Adler Modemaerkte AG (ADDG) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Apparel)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Adler Modemaerkte AG (Germany)
Based on various researches at Oak Spring University , Adler Modemaerkte AG is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, there is backlash against globalization, geopolitical disruptions, talent flight as more people leaving formal jobs, technology disruption, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Adler Modemaerkte AG
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Adler Modemaerkte AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adler Modemaerkte AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adler Modemaerkte AG 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 Adler Modemaerkte AG can be done for the following purposes –
1. Strategic planning of Adler Modemaerkte AG
2. Improving business portfolio management of Adler Modemaerkte AG
3. Assessing feasibility of the new initiative in Germany
4. Making a Retail (Apparel) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Adler Modemaerkte AG
Strengths of Adler Modemaerkte AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adler Modemaerkte AG are -
Innovation driven organization
– Adler Modemaerkte AG is one of the most innovative firm in Retail (Apparel) sector.
Ability to lead change in Retail (Apparel)
– Adler Modemaerkte AG is one of the leading players in the Retail (Apparel) industry in Germany. Over the years it has not only transformed the business landscape in the Retail (Apparel) industry in Germany but also across the existing markets. The ability to lead change has enabled Adler Modemaerkte AG in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Adler Modemaerkte AG has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Adler Modemaerkte AG staying ahead in the Retail (Apparel) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Adler Modemaerkte AG is present in almost all the verticals within the Retail (Apparel) industry. This has provided Adler Modemaerkte AG 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.
Superior customer experience
– The customer experience strategy of Adler Modemaerkte AG in Retail (Apparel) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Adler Modemaerkte AG 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.
Operational resilience
– The operational resilience strategy of Adler Modemaerkte AG comprises – understanding the underlying the factors in the Retail (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.
Cross disciplinary teams
– Horizontal connected teams at the Adler Modemaerkte AG 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.
Sustainable margins compare to other players in Retail (Apparel) industry
– Adler Modemaerkte AG has clearly differentiated products in the market place. This has enabled Adler Modemaerkte AG to fetch slight price premium compare to the competitors in the Retail (Apparel) industry. The sustainable margins have also helped Adler Modemaerkte AG to invest into research and development (R&D) and innovation.
Organizational Resilience of Adler Modemaerkte AG
– The covid-19 pandemic has put organizational resilience at the centre of everthing Adler Modemaerkte AG does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Adler Modemaerkte AG 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.
High brand equity
– Adler Modemaerkte AG has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Adler Modemaerkte AG to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Adler Modemaerkte AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Adler Modemaerkte AG are -
Skills based hiring in Retail (Apparel) industry
– The stress on hiring functional specialists at Adler Modemaerkte AG 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.
Lack of clear differentiation of Adler Modemaerkte AG products
– To increase the profitability and margins on the products, Adler Modemaerkte AG 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 Retail (Apparel) industry, Adler Modemaerkte AG 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.
Increasing silos among functional specialists
– The organizational structure of Adler Modemaerkte AG is dominated by functional specialists. It is not different from other players in the Retail (Apparel) industry, but Adler Modemaerkte AG needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Adler Modemaerkte AG to focus more on services in the Retail (Apparel) industry rather than just following the product oriented approach.
Products dominated business model
– Even though Adler Modemaerkte AG has some of the most successful models in the Retail (Apparel) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Adler Modemaerkte AG should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Adler Modemaerkte AG needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Apparel) industry have deep experience in developing customer relationships. Marketing department at Adler Modemaerkte AG can leverage the sales team experience to cultivate customer relationships as Adler Modemaerkte AG is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Adler Modemaerkte AG has high operating costs in the Retail (Apparel) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Adler Modemaerkte AG lucrative customers.
High dependence on Adler Modemaerkte AG ‘s star products
– The top 2 products and services of Adler Modemaerkte AG still accounts for major business revenue. This dependence on star products in Retail (Apparel) industry has resulted into insufficient focus on developing new products, even though Adler Modemaerkte AG has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Adler Modemaerkte AG is slow explore the new channels of communication. These new channels of communication can help Adler Modemaerkte AG to provide better information regarding Retail (Apparel) products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Adler Modemaerkte AG 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.
High cash cycle compare to competitors
Adler Modemaerkte AG has a high cash cycle compare to other players in the Retail (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.
Adler Modemaerkte AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Adler Modemaerkte AG are -
Using analytics as competitive advantage
– Adler Modemaerkte AG has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Apparel) sector. This continuous investment in analytics has enabled Adler Modemaerkte AG to build a competitive advantage using analytics. The analytics driven competitive advantage can help Adler Modemaerkte AG to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Adler Modemaerkte AG can use the latest technology developments to improve its manufacturing and designing process in Retail (Apparel) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Apparel) industry, but it has also influenced the consumer preferences. Adler Modemaerkte AG can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Adler Modemaerkte AG 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.
Better consumer reach
– The expansion of the 5G network will help Adler Modemaerkte AG to increase its market reach. Adler Modemaerkte AG 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Adler Modemaerkte AG 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 (Apparel) industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Adler Modemaerkte AG is facing challenges because of the dominance of functional experts in the organization. Adler Modemaerkte AG can utilize new technology in the field of Retail (Apparel) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Adler Modemaerkte AG has opened avenues for new revenue streams for the organization in Retail (Apparel) industry. This can help Adler Modemaerkte AG to build a more holistic ecosystem for Adler Modemaerkte AG products in the Retail (Apparel) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Adler Modemaerkte AG can improve the customer journey of consumers in the Retail (Apparel) 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Apparel) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Adler Modemaerkte AG in the Retail (Apparel) industry. Now Adler Modemaerkte AG can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Adler Modemaerkte AG 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 Adler Modemaerkte AG to hire the very best people irrespective of their geographical location.
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. Adler Modemaerkte AG can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Adler Modemaerkte AG can develop new processes and procedures in Retail (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 Adler Modemaerkte AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Adler Modemaerkte AG are -
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. Adler Modemaerkte AG 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.
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 Adler Modemaerkte AG business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Adler Modemaerkte AG 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 Retail (Apparel) industry.
Environmental challenges
– Adler Modemaerkte AG 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. Adler Modemaerkte AG can take advantage of this fund but it will also bring new competitors in the Retail (Apparel) industry.
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. Adler Modemaerkte AG needs to understand the core reasons impacting the Retail (Apparel) industry. This will help it in building a better workplace.
Regulatory challenges
– Adler Modemaerkte AG 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 (Apparel) industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Apparel) industry are lowering. It can presents Adler Modemaerkte AG with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Apparel) sector.
Increasing wage structure of Adler Modemaerkte AG
– 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 Adler Modemaerkte AG.
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 Retail (Apparel) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Adler Modemaerkte AG can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Adler Modemaerkte AG.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Adler Modemaerkte AG 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 Adler Modemaerkte AG prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Adler Modemaerkte AG 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 (Apparel) sector.
Weighted SWOT Analysis of Adler Modemaerkte AG Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Adler Modemaerkte AG 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 Adler Modemaerkte AG 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 Adler Modemaerkte AG 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 Adler Modemaerkte AG 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 Adler Modemaerkte AG needs to make to build a sustainable competitive advantage.