361 Degrees Int (1361) SWOT Analysis / TOWS Matrix / MBA Resources
Footwear
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for 361 Degrees Int (Hong Kong)
Based on various researches at Oak Spring University , 361 Degrees Int is operating in a macro-environment that has been destablized by – there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing household debt because of falling income levels, geopolitical disruptions, talent flight as more people leaving formal jobs,
increasing commodity prices, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that 361 Degrees Int can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 361 Degrees Int, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 361 Degrees Int 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 361 Degrees Int can be done for the following purposes –
1. Strategic planning of 361 Degrees Int
2. Improving business portfolio management of 361 Degrees Int
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Footwear sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of 361 Degrees Int
Strengths of 361 Degrees Int | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 361 Degrees Int are -
Cross disciplinary teams
– Horizontal connected teams at the 361 Degrees Int 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.
Successful track record of launching new products
– 361 Degrees Int has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. 361 Degrees Int 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)
– 361 Degrees Int has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – 361 Degrees Int staying ahead in the Footwear industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of 361 Degrees Int in the Consumer Cyclical sector have low bargaining power. 361 Degrees Int has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 361 Degrees Int to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Footwear industry
- digital transformation varies from industry to industry. For 361 Degrees Int digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. 361 Degrees Int 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.
High brand equity
– 361 Degrees Int has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 361 Degrees Int to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– 361 Degrees Int is one of the leading players in the Footwear industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy of 361 Degrees Int comprises – understanding the underlying the factors in the Footwear 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.
Analytics focus
– 361 Degrees Int 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 Footwear industry. The technology infrastructure of Hong Kong 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.
Strong track record of project management in the Footwear industry
– 361 Degrees Int is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– 361 Degrees Int is present in almost all the verticals within the Footwear industry. This has provided 361 Degrees Int 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.
Ability to lead change in Footwear
– 361 Degrees Int is one of the leading players in the Footwear industry in Hong Kong. Over the years it has not only transformed the business landscape in the Footwear industry in Hong Kong but also across the existing markets. The ability to lead change has enabled 361 Degrees Int in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of 361 Degrees Int | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 361 Degrees Int are -
High cash cycle compare to competitors
361 Degrees Int has a high cash cycle compare to other players in the Footwear industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, 361 Degrees Int has high operating costs in the Footwear industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract 361 Degrees Int lucrative customers.
High dependence on 361 Degrees Int ‘s star products
– The top 2 products and services of 361 Degrees Int still accounts for major business revenue. This dependence on star products in Footwear industry has resulted into insufficient focus on developing new products, even though 361 Degrees Int has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that 361 Degrees Int needs to have more collaboration between its sales team and marketing team. Sales professionals in the Footwear industry have deep experience in developing customer relationships. Marketing department at 361 Degrees Int can leverage the sales team experience to cultivate customer relationships as 361 Degrees Int is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of 361 Degrees Int is just above the Footwear 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.
Ability to respond to the competition
– As the decision making is very deliberative at 361 Degrees Int, in the dynamic environment of Footwear industry it has struggled to respond to the nimble upstart competition. 361 Degrees Int has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 361 Degrees Int supply chain. Even after few cautionary changes, 361 Degrees Int is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left 361 Degrees Int vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, 361 Degrees Int is slow explore the new channels of communication. These new channels of communication can help 361 Degrees Int to provide better information regarding Footwear products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– 361 Degrees Int 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.
Slow decision making process
– As mentioned earlier in the report, 361 Degrees Int has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Footwear industry over the last five years. 361 Degrees Int 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 bargaining power of channel partners in Footwear industry
– because of the regulatory requirements in Hong Kong, 361 Degrees Int 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 Footwear industry.
361 Degrees Int Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of 361 Degrees Int are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Footwear industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 361 Degrees Int 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. 361 Degrees Int 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, 361 Degrees Int can use these opportunities to build new business models that can help the communities that 361 Degrees Int operates in. Secondly it can use opportunities from government spending in Footwear sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 361 Degrees Int in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Footwear industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– 361 Degrees Int 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.
Creating value in data economy
– The success of analytics program of 361 Degrees Int has opened avenues for new revenue streams for the organization in Footwear industry. This can help 361 Degrees Int to build a more holistic ecosystem for 361 Degrees Int products in the Footwear industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 361 Degrees Int 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 361 Degrees Int to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 361 Degrees Int is facing challenges because of the dominance of functional experts in the organization. 361 Degrees Int can utilize new technology in the field of Footwear industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 361 Degrees Int 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 361 Degrees Int 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 361 Degrees Int to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– 361 Degrees Int has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Footwear sector. This continuous investment in analytics has enabled 361 Degrees Int to build a competitive advantage using analytics. The analytics driven competitive advantage can help 361 Degrees Int to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at 361 Degrees Int 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 Footwear industry.
Manufacturing automation
– 361 Degrees Int can use the latest technology developments to improve its manufacturing and designing process in Footwear 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.
Learning at scale
– Online learning technologies has now opened space for 361 Degrees Int 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.
Threats 361 Degrees Int External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of 361 Degrees Int are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Footwear industry are lowering. It can presents 361 Degrees Int with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Footwear sector.
Shortening product life cycle
– it is one of the major threat that 361 Degrees Int is facing in Footwear sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– 361 Degrees Int 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. 361 Degrees Int can take advantage of this fund but it will also bring new competitors in the Footwear industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 361 Degrees Int in Footwear industry. The Footwear 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.
Consumer confidence and its impact on 361 Degrees Int 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 Footwear industry and other sectors.
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 361 Degrees Int.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 361 Degrees Int 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 361 Degrees Int prominent markets.
Stagnating economy with rate increase
– 361 Degrees Int 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 Footwear industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, 361 Degrees Int may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Footwear sector.
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 361 Degrees Int business can come under increasing regulations regarding data privacy, data security, etc.
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. 361 Degrees Int 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.
Increasing wage structure of 361 Degrees Int
– 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 361 Degrees Int.
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 361 Degrees Int in the Footwear sector and impact the bottomline of the organization.
Weighted SWOT Analysis of 361 Degrees Int Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at 361 Degrees Int 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 361 Degrees Int 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 361 Degrees Int 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 361 Degrees Int 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 361 Degrees Int needs to make to build a sustainable competitive advantage.