CLS Holdings USA (CLSH) SWOT Analysis / TOWS Matrix / MBA Resources
Textiles - Non Apparel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for CLS Holdings USA (United States)
Based on various researches at Oak Spring University , CLS Holdings USA is operating in a macro-environment that has been destablized by – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing energy prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, technology disruption,
increasing household debt because of falling income levels, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that CLS Holdings USA can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the CLS Holdings USA, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which CLS Holdings USA 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 CLS Holdings USA can be done for the following purposes –
1. Strategic planning of CLS Holdings USA
2. Improving business portfolio management of CLS Holdings USA
3. Assessing feasibility of the new initiative in United States
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of CLS Holdings USA
Strengths of CLS Holdings USA | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of CLS Holdings USA are -
Cross disciplinary teams
– Horizontal connected teams at the CLS Holdings USA 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.
Diverse revenue streams
– CLS Holdings USA is present in almost all the verticals within the Textiles - Non Apparel industry. This has provided CLS Holdings USA 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.
High switching costs
– The high switching costs that CLS Holdings USA 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.
High brand equity
– CLS Holdings USA has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled CLS Holdings USA to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– CLS Holdings USA has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – CLS Holdings USA staying ahead in the Textiles - Non Apparel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– CLS Holdings USA 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 Textiles - Non Apparel industry. The technology infrastructure of United States 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.
Organizational Resilience of CLS Holdings USA
– The covid-19 pandemic has put organizational resilience at the centre of everthing CLS Holdings USA does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of CLS Holdings USA in the Consumer Cyclical sector have low bargaining power. CLS Holdings USA has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps CLS Holdings USA to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of CLS Holdings USA in Textiles - Non Apparel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– CLS Holdings USA has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. CLS Holdings USA 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.
Operational resilience
– The operational resilience strategy of CLS Holdings USA comprises – understanding the underlying the factors in the Textiles - Non 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.
Digital Transformation in Textiles - Non Apparel industry
- digital transformation varies from industry to industry. For CLS Holdings USA digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. CLS Holdings USA 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.
Weaknesses of CLS Holdings USA | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CLS Holdings USA are -
Lack of clear differentiation of CLS Holdings USA products
– To increase the profitability and margins on the products, CLS Holdings USA needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Textiles - Non Apparel industry, CLS Holdings USA 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.
High bargaining power of channel partners in Textiles - Non Apparel industry
– because of the regulatory requirements in United States, CLS Holdings USA is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Textiles - Non Apparel industry.
High cash cycle compare to competitors
CLS Holdings USA has a high cash cycle compare to other players in the Textiles - Non Apparel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– CLS Holdings USA 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.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at CLS Holdings USA 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.
Capital Spending Reduction
– Even during the low interest decade, CLS Holdings USA 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 Textiles - Non Apparel industry using digital technology.
Interest costs
– Compare to the competition, CLS Holdings USA 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.
Slow to strategic competitive environment developments
– As CLS Holdings USA is one of the leading players in the Textiles - Non Apparel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Textiles - Non Apparel industry in last five years.
Compensation and incentives
– The revenue per employee of CLS Holdings USA is just above the Textiles - Non 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 CLS Holdings USA has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. CLS Holdings USA should strive to include more intangible value offerings along with its core products and services.
CLS Holdings USA Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of CLS Holdings USA are -
Learning at scale
– Online learning technologies has now opened space for CLS Holdings USA 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. CLS Holdings USA can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for CLS Holdings USA in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Textiles - Non Apparel industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of CLS Holdings USA has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help CLS Holdings USA to build a more holistic ecosystem for CLS Holdings USA products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– CLS Holdings USA has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Textiles - Non Apparel sector. This continuous investment in analytics has enabled CLS Holdings USA to build a competitive advantage using analytics. The analytics driven competitive advantage can help CLS Holdings USA to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Textiles - Non Apparel industry, but it has also influenced the consumer preferences. CLS Holdings USA 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 CLS Holdings USA can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for CLS Holdings USA 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 CLS Holdings USA to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, CLS Holdings USA 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 CLS Holdings USA to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 CLS Holdings USA 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, CLS Holdings USA 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.
Loyalty marketing
– CLS Holdings USA 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.
Developing new processes and practices
– CLS Holdings USA can develop new processes and procedures in Textiles - Non 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.
Threats CLS Holdings USA External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of CLS Holdings USA are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, CLS Holdings USA may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel sector.
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 CLS Holdings USA.
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. CLS Holdings USA 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 CLS Holdings USA in the Textiles - Non Apparel sector and impact the bottomline of the organization.
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.
Environmental challenges
– CLS Holdings USA 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. CLS Holdings USA can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents CLS Holdings USA with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.
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. CLS Holdings USA needs to understand the core reasons impacting the Textiles - Non Apparel industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, CLS Holdings USA 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 CLS Holdings USA prominent markets.
Stagnating economy with rate increase
– CLS Holdings USA 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 Textiles - Non Apparel industry.
Increasing wage structure of CLS Holdings USA
– 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 CLS Holdings USA.
Consumer confidence and its impact on CLS Holdings USA 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 Textiles - Non Apparel industry and other sectors.
Easy access to finance
– Easy access to finance in Textiles - Non Apparel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. CLS Holdings USA can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of CLS Holdings USA Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at CLS Holdings USA 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 CLS Holdings USA 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 CLS Holdings USA 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 CLS Holdings USA 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 CLS Holdings USA needs to make to build a sustainable competitive advantage.