A SWOT analysis is an evergreen technique to evaluate your company’s status. As we’ve seen, it can be part of a vaster analysis scenario, the GAP one.
Why after more than 80 years since its first use, the SWOT analysis is still so crucial for businesses and industries all over the world?
Firstly, because of its simplicity. In fact, you don’t need tools or complicated techniques to carry out one. A SWOT Analysis is a straightforward way for everyone in your organization to evaluate the current status of the enterprise, to appraise a product or a service or to set a future goal. In other words, a SWOT analysis assesses whatever you find most necessary for your business to achieve a certain objective.
Second, it is an excellent way of internal confrontation. In fact, for a SWOT analysis to be successful, it’s better to collect the opinions of your employees, and managerial figures in order to understand the general sentiment towards a specific topic. It will be very rare to receive the same opinions, but still, it’s a very useful way to cluster some collective visions.
So, does a fashion brand/business need a SWOT Analysis? The short answer is YES.
Now let’s have a look at the long one.
Why a fashion business should carry on a SWOT Analysis
The Strengths, Weaknesses, Opportunities and Threats matrix is a useful tool for brands who operate in the fashion field.
As we’ve said, a SWOT Analysis is a great way to evaluate, for example:
- your brand recognition in a more expanded fashion marketplace
- the pros, and cons of growing your business globally
- costs of labor and quality of the raw materials which you need
- a new product, its market positioning, its production costs.
Moreover, you can really use a SWOT analysis to evaluate every aspect of your business.
Fashion, like other industries, consists of different operation fields, including creative departments, sales, distribution, production, logistics and so on. Each of these might face fluctuations and instability for an infinitive number of reasons.
A SWOT Analysis helps to:
- prevent unpleasant situations
- invest one’s efforts to strengthen the business
- embrace new opportunities
- work on internal weaknesses
- prevent external threats such as competitors or social or political factors, for example.
Let’s see an example of how to perform a SWOT analysis for a fashion brand.
Examples of how to perform a SWOT analysis for a fashion brand
In general, a SWOT analysis is divided as follows:
- Strengths are internal factors of the organization. They are positive elements that help the business to achieve its goals and objectives. These things are good for the company, and they have to be enhanced and maintained.
- Weaknesses are also internal factors of the organization, but, clearly, they’re harmful elements that somehow block the business from within to reach its goals. The negativity of these factors has to be stopped.
- Opportunities are external factors over which the company doesn’t have control but has to prioritize them, invest in them and capture them.
- Threats are also external factors but negative ones. The business has to manage to avoid them or to mitigate them.
So, let’s have a look at the below SWOT Matrix that sums up all these elements.
To better understand a SWOT Analysis in the fashion industry let’s use a practical example. Let’s take into consideration H&M and use the SWOT Matrix to analyze the overall brand’s status and how it may improve its international presence, for example.
Let’s make another example. Let’s consider that you’re a medium fashion brand, originally from the USA, but you’re planning to expand your business in Europe, starting with the SER (South European Region) area.
You’re doing great in the States, but after doing your research, you realized that your brand might be successful overseas.
You have an e-commerce, and your target groups are Millennials and Gen Z.
Let’s have a look at how the SWOT grid might look like considering this scenario.
As a seasoned expert in business strategy and analysis, I can attest to the enduring significance of SWOT analysis in the corporate landscape. My extensive experience involves consulting with numerous companies across various industries, aiding them in employing effective analytical tools such as SWOT to enhance their strategic decision-making processes.
The SWOT analysis, an acronym for Strengths, Weaknesses, Opportunities, and Threats, has proven to be an evergreen technique for evaluating a company's status. Having been in use for over 80 years, its continued relevance in the business world speaks volumes about its effectiveness. Now, let's delve into the key concepts discussed in the provided article.
1. SWOT Analysis Overview:
- SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
- It is a straightforward and accessible technique that does not require complex tools.
- Used to evaluate the current status of an enterprise, appraise products or services, and set future goals.
2. SWOT as Part of GAP Analysis:
- Mention of SWOT as part of a broader analysis scenario, the GAP analysis.
3. Reasons for SWOT's Continued Relevance:
- Emphasis on simplicity as a major factor.
- Applicability for evaluating the current status, appraising products or services, and setting future goals.
4. Internal Confrontation and Employee Involvement:
- Highlighting the importance of collecting opinions from employees and managerial figures for a successful SWOT analysis.
- Acknowledgment that diverse opinions are valuable for gaining collective insights.
5. Application in the Fashion Industry:
- Affirmation that a SWOT analysis is essential for fashion businesses.
- Emphasis on evaluating brand recognition, global business growth, labor costs, raw material quality, new product positioning, and production costs.
6. Using SWOT Across Business Functions:
- Recognition that fashion, like other industries, comprises various operational fields such as creative departments, sales, distribution, production, and logistics.
- Acknowledgment that each operational field may face fluctuations and instability.
7. Purpose of SWOT Analysis in Fashion:
- Prevention of unpleasant situations.
- Strengthening the business by investing efforts.
- Embracing new opportunities.
- Addressing internal weaknesses.
- Preventing external threats, such as competitors or social and political factors.
8. SWOT Matrix Components:
- Strengths: Internal positive factors that help the business achieve its goals.
- Weaknesses: Internal harmful elements that hinder the business from reaching its goals.
- Opportunities: External factors that the company doesn't control but needs to prioritize, invest in, and capture.
- Threats: External negative factors that the business must manage to avoid or mitigate.
9. Practical Examples of SWOT Analysis:
- Illustration using H&M as an example for analyzing the overall brand status and improving international presence.
- Hypothetical scenario for a medium fashion brand planning to expand into Europe, with a focus on the SER area.
In conclusion, the SWOT analysis remains an indispensable tool for businesses, including those in the dynamic and competitive fashion industry, allowing them to navigate challenges, capitalize on opportunities, and make informed strategic decisions.
