all the verticals within the Retail (Department & Discount) industry. This has provided LOJAS MARISA ON 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.
Digital Transformation in Retail (Department & Discount) industry
- digital transformation varies from industry to industry. For LOJAS MARISA ON digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. LOJAS MARISA ON 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
– LOJAS MARISA ON 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.
Weaknesses of LOJAS MARISA ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of LOJAS MARISA ON are -
Aligning sales with marketing
– From the outside it seems that LOJAS MARISA ON needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Department & Discount) industry have deep experience in developing customer relationships. Marketing department at LOJAS MARISA ON can leverage the sales team experience to cultivate customer relationships as LOJAS MARISA ON is planning to shift buying processes online.
Lack of clear differentiation of LOJAS MARISA ON products
– To increase the profitability and margins on the products, LOJAS MARISA ON needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Retail (Department & Discount) industry
– The stress on hiring functional specialists at LOJAS MARISA ON 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, LOJAS MARISA ON is slow explore the new channels of communication. These new channels of communication can help LOJAS MARISA ON to provide better information regarding Retail (Department & Discount) products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, LOJAS MARISA ON 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 (Department & Discount) industry over the last five years. LOJAS MARISA ON 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 dependence on LOJAS MARISA ON ‘s star products
– The top 2 products and services of LOJAS MARISA ON still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though LOJAS MARISA ON has relatively successful track record of launching new products.
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 LOJAS MARISA ON supply chain. Even after few cautionary changes, LOJAS MARISA ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left LOJAS MARISA ON vulnerable to further global disruptions in South East Asia.
– Compare to the competition, LOJAS MARISA ON 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 cash cycle compare to competitors
LOJAS MARISA ON has a high cash cycle compare to other players in the Retail (Department & Discount) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, LOJAS MARISA ON 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 Retail (Department & Discount) industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Retail (Department & Discount) industry, LOJAS MARISA ON 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.
LOJAS MARISA ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of LOJAS MARISA ON are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for LOJAS MARISA ON 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 (Department & Discount) 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 Retail (Department & Discount) industry, but it has also influenced the consumer preferences. LOJAS MARISA ON can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, LOJAS MARISA ON is facing challenges because of the dominance of functional experts in the organization. LOJAS MARISA ON can utilize new technology in the field of Retail (Department & Discount) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. LOJAS MARISA ON 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, LOJAS MARISA ON 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 LOJAS MARISA ON to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– LOJAS MARISA ON has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled LOJAS MARISA ON to build a competitive advantage using analytics. The analytics driven competitive advantage can help LOJAS MARISA ON to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
– LOJAS MARISA ON 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help LOJAS MARISA ON to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help LOJAS MARISA ON to increase its market reach. LOJAS MARISA ON 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 LOJAS MARISA ON can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at LOJAS MARISA ON 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 (Department & Discount) industry.
Leveraging digital technologies
– LOJAS MARISA ON 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, LOJAS MARISA ON can use these opportunities to build new business models that can help the communities that LOJAS MARISA ON operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.
Threats LOJAS MARISA ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of LOJAS MARISA ON are -
– 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.
– LOJAS MARISA ON 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. LOJAS MARISA ON can take advantage of this fund but it will also bring new competitors in the Retail (Department & Discount) industry.
Technology acceleration in Forth Industrial Revolution
– LOJAS MARISA ON has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, LOJAS MARISA ON needs to keep up with the evolution of technology in the Retail (Department & Discount) 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 LOJAS MARISA ON.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, LOJAS MARISA ON 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 (Department & Discount) sector.
Shortening product life cycle
– it is one of the major threat that LOJAS MARISA ON is facing in Retail (Department & Discount) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of LOJAS MARISA ON
– 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 LOJAS MARISA ON.
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. LOJAS MARISA ON 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.
Easy access to finance
– Easy access to finance in Retail (Department & Discount) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. LOJAS MARISA ON can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
– LOJAS MARISA ON 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 (Department & Discount) industry regulations.
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 LOJAS MARISA ON business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– LOJAS MARISA ON 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.
Weighted SWOT Analysis of LOJAS MARISA ON Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at LOJAS MARISA ON 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 LOJAS MARISA ON 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 LOJAS MARISA ON 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 LOJAS MARISA ON 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 LOJAS MARISA ON needs to make to build a sustainable competitive advantage.