Pandora (3P7) SWOT Analysis / TOWS Matrix / MBA Resources
Jewelry & Silverware
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Pandora (Germany)
Based on various researches at Oak Spring University , Pandora is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, wage bills are increasing, technology disruption, geopolitical disruptions, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Pandora can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pandora, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pandora 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 Pandora can be done for the following purposes –
1. Strategic planning of Pandora
2. Improving business portfolio management of Pandora
3. Assessing feasibility of the new initiative in Germany
4. Making a Jewelry & Silverware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pandora
Strengths of Pandora | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pandora are -
Strong track record of project management in the Jewelry & Silverware industry
– Pandora is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Jewelry & Silverware industry
- digital transformation varies from industry to industry. For Pandora digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pandora 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.
Low bargaining power of suppliers
– Suppliers of Pandora in the Consumer Cyclical sector have low bargaining power. Pandora has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pandora to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Jewelry & Silverware industry
– Pandora has clearly differentiated products in the market place. This has enabled Pandora to fetch slight price premium compare to the competitors in the Jewelry & Silverware industry. The sustainable margins have also helped Pandora to invest into research and development (R&D) and innovation.
Training and development
– Pandora 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.
Organizational Resilience of Pandora
– The covid-19 pandemic has put organizational resilience at the centre of everthing Pandora does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Pandora is present in almost all the verticals within the Jewelry & Silverware industry. This has provided Pandora 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.
Innovation driven organization
– Pandora is one of the most innovative firm in Jewelry & Silverware sector.
Highly skilled collaborators
– Pandora has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Jewelry & Silverware industry. Secondly the value chain collaborators of Pandora have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Jewelry & Silverware
– Pandora is one of the leading players in the Jewelry & Silverware industry in Germany. Over the years it has not only transformed the business landscape in the Jewelry & Silverware industry in Germany but also across the existing markets. The ability to lead change has enabled Pandora in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Pandora 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.
Analytics focus
– Pandora 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 Jewelry & Silverware industry. The technology infrastructure of Germany 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.
Weaknesses of Pandora | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pandora are -
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 Pandora supply chain. Even after few cautionary changes, Pandora is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pandora vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Jewelry & Silverware industry
– because of the regulatory requirements in Germany, Pandora 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 Jewelry & Silverware industry.
High cash cycle compare to competitors
Pandora has a high cash cycle compare to other players in the Jewelry & Silverware industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Jewelry & Silverware industry
– The stress on hiring functional specialists at Pandora 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.
High dependence on Pandora ‘s star products
– The top 2 products and services of Pandora still accounts for major business revenue. This dependence on star products in Jewelry & Silverware industry has resulted into insufficient focus on developing new products, even though Pandora has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Pandora needs to have more collaboration between its sales team and marketing team. Sales professionals in the Jewelry & Silverware industry have deep experience in developing customer relationships. Marketing department at Pandora can leverage the sales team experience to cultivate customer relationships as Pandora is planning to shift buying processes online.
Employees’ less understanding of Pandora strategy
– From the outside it seems that the employees of Pandora 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pandora is slow explore the new channels of communication. These new channels of communication can help Pandora to provide better information regarding Jewelry & Silverware products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of Pandora is just above the Jewelry & Silverware 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 Pandora has some of the most successful models in the Jewelry & Silverware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Pandora should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Pandora 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.
Pandora Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Pandora are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pandora can use these opportunities to build new business models that can help the communities that Pandora operates in. Secondly it can use opportunities from government spending in Jewelry & Silverware sector.
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 Pandora 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.
Developing new processes and practices
– Pandora can develop new processes and procedures in Jewelry & Silverware 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.
Use of Bitcoin and other crypto currencies for transactions in Jewelry & Silverware industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pandora in the Jewelry & Silverware industry. Now Pandora can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Pandora 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.
Buying journey improvements
– Pandora can improve the customer journey of consumers in the Jewelry & Silverware 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.
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. Pandora can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Pandora 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.
Building a culture of innovation
– managers at Pandora 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 Jewelry & Silverware industry.
Better consumer reach
– The expansion of the 5G network will help Pandora to increase its market reach. Pandora 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Jewelry & Silverware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pandora 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. Pandora 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.
Manufacturing automation
– Pandora can use the latest technology developments to improve its manufacturing and designing process in Jewelry & Silverware 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 Pandora in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Jewelry & Silverware industry, and it will provide faster access to the consumers.
Threats Pandora External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Pandora are -
High dependence on third party suppliers
– Pandora 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pandora 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 Pandora prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Pandora may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Jewelry & Silverware sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pandora in Jewelry & Silverware industry. The Jewelry & Silverware 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.
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 Pandora business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Pandora.
Increasing wage structure of Pandora
– 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 Pandora.
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.
Easy access to finance
– Easy access to finance in Jewelry & Silverware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pandora can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Pandora is facing in Jewelry & Silverware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Pandora has witnessed rapid integration of technology during Covid-19 in the Jewelry & Silverware industry. As one of the leading players in the industry, Pandora needs to keep up with the evolution of technology in the Jewelry & Silverware 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.
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 Pandora in the Jewelry & Silverware sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Pandora Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pandora 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 Pandora 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 Pandora 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 Pandora 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 Pandora needs to make to build a sustainable competitive advantage.