SWOT Analysis / TOWS Matrix for Clio Cosmetics (South Korea)
Based on various researches at Oak Spring University , Clio Cosmetics is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, technology disruption, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Clio Cosmetics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clio Cosmetics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clio Cosmetics 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 Clio Cosmetics can be done for the following purposes –
1. Strategic planning of Clio Cosmetics
2. Improving business portfolio management of Clio Cosmetics
3. Assessing feasibility of the new initiative in South Korea
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Clio Cosmetics
Strengths of Clio Cosmetics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clio Cosmetics are -
Innovation driven organization
– Clio Cosmetics is one of the most innovative firm in Personal & Household Prods. sector.
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Clio Cosmetics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Clio Cosmetics 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.
Highly skilled collaborators
– Clio Cosmetics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal & Household Prods. industry. Secondly the value chain collaborators of Clio Cosmetics have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Personal & Household Prods.
– Clio Cosmetics is one of the leading players in the Personal & Household Prods. industry in South Korea. Over the years it has not only transformed the business landscape in the Personal & Household Prods. industry in South Korea but also across the existing markets. The ability to lead change has enabled Clio Cosmetics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Personal & Household Prods. industry
– Clio Cosmetics 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
- Clio Cosmetics 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 Clio Cosmetics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Clio Cosmetics emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Clio Cosmetics is present in almost all the verticals within the Personal & Household Prods. industry. This has provided Clio Cosmetics 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.
Successful track record of launching new products
– Clio Cosmetics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Clio Cosmetics 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.
Effective Research and Development (R&D)
– Clio Cosmetics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Clio Cosmetics staying ahead in the Personal & Household Prods. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Clio Cosmetics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Clio Cosmetics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Clio Cosmetics is one of the leading players in the Personal & Household Prods. industry in South Korea. It is in a position to attract the best talent available in South Korea. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Clio Cosmetics in Personal & Household Prods. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Clio Cosmetics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Clio Cosmetics are -
Employees’ less understanding of Clio Cosmetics strategy
– From the outside it seems that the employees of Clio Cosmetics 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.
Aligning sales with marketing
– From the outside it seems that Clio Cosmetics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal & Household Prods. industry have deep experience in developing customer relationships. Marketing department at Clio Cosmetics can leverage the sales team experience to cultivate customer relationships as Clio Cosmetics is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Clio Cosmetics is slow explore the new channels of communication. These new channels of communication can help Clio Cosmetics to provide better information regarding Personal & Household Prods. products and services. It can also build an online community to further reach out to potential customers.
High dependence on Clio Cosmetics ‘s star products
– The top 2 products and services of Clio Cosmetics still accounts for major business revenue. This dependence on star products in Personal & Household Prods. industry has resulted into insufficient focus on developing new products, even though Clio Cosmetics has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Clio Cosmetics is dominated by functional specialists. It is not different from other players in the Personal & Household Prods. industry, but Clio Cosmetics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Clio Cosmetics to focus more on services in the Personal & Household Prods. industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Clio Cosmetics 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 Personal & Household Prods. industry using digital technology.
Low market penetration in new markets
– Outside its home market of South Korea, Clio Cosmetics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Clio Cosmetics is just above the Personal & Household Prods. 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.
Slow to strategic competitive environment developments
– As Clio Cosmetics is one of the leading players in the Personal & Household Prods. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Personal & Household Prods. industry in last five years.
Interest costs
– Compare to the competition, Clio Cosmetics 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.
Products dominated business model
– Even though Clio Cosmetics has some of the most successful models in the Personal & Household Prods. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Clio Cosmetics should strive to include more intangible value offerings along with its core products and services.
Clio Cosmetics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Clio Cosmetics are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Clio Cosmetics 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 Clio Cosmetics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Clio Cosmetics 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Clio Cosmetics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal & Household Prods. industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Clio Cosmetics to increase its market reach. Clio Cosmetics 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.
Building a culture of innovation
– managers at Clio Cosmetics 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 Personal & Household Prods. industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Personal & Household Prods. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Clio Cosmetics 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. Clio Cosmetics 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 Clio Cosmetics 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 Clio Cosmetics to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Clio Cosmetics is facing challenges because of the dominance of functional experts in the organization. Clio Cosmetics can utilize new technology in the field of Personal & Household Prods. 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. Clio Cosmetics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Clio Cosmetics has opened avenues for new revenue streams for the organization in Personal & Household Prods. industry. This can help Clio Cosmetics to build a more holistic ecosystem for Clio Cosmetics products in the Personal & Household Prods. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Personal & Household Prods. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Clio Cosmetics in the Personal & Household Prods. industry. Now Clio Cosmetics can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal & Household Prods. industry, but it has also influenced the consumer preferences. Clio Cosmetics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Clio Cosmetics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Clio Cosmetics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Clio Cosmetics are -
Stagnating economy with rate increase
– Clio Cosmetics 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 Personal & Household Prods. industry.
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. Clio Cosmetics 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.
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 Clio Cosmetics in the Personal & Household Prods. sector and impact the bottomline of the organization.
Increasing wage structure of Clio Cosmetics
– 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 Clio Cosmetics.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Clio Cosmetics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal & Household Prods. sector.
Technology acceleration in Forth Industrial Revolution
– Clio Cosmetics has witnessed rapid integration of technology during Covid-19 in the Personal & Household Prods. industry. As one of the leading players in the industry, Clio Cosmetics needs to keep up with the evolution of technology in the Personal & Household Prods. 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.
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 Clio Cosmetics business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Clio Cosmetics 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 Clio Cosmetics prominent markets.
Environmental challenges
– Clio Cosmetics 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. Clio Cosmetics can take advantage of this fund but it will also bring new competitors in the Personal & Household Prods. industry.
Shortening product life cycle
– it is one of the major threat that Clio Cosmetics is facing in Personal & Household Prods. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal & Household Prods. industry are lowering. It can presents Clio Cosmetics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal & Household Prods. sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clio Cosmetics in Personal & Household Prods. industry. The Personal & Household Prods. 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.
Weighted SWOT Analysis of Clio Cosmetics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Clio Cosmetics 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 Clio Cosmetics 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 Clio Cosmetics 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 Clio Cosmetics 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 Clio Cosmetics needs to make to build a sustainable competitive advantage.