Categories
Swot Analysis

Swot of Mamee

MAMEE Double-Decker has many things going for it, among them, a good financial track record, a strong balance sheet, great brands and reasonably good dividend payouts, which definitely makes it worth noting. MOST KIDS PROBABLY KNOW the `blue monster’ and most adults have probably met them as well. Fear not as we are just talking about the ever-famous Mamee Monster snack food, which comes mainly in small packets that are consumed daily by its ardent fans.
That probably sums up the public face of listed Mamee Double-Decker Bhd, the company which produces this classic snack food. But while the blue monster remains the ever-lovable monster, the company has outgrown it and today, Mamee is actually one of the leading snack manufacturers in the country with a strong presence in the export market as well. And it has certainly more than enough snack food brand names in its current stable, and in noodles and cultured milk production as well.
Do Mamee Monster, Mamee Instant, Mister Potato and Sllrrp! Noodles and Double Decker sound familiar? How about Cheers and Nutrigen? These are the company’s famous brands, which are likely to strike a chord with most consumers who consume them frequently. Still, the company itself – despite being listed since 1992 – is probably less familiar to investors than consumers.

So, it is rather interesting somewhat to know that Mamee is actually a fundamentally strong and healthy company with growth potential as it expands its distribution network further and invests in new potato crisp lines to broaden its range of snacks. This is true for at least local research house, OSK Research, which initiated coverage on the company recently and pegged an RM4. 00 target price for the stock. It cites that Mamee is worth a `BUY’ despite the stock having almost rallied 30% of late, citing the current strong sentiment on consumer counters.

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Swot Analysis

US consumers SWOT at Tesco

Tesco has a strong brand image around the world for offering diversified range of goods and services. In the UK, Tesco is a household name and people that immigrate to the US (2) could shop at Tesco’s stores due to brand loyalty. Also Tesco, due to its large size, is enjoying Tesco could utilise their ownership specific strengths in the UK to benefit its expansion in the US. For example, it could transfer some of its top managers to the US, or it could use its distribution contacts to low transport cost in the US.
Also as the UK food market is reaching maturity(3), Tesco could use UK as a cash-cow for milking. In the sense that it could use the profits (�2,280 million in 2006)(4) generated in the UK partially for the expansion in the US. However, if Tesco price discriminates by charging UK consumers more in order to finance its expansion abroad it could receive negative media attention resulting in bad publicity. And as its industry position in the UK is virtually secure, it can concentrate its attention on the US without worrying about competing in the UK.
Weaknesses

In the US, Tesco is opening its stores as “Fresh & Easy” so it is starting out with almost zero brand recognition and loyalty. Therefore, it already faces an uphill task in competing with the Wal-Mart brand name, size and an almost monopsony power in the US (in 2006 Wal-mart had net sales of $308,945 million, compared to Tesco’s �43.1 million)(5). So Tesco will have to spend a lot of money to in order to promote its new brand.
Furthermore Tesco’s huge size can also be a disadvantage, as it will not be able to quickly react to the consumer’s changing tastes due to its complex management structure. Information to- and decisions from- top managers could take a long time to move around and so Tesco will not be able to make quick decisions in reaction to consumer or market changes. However, Fresh & Easy is operating as a separate line of business with its own CEO, Tim Mason, which will shorten the chain of command and enable Fresh & Easy react quicker to changes in the US food retail market.
Opportunities Tesco saw the opportunity to open up smaller stores closer together that are specialising in fresh, healthy food and quick service(6); a market that is still untapped in the US – as traditionally US retailers favoured food-to-clothes megastores. The faster and easier shopping system aims at single professionals that do not have the time to shop at big megastores.
Tesco’s new stores will also feature ready-made meals, a relative novelty in the US; it is in response to the changing consumer trends in the US (In 2002/3: Sales of fresh-cut salads increased by 10%. Sales of bagged spinach and microwave-in-a-bag fresh products grew 37%. Fresh-cut fruit sales grew by 25%)(7), as more and more people don’t have time to cook proper meals. Therefore Tesco could take the opportunity of a first-entrant advantage.
Threats
Possibly the biggest threat that is facing Tesco’s expansion plan is the constricting world economy and, potentially, a US recession. This will force consumers to shop at their trusted and possibly cheaper (A 2002 study by UBS found that Wal-Mart’s average prices are 14% below its rivals)(8) retailers instead of trying something new. Tesco, in turn, will be generating less revenue, which would halt its expansion into the US because the expansion would become unprofitable. Another threat is in Wal-Mart copying Tesco’s blueprint for expansion(9) and by launching its own smaller sized stores.
This could prove very damaging as Wal-Mart could use its huge market power(in 2002 Wal-Mart’s market share was: 32% in disposable diapers, 30% in hair care, 26% in toothpaste, 20% in pet food, 13% in home textiles, 15% in CDs, Videos, DVDs and in magazines)(10), contacts, and brand name in the US to undercut Tesco’s prices and make expansion unprofitable. Furthermore high barriers to entry such as; high start up costs, price undercutting, and a possible collusion by existing firms could make it very difficult for Tesco to expand in the US.
Is expansion into the US a viable option for Tesco? The expansion into the US could be a profitable venture as Tesco is not challenging Wal-Mart in its core business of “stack them high, sell them cheap” hypermarkets. Instead, Tesco found a niche market in smaller closer stores and fresh and healthy food, and is seeking to expand there because Tesco could never compete with Wal-Mart in the US on size alone (in 2007 Wal-Mart Group operated 2,419 super centres, 988 discount stores, 586 Sam’s Clubs, and 128 Neighbourhood Markets)(11).
Therefore, Tesco is not pursuing the most lucrative option, which would be to open up a few huge low-cost-high-volume stores, rather Tesco has identified a mix between its strengths (high financial and managerial economies of scale) and the opportunities in the market (niche market and a new consumer trend) and therefore has increased its chances of developing a competitive advantage (in product differentiation) over other US retailers.
Is SWOT analysis an effective planning tool? One of the strengths of SWOT is that even with a simple input it can help to uncover opportunities that other firms have not yet taken advantage of, and by identifying and understanding its weaknesses, the firm can foresee and deal with potential threats that otherwise would have caught it unawares. On the other hand, SWOT by itself is not comprehensive enough to take into the account all factors influencing the firm and sometimes the options generated are too vague and do not fulfil their potential. Overall, SWOT is a very useful tool because with a clear objective and in conjunction with other strategic planning tools it provides information that is helpful to a firm in matching its resources and capabilities to the market in which it operates or is trying to expand to.
Bibliography:
Sloman J. and Hinde K. (2007) “Economics for Business”, Pearson Education, ch 8, 11 and 13. Stapleton, J. and Thomas, M.J. (1998) “How to Prepare a Marketing Plan”, Gower Publishing Ltd, ch6. Tesco plans US stores expansion http://news.bbc.co.uk

Categories
Swot Analysis

The Disadvantages of Using SWOT Analysi

Other Planning Methods Perhaps one of the biggest disadvantages of using a SOOT analysis comes when the organization makes the decision, whether conscious or not, to only rely on the analysis for planning. While it may generate some useful information, other planning methods and tools are useful in helping an organization achieve its mission. The list of items generated by this analysis provides information or items it needs to look into deeper using other tools such as statistical surveys, focus groups or even employing a test-market strategy for a new product or service.
SOOT analysis should help management begin to think about the organization and its future, instead of ending any other planning efforts. Large or Heterogeneous Groups This type of analysis requires a considerable amount of time and energy when used in a large organization or in a small business that is heterogeneous, since an attempt at Just agreeing on the common mission may result in fighting among the different members of the group. While identifying a common mission helps give direction to its activities, SOOT analysis will not provide any results if the members cannot agree.
Related Reading: Comparison of SOOT Analysis With Portfolio Analysis Weighting Items SOOT analysis generates lists of strengths, weaknesses, opportunities and threats acing the organization. While these lists provide items to consider, the list may get used incorrectly. The items do not carry certain weight or points that represent how significant each item is to the organization. Members may conclude that a shorter list of threats versus a longer list of strengths means the organization is doing well, when in fact the threats are more significant than its strengths.

List Blindness This analysis allows an organization to generate lists of items concerning the group, but the lists alone do not help it realize its goals. Some organizations, however, stop after making the lists, thinking the planning process has been completed. The organization needs to move beyond the SOOT analysis lists and discuss what activities would help it achieve its objectives. The lists may help in identifying activities that manage risks and take advantage of the organization’s assets. REF: http://smelliness’s. Chronic. Com/disadvantages-using-soot-analysis-17835. HTML The Disadvantages of Using a PESTLE Analysis Written by Praying Gain PESTLE analysis studies external factors affecting a company. PESTLE stands for “political, economic, social, technological, legal and environmental” analysis. This The Disadvantages of Using SOOT Analysis By keelhauls environment. Management uses this model to understand prevailing conditions and prepare itself for the future. This model gives the company an edge over its competitors. Though this is a helpful model, it does have certain flaws. Constant Reviewing External factors change rapidly.
This acts as a main deterrent to the PESTLE analysis. Management needs to keep reviewing and revising the study on a constant basis. For example, the government may increase taxes. These taxes have a bearing on the profitability scenario of the company. The analyst provides recommendations to help the company prepare itself. Then, within the next month, the government may extend a subsidy to the company. The subsidy impacts the company’s position positively. For the analysis to be successful and correct, management needs to keep reviewing the results of the model.
It should consider the effects of both the taxes and the subsidies. Numerous People Needed Another disadvantage of the PESTLE analysis is that it requires numerous people to be involved in the study. Knowledge from different domains is needed for the results to be accurate. Also, different people have the tendency to view a scenario differently; the PESTLE analysis needs varied perspectives and points of view. The company needs to bear the costs of salaries of all the individuals involved in the analysis.
The services of these employees could have been used for other Jobs in the company. Need for Resources Gaining access to external data often involves a cumbersome process. The company needs to spend a lot of time and effort in obtaining data from external resources. The company may not be able to get full details of its competitors’ policies, practices and traceries. If the company needs to comprehend its customers’ tastes and preferences, it needs to spend time and money researching. The results of the research must be incorporated with the final product.
Subjective Analysis The results of the PESTLE analysis are likely to be influenced by the opinions and personal Judgment of the person carrying out the evaluation. The results are highly subjective, and the interpretations vary from individual to individual. The company suffers huge losses if the study results are misinterpreted. REF: http:// www. Owe. Co. K/info_8468735_disadvantages-using-pestle-analysis. HTML This technique has disadvantages too: Some users over simplify the amount of data used for decisions – it is easy to use scant data.
To be effective this process needs to be undertaken on a regular basis. The best reviews require different people being involved each having a different perspective. Access to quality external data sources, this can be time consuming and costly. The pace of change makes it increasingly difficult to anticipate developments that may affect an organization in the future. The risk of capturing too much data is hat it may make it difficult to see the wood for the trees and lead to ‘paralysis by analysis’. The data used in the analysis may be based on assumptions that subsequently prove to be unfounded (good and bad).
DO get other people involved. DO exploit any expertise and resources that are already available within the organization. DO use PESTLE analysis in conjunction with other techniques, such as SOOT analysis, PRIMP-F analysis (see our SOOT analysis facets linked to above for more information), Porter’s five forces (see Useful links and Further reading below), competitor analysis or scenario planning etc. DO incorporate your analysis within an ongoing process for monitoring changes in the business environment. DON’T try to do this on your own.
DON’T Jump to conclusions about the future based on the past or the present. DON’T get bogged down in collecting vast amounts of detailed information without analyzing your findings appropriately. REF: http://imaginativeness. Bloodspot. Co. UK/ 2008/08/pestle-analysis. HTML Barriers to Effective Scanning There are several reasons why environmental scanning may not be effective in an organization. The sheer volume of information may be overwhelming, resulting in an information overload in which important pieces of information may be over-looked or missed.
There are also many sources of information that scanners may not be aware of, and so they may miss potentially important information. Navigating the ocean of existing information is also difficult because of the sometime lack of organization and completeness of that which is presented. Even in the best of circumstances, information may no longer be timely by the time scanners are able to locate it. This is particularly true of rapidly changing markets that are influenced by technology or ejaculatory changes.
There are also problems with environmental scanning related to interpretation of the information that has been gathered. Determination of relevance, familiarity with the topic and information sources, language usage, time limitations, and accuracy of information all play a role in the analysis process. In addition, an overemphasis on scanning could have negative effects on an organization. This could be due to the focus on a defensive strategy to external forces rather than a continuation of process improvement and growth within the organization.
Environmental scanning offers many advantages for modern organizations. It contributes to an organization’s transformation into a learning organization, one that continually seeks new information that may change its overall position in the marketplace. Environmental scanning also assists in the development of strategic plans and policies, the assessment of new information, and the adjustment of internal operations to meet new challenges as they arise. It can identify an organization’s unique strengths, find weaknesses in its competitors, and identify new arrests, prospective customers, and emerging technologies.

Categories
Swot Analysis

Levi’s Swot Analysis

TABLE OF CONTENTS 1. EXECUTIVE SUMMARY—————————————————————- 2. CURRENT SITUATION—————————————————————— 2-1-Strategic Posture 2. 2. Current Performance 3. CORPORATE GOVERNANCE——————————————————– 3-1-Board of Directors 3-2-Top Management 4. EXTERNAL ENVIRONMENT ANALYSIS—————————————— 4-1-Societal Environment 4-2-Task Environment 5. INTERNAL ENVIRONMENT ANALYSIS—————————————— 5-1-Corporate Structure -2-Corporate Culture 5-3-Corporate Resources 6. ANALYSIS OF STRATEGIC FACTORS —————————————— 7. STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGY — 7-1-Review of Mission and Objective 7-2-Strategic Alternatives and Recommended Strategy 8. CONCLUSION—————————————————————————- BIBLIOGRAPHY————————————————————————- 1. EXECUTIVE SUMMARY 2. CURRENT SITUATION Levi Strauss & Co. s a privately held American clothing company known worldwide for its Levi’s brand of denim jeans. The core Levi’s was founded in 1873 in San Francisco, specializing in riveted denim jeans and different lines of casual and street fashion. Levi Strauss received a U. S. Patent to make the first riveted men’s work pants out of denim: the first blue jeans. The company briefly experimented (in the 1970s) with a public stock listing, but remains owned and controlled by descendants and relatives of Levi Strauss’ four nephews. Levi Strauss & Co. s a worldwide corporation organized into three geographic divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi Strauss Europe, Middle East and Africa, based in Brussels; and Asia Pacific Division, based in Singapore. The company employs a staff of approximately 11. 400 people worldwide. 2. 1 STRATEGIC POSTURE Vision and Core Values Levi’s believes that business can drive profits through principles, and that core values as a company and as individuals give the company a competitive advantage.
Empathy — walking in other people’s shoes Empathy begins with paying close attention to the world around. Levi’s listens and responds to the needs of customers, employees and other stakeholders. Originality — being authentic and innovative The pioneering spirit that started in 1873 with the very first pair of blue jeans still permeates all aspects of the business. Through innovative products and practices, the company breaks the mold. Integrity — doing the right thing Integrity means doing right by the employees, brands, company and society as a whole.
Ethical conduct and social responsibility characterize company’s way of doing business. Courage — standing up for believes It takes courage to be great. Courage is the willingness to tell the truth and to challenge hierarchy, accepted practice and conventional wisdom. It means standing by Levi’s convictions and acting on beliefs. Levi’s is the embodiment of the energy and events of time, inspiring people from all walks of life with a pioneering spirit. Generations have worn Levi’s jeans, turning them into a symbol of freedom and self-expression in he face of adversity, challenge and social change. Customers forged a new territory called the American West. They fought in wars for peace. They instigated counterculture revolutions. They tore down the Berlin Wall. Reverent, irreverent — they took a stand. 2. 2. CURRENT PERFORMANCE For its first 100 years, Levi Strauss & Company was a private company. Relatives of founder Levi Strauss owned nearly all the stock, and company employees owned most of the remaining shares. In 1971, the company went public to finance growth and diversification.

However, in 1985, the company again went private, which it remains today. In September 2004, Levi Strauss announced plans to sell its Dockers casual-clothing brand to Vestar Capital Partners (a private equity fund) and an apparel industry executive for about $800 million. Selling the Dockers brand would have allowed the company to reduce its heavy debt and refocus attention on turning around the Levi brand. However, the company soon changed its mind and chose instead to reinvest in and revitalize the popular Dockers brand.
Recently the company produces only for men under Dockers brand. Its products are sold in more than 110 countries worldwide through a combination of chain retailers, department stores, online sites, and franchised and company-owned stores. As of August 28, 2011, the company operated 499 stores within 31 countries. Levi Strauss & Co. ’s reported fiscal 2010 net revenues were $4. 4 billion. Regional net revenues for the quarter were as follows: The reported net revenues increase in Europe was due to currency; net revenues were down on a constant-currency basis.
Gains from the expansion of the company-operated retail network and the continued success of the Levi’s Curve ID collection for women were more than offset by declines in the wholesale business. Revenue growth in Asia Pacific, primarily driven by the Levi’s brand and continued expansion of the company’s brand-dedicated retail network in China and India, offset the revenue decline in Japan. Cash Flow and Balance Sheet As of August 28, 2011, cash and cash equivalents were approximately $231 million, and $337 million was available under the company’s revolving credit facility.
Cash provided by operating activities during the nine-month period in 2011 was $17 million, compared with $96 million for the same period in 2010; the decline reflected higher inventories, due primarily to the increased cost of cotton, increased selling, general and administration expenses and increased pension plan contributions. Net debt was $1. 75 billion as compared to $1. 6 billion at the end of 2010. 3. CORPORATE GOVERNANCE 3. 1Board of Directors Fernando Aguirre, a director since July 2010, is currently Chairman of the Board, President and Chief Executive Officer of Chiquita Brands International, Inc. a position he has held since 2004. From 2002 to 2004, Mr. Aguirre served as President, Special Projects for The Procter & Gamble Company (P&G), a manufacturer and distributor of consumer products. From 1980 to 2002, he served P&G in various capacities, including in an executive capacity with P&G’s Global Snacks and U. S. Food Products business. Mr. Aguirre is also a director of Coca-Cola Enterprises, Inc. Chip Bergh, a director since September 2011, is the President and Chief Executive Officer. He joined the company in September 2011. Prior to joining Levi Strauss & Co. , Mr.
Bergh was Group President, Global Male Grooming, for The Proctor & Gamble Company (P), a manufacturer and distributor of consumer products. During his 28-year career at P, he served in a number of leadership positions. Mr. Bergh previously served on the Board of Directors for VF Corporation and on the Economic Board, Singapore, and was a member or the US-ASEAN Business Council, Singapore. Vanessa J. Castagna, a director since 2007, led Mervyns LLC department stores as its executive chairwoman of the board from 2005 until early 2007. Prior to Mervyns LLC, Ms. Castagna served as chairman and hief executive officer of JC Penney Stores, Catalog and Internet from 2002 through 2004. She joined JC Penney in 1999 as chief operating officer, and was both president and Chief Operating Officer of JC Penney Stores, Catalog and Internet in 2001. Ms. Castagna is currently a director of SpeedFC and Carter’s Inc. Robert A. Eckert, a director since May 2010, is currently Chairman of the Board and Chief Executive Officer of Mattel, Inc. , a position he has held since May 2000. He previously worked for Kraft Foods, Inc. for 23 years, most recently as President and Chief Executive Officer from October 1997 until May 2000. From 1995 to 1997, Mr.
Eckert was Group Vice President of Kraft Foods, Inc. and from 1993 to 1995, Mr. Eckert was President of the Oscar Mayer foods division of Kraft Foods, Inc. Robert D. Haas, a director since 1980, was named Chairman Emeritus in February 2008. He served as Chairman of the Board from 1989 until February 2008. Mr. Haas joined Levi’s in 1973 and served in a variety of marketing, planning and operating positions including serving as our Chief Executive Officer from 1984 to 1999. Peter E. Haas Jr. , a director since 1985, is a director or trustee of each of the Levi Strauss Foundation, Red Tab Foundation, Joanne and Peter Haas Jr.
Fund, Walter and Elise Haas Fund and the Novato Youth Center Honorary Board. Mr. Haas was one of the managers from 1972 to 1989. He was Director of Product Integrity of The Jeans Company, one of the former operating units, from 1984 to 1989. He served as Director of Materials Management for Levi Strauss USA in 1982 and Vice President and General Manager in the Menswear Division in 1980. Leon J. Level, a director since 2005, is a former Chief Financial Officer and director of Computer Sciences Corporation, a leading global information technology services company. Mr.
Level held ascending and varied financial management and executive positions at Computer Sciences Corporation from 1989 to 2006 and previously at Unisys Corporation (Corporate Vice President, Treasurer and Chairman of Unisys Finance Corporation), Burroughs Corporation (Vice President, Treasurer), The Bendix Corporation (Executive Director and Assistant Corporate Controller) and Deloitte, Haskins & Sells (now Deloitte & Touche). Mr. Level is also currently a director of UTi Worldwide Inc. Stephen C. Neal, a director since 2007, became Chairman of the Board in September 2011. Mr. Neal is currently the chairman of the law firm Cooley LLP.
He was also chief executive officer of the firm until January 1, 2008. In addition to his extensive experience as a trial lawyer on a broad range of corporate issues, Mr. Neal has represented and advised numerous boards of directors, special committees of boards and individual directors on corporate governance and other legal matters. Prior to joining Cooley LLP in 1995 and becoming CEO in 2001, Mr. Neal was a partner of the law firm Kirkland & Ellis. Patricia Salas Pineda, a director since 1991, is currently Group Vice President, National Philanthropy and the Toyota USA Foundation for Toyota Motor North America, Inc. an affiliate of one of the world’s largest automotive firms. Ms. Pineda joined Toyota Motor North America, Inc. in September 2004 as Group Vice President of Corporate Communications and General Counsel. Prior to that, Ms. Pineda was Vice President of Legal, Human Resources and Government Relations and Corporate Secretary of New United Motor Manufacturing, Inc. with which she was associated since 1984. She is currently a director of the Congressional Hipic Caucus Institute and a mem ber of the board of advisors of Catalyst. 3. 2 Top Management in Turkey
Hakan Atalay is the general manager of Levi’s Turkey since 2008. He graduated from Textile Engineering Department from Istanbul Technical University and he also has a graduate degree from the Management Department of Marmara University. He has a 16 years of experience in retail, sales and product management in local and multinational companies like Mexx Turkey, Network and Unitim. Lately he was the country sales director of Nike Turkey. He is now responsible for the management of Levi’s and Dockers brand operations and for the development of strategic vision of those brands in Turkey.
Kayhan Ongun is the sales director of Levi’s Turkey since 2010. He graduated from Management Engineering Department from Istanbul Technical University and he has a Management of Business Administration degree from Rowan University. He worked at various sales positions in Michelin and Nike Turkey. Lately he was Football Sales Manager in Nike Turkey. Korhan Oz is the finance manager of Levi’s Turkey. Korhan Oz is a graduate of Istanbul University Department of Economics. He has in particular substantial experience in finance.
He worked as Country Financial Controller at Ernst Audit, Intergen and Nokia and then worked as Executive Vice President for Financial Affairs at Krea Group. Orhan Ors is the Information Technology Director of Levi’s Turkey. He has been working for Levi’s for 22 years. Ozan Duman is the Human Resources Director of Levi’s Turkey since 2011. Lately, he was HR Manager of Kimberly Clark Turkey. Ipek Bekiroglu is the Marketing Manager of Levi’s Turkey since 2006. Lately, she was working as a Brand Manager in Carslberg Turkey. 4. EXTERNAL ENVIRONMENT ANALYSIS: OPPORTUNITIES AND THREATS 4. SOCIETAL ENVIRONMENT Socio-cultural Turkey has the youngest population in Europe with 31M under 25 and the population growth rate is 1. 35%. Life style changes heavily affect trends in casual apparel design and market. Being thin and skinny creates a trend in the market where skinny and tight jeans dominate the market. Economic There is a shortage in cotton supply in the world combined with high cotton prices due to several important factors: First, global stocks of cotton were drawn down sharply as less cotton was grown and shipped through the global supply chain due to competition from other crops.
Second, climate changes and bad weather undermined global cotton production. Thirdly, government actions further aggravated the situation where India, one of the world’s largest cotton producers, slapped export quotas on raw cotton. And finally, demand for textiles and apparel rose. Retail landscape is evolving with the opening of many new malls and locations. In addition street store rents are increasing, so brands are investing on shopping malls in primary and secondary cities. In line with this development, traditional outlet stores on the highway breakpoints have been converted to outlet malls.
Extended seasonal sale months, attractive promotions are offered throughout the year. There is high investment cost on one hand; as the average shop size is growing, rents are getting higher. On the other hand however, shopping malls have made significant discounts in their rents or currency rates have been fixed due to global crisis. Technological E-commerce is getting more popular with private shopping concept. (Trend-Yol, Markafoni and Limango are the main players in Turkish Market. ) Social media has a narrow effect right now but it is increasingly becoming a part of ompanies’ marketing strategies. Political legal There is continuous financial instability in Turkey that strongly affects the spending power of Turkish people. Income difference between regions is dramatic in Turkey which affects the spending power. However, lower income classes’ and regions’ spending is increasing. Environmental standards and regulations against hazardous jeans production are increasingly applied by many countries and companies (The blue dust that stems while sanding jeans is a heavy irritant to the lungs).
In the European Union, the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations enacted 1 June 2007 require clothing manufacturers and importers to identify and quantify the chemicals used in their products. These regulations may even require manufacturers to inform consumers about potentially hazardous chemicals that may be present in their products. Actual end products are governed by stipulations of the European Equipment and Product Safety Act, which regulates the use of heavy metals, carcinogenic dyes, and other toxics used in textile manufacture.
Additional consumer protection is offered by the European Union’s Oko-Tex Standard 100, a testing and certification program established in 1992. The standard gives the textile and clothing industry uniform guidance for the potential harm of substances in raw materials as well as finished products, and every stage in between—these include regulated substances as well as substances that are believed to be harmful to health but are not yet regulated (such as pesticides). The standard also governs elements such as colorfastness and pH value.
Along with these standards, Levi Strauss and Co. Turkey does not produce jeans with sanding. 4. 2TASK ENVIRONMENT Rivalry among existing firms There is a heavy weight of local players in Turkish casual apparel market. Local retailers like Mavi, LC Waikiki, Colin’s, LTB (Little Big) have their own denim production facilities so that they can sell with reasonable prices. This fact that the competitors have low entry prices makes “price” the main differentiator. International and local brands are investing in key cities and key locations. (Zara, Mango, Adidas, Nike, Mavi, Colin’s).
In addition, local competition is investing on O stores which are bigger than 200 sqm. Mavi was acquired by Turkven (private equity fund) with 35% share in 2008. The company has aggressive revenue targets and invests heavily in ATL communication. The company is focusing on head to toe look and as a result of this approach, their women and tops share increased. Colin’s is re-vamping the brand identity launched a new logo. The company focuses on O (owner and operator) model. In accordance with this approach, they re-fit O stores in major shopping malls.
Lee is losing ground, they have no presence in stand alone stores, and they focus on department stores. LTB is re-fitting their O stores in premium shopping malls. Diesel has not been aggressive in communication for a long period. Jack & Jones is entering department stores. Grey market is an important factor that has a huge impact in the competition. The high number of grey market producers impacts the competition between the existing firms as especially the local denim producers try to differentiate themselves by price.
Threat of new entrance New brands entered the market (H- 5 stores in 5 months) whereas local brands have elevated their retail environment to attract the young consumer. A will be opening their first store in Turkey in 2012. EFAS TABLE External FactorsWeightRatingWeighted ScoreComment SROpportunities O1Turkey’s young population 0. 103. 00. 3 O2E-commerce and social media; new distribution channel0. 053. 00. 15 O3Malls; increasing number of shopping malls0. 105. 00. 5 O4Seasonal sale months extension, attractive promotions0. 04. 00. 4 O5Life style changes; new products0. 104. 00. 4 O6Environmental standards and regulations0. 052. 00. 1 Threats T1Financial instability0. 105. 00. 5 T2Grey market0. 103. 00. 3 T3High operational costs (O)0. 104. 00. 4 T4Marketing investments of the local brands0. 054. 00. 2 T5Increasing number of new competitors0. 053. 00. 15 T6Low cotton supply and high cotton prices0. 105. 00. 5 Total1. 003. 9 5. INTERNAL ENVIRONMENT ANALYSIS: STRENGTHS AND WEAKNESSES 5. 1CORPORATE STRUCTURE
The worldwide leadership team, which includes the CEO and ten executives, sets the company’s overall direction and is responsible for all major strategic, financial and operational decisions. Many of the senior-most leaders have risen through the company ranks over the past two or three decades. But to maintain the lead in the fast-changing fashion industry Levi’s leadership team also includes executives who bring leading-edge expertise and new ideas from other consumer companies and other industries. Levi Strauss Co. as a corporation has operations divided under three main regions: Asia Pacific, Europe and America.
The company has headquarters in Singapore, Brussels and San Francisco. Every region is under the management of a Vice President. Country General Managers are directly reporting to their respective Regional Vice Presidents. In Turkey, human resources, information technology and finance departments are directly reporting to their respective region and they are indirectly reporting to Turkish General Manager. However, sales and marketing departments are directly reporting to Turkish General Manager and they are indirectly reporting to their respective region.
Retail Operations and Sales Manager and Wholesale Sales Manager are directly reporting to Sales Director. Retail Operations and Sales Manager manages four District Managers and Wholesale Sales Manager manages three Account Managers in Turkey. 5. 2CORPORATE CULTURE Levi Strauss & Company as a multinational company embodies its vision that has four main values at the core: empathy – walking in other’s shoes; originality – being authentic and innovative; integrity – doing the right thing; and courage – standing up for what they believe.
In addition to guiding the strategic decisions and actions, the company’s values also guide its social responsibility in various ways – through the grants provided by the Levi Strauss Foundation, through the support provided to communities in which it has a business presence, through its employee community-involvement program, and through its ethical code of conduct for its business partners. The company’s strategic move to outsourcing has presented its own challenges because of Levi Strauss’ strong commitment to socially responsible business practices.
In 1991, Levi Strauss became the first multinational company to establish a comprehensive ethical code of conduct for its alliance partners in manufacturing and finishing. This code, titled the Global Sourcing and Operating Guidelines, establishes business practices such as fair employment, worker health and safety, and environmental standards. The company remains committed to ensuring compliance with its “Code of Conduct” at all facilities and works onsite with its contractors to develop responsible business practices and continuous improvement.
Trained inspectors closely audit and monitor the contractors and if it is determined that a business partner is not complying with the terms, Levi Strauss requires that the partner implements a corrective action plan within a specified time period. If a contractor fails to take corrective actions, the business relationship is terminated. By nature, the company is externally focused and determined to stay that way. This means constantly scanning developments that affect the business, and acting on that information to surprise their customers.
The above are part of Levi Strauss’ global corporate citizenship culture. To make these to also diffuse to Turkish Levis’ employees working environment, the top management team is making radical moves. 5. 3CORPORATE RESOURCES STRENGTHS Levi Strauss and Co. is a member of Better Cotton Initiative. Better Cotton is a different way to grow cotton that decreases the negative environmental impacts and has the potential to improve the livelihood of the 300 million people involved in cotton farming worldwide.
At its heart, the Better Cotton Initiative aims to make all cotton grown around the world more sustainable by reducing water and chemical use (including pesticides and fertilizers), protecting the health of the soil and promoting important labor standards including bans on child labor. The Better Cotton Initiative also focuses on training and empowering farmers to improve their long term financial profitability. This is a conscious effort made by all partners of the Better Cotton Initiative to help prevent prices for Better Cotton from rising dramatically in the short term.
This is an advantage on behalf of Levi? s Turkey as the competitors in Turkish market are not involved in this initiative. Levi’s always had been described as a fashion innovator, as the company created the jeans market. The company continues to recognize the importance of the right products to its future success. One of Levi Strauss’s critical strategic goals is to “innovate and lead from the core,” and it continues to introduce product innovations. For instance, since 2001, the Advanced Innovation Team for the Dockers line has introduced several groundbreaking product innovations.
For instance, in 2004 and 2005, the team developed three new and exclusive product innovations. The first was the Never-Iron Cotton that dramatically minimizes wrinkling. Another was the Thermal Adapt Khaki pants that adjust to body temperature. And the third was Dockers Shirts with Perspiration Guard, a special finish that wicks away moisture from the body and eliminates the appearance of perspiration marks. This is a strength that differentiates Levi? s from its competitors. In addition to this, the company recently decided to make a tradeoff and it stopped producing for women under Dockers brand.
This is another wise strategic move on behalf of the company. And furthermore- in line with the above tradeoff- Levi’s was one of the first companies to tap into the mass customization trend by offering made-to-order jeans. In 1999, the company announced that it would begin offering customized versions of its classic denims to fit every woman’s body type, but this move was not successful at that time. In 2011, the company re-launched the same project under the name of “Curve ID” for women and now it proved to be a great success to regenerate growth on women? s product line.
This is another important advantage that makes the brand stronger than the other brands. Youth panel- as a method of consumer-driven brand innovation- is a qualitative consumer panel focused on the consumer typologies that the company believes exercise greatest influence on the dynamics of change within the casual apparel market. The panel has been built up in most fashion significant European cities and comprises between 50 and 100 of the most fashion-forward youth. It is convened twice a year to fit into the line development calendar. This tool is strength for Levi? as it provides the best indication the business has of how much momentum a particular trend has in it, and so serves to guide both general businesses forecasting as well as specific product life cycle management. Every second quarter the brand and design teams dedicate a day to working with the insights coming out of the panel. It helps set the strategic agenda and also enables some very effective and immediate trouble-shooting. WEAKNESSES One of the company’s most valuable assets is its Levi’s brand. However, that venerable Levi’s brand had lost much of its popularity.
Although Levi Strauss has one of the best-known names in the world, its market power has declined. An annual ranking of global brands with the most impact showed Levi’s ranked at number 32 in 2001, number 34 in 2002, and number 56 in 2003, and rebounding to number 44 in 2004. The products that baby boomers in the 1960s defined as hip and anti-establishment were now perceived as non-trendy and dull. In the brutally competitive apparel market, that type of image, particularly with younger consumers, has proven to be a disadvantage. As a way to p the consumer market, the company launched several new brands in USA and several other countries.
But the same product strategy is not applied in Turkey and the product range is not diversified to cover all customer segments as far as price competition is considered. The company chose to stick with low-tech, in-store posters and other promotions; rather than mass media coverage – television and print ads which the biggest competitors in Turkey extensively use. The company doesn’t invest on brand image and use localized advertisement. But the competitors are using constant brand communications strategy including celebrities, outdoor events. IFAS TABLE Internal FactorsWeightRatingWeighted ScoreComment
SRStrengths S1High brand awareness 0. 155. 00. 75 S2Member of Better Cotton Initiative0. 053. 00. 15 S3Advance innovation competence0. 154. 00. 60 S4Profit growth0. 103. 00. 30 S5Product category fragmentation (Curve id-women; Dockers- men)0. 104. 00. 40 Weaknesses W1Inflexible pricing strategy 0. 155. 00. 75 W2Misuse of marketing communications budget0. 154. 00. 60 W3Brand image deterioration 0. 155. 00. 75 Total1. 004. 30 6. ANALYSIS of STRATEGIC FACTORS A. SITUATIONAL ANALYSIS SWOT- SFAS TABLE SRInternal FactorsWeightRatingWeighted ScoreComment S1High brand awareness (global reach and scale)0. 05. 00. 50 S3Advance innovation competence0. 105. 00. 50 S5Product category fragmentation (Curve id-women; Dockers- men)0. 053. 00. 15 S6Financial strength0. 054. 00. 20 W1Inflexible pricing strategy 0. 054. 00. 20 W2Misuse of marketing communications budget0. 053. 00. 15 W3Brand image deterioration 0. 105. 00. 50 O1Turkey’s young population 0. 055. 00. 25 O3Malls; increasing number of shopping malls0. 104. 00. 40 O4Seasonal sale months extension, attractive promotions0. 054. 00. 20 O5Life style changes; new products0. 053. 00. 15 T2Financial instability0. 055. 00. 25 T3Grey market0. 053. 00. 5 T4High operational costs (O)0. 104. 00. 40 T5Marketing investments of the local brands0. 054. 00. 20 T6Increasing number of new competitors0. 053. 00. 15 Total1. 03. 70 7. STRATEGIC ALTERNATIVES and RECOMMENDED STRATEGY 7. 1 Review of Mission and Objective 7. 2 Strategic Alternatives and Recommended Strategy TOWS MATRIX Internal FactorsStrengths S1. High brand awareness (global reach and scale) S2. Member of Better Cotton Initiative S3. Advance innovation competence S4. Profit growth S6. Financial strengthWeaknesses W1. Inflexible pricing strategy W2. Misuse of marketing communications budget
W3. Brand image deterioration External Factors Opportunities O2. E-commerce and social media; new distribution channel O3. Malls; increasing number of shopping malls O4. Seasonal sale months extension, attractive promotions O5. Life style changes; new products1. Levis can continue to growth with new openings in different malls 2. Through high brand awareness, easy to take place in social media and cooperate with e-commerce websites as new distribution channels 3. Levis can adapt its products for different preferences1. New online campaigns to improve the brand image
Threats T2. Grey market T5. Increasing number of new competitors T6. Low cotton supply and high cotton prices1. Developing new production technologies in order to use the raw materials effectively 2. Support social responsibility initiatives worldwide 1. Assessment of local competitors in order to redesign the marketing campaigns Recommended Strategy Functional strategy, marketing strategy; positioning should be made according to the target audience. Through social media and online campaigns Levis can improve its brand image and can reach Turkey’s young population.
After several researches, it has been found out that the potential age group for both men and women is 14-25 in Turkish casual apparel market. However, it must also be taken into consideration that it is the 18-35 age group that consumes more and that women are the ones who increase the overall sales in general. The private shopping companies are growing very fast in Turkey. Levis can use e-commerce websites as new distribution channels to improve the brand penetration among 24-35 years old, worker segment. Levis is using its global marketing communications campaigns in Turkey, as they are.
The company does not try to assess its competitor’s strategies or to adapt the tone of the messages according to local needs and preferences. However the local competitors are really aggressive in communication. Levis has to redesign its communication campaigns and reallocate its marketing budget. 8. CONCLUSION BIBLIOGRAPHY 1)http://www. levistrauss. com/ 2)Company’s 2012 plan 3)Company’s distribution strategy 4)Inspiring the organization to act: a business in denial, International Journal of Market Research Vol. 44 Quarter 2, 2002, the Market Research Society 5)Denim Pazar? nda Marka Konumland? rmalar? n? n Karsilastirilmasi,

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Swot Analysis

Swot Analysis on Whole Foods Market

The company offers a broad and fractionated product selection with a strong emphasis on perishable foods designed to appeal to both natural and organic food and gourmet shoppers. An extensive product offering allows the company to address multiple customer segments. However, intense competition could negatively impact the company through loss of sales, reduction in margin from competitive price changes, and greater operating costs such as marketing expenditure.
Strengths Broad product offerings Focused growth strategy Strong focus on right sizing of stores Opportunities Increasing demand for organic products Increasing popularity of private labels Trends support increased demand for food products Weaknesses Product recalls Weak international presence Increasing rental expenses Threats Intense competition Stringent regulations Strengths Broad product offerings Whole Foods Market offers a broad and differentiated product selection with a strong emphasis on perishable foods designed to appeal to both natural and organic food and gourmet shoppers.
Its product selection in all of its stores includes produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, specialty (beer, wine and cheese), coffee and tea, nutritional placement, vitamins, body care, educational products such as books, floral items, pet products and household products. In its stores, it stocks a large selection of organic food and non-food products. These stores also feature catering departments, where customers can purchase made-to-order foods. Moreover, the company’s emphasis on fresh food provides it with a competitive edge over its peers offering only packaged foods.

An extensive product offering allows the company to address multiple customer segments, apart from insulating it from any significant fall in demand for any specific product or segment and also enables it to retain its customer base besides attracting new customers to its stores. Focused growth strategy Whole Foods Market focuses on expansion, primarily through new store openings in existing trade areas as well as new areas, including international locations. During PAYOFF and PAYOFF, the company opened 25 and 18 new stores, respectively.
During the 16 weeks ended January 20, 2013, the company opened 10 new stores. Besides, the company is also expanding in the UK. The company opened a 22,000 square feet store in Coiffing, Glasgow in November 2011, and plans to open a 20,000 square feet store in Richmond, London in 2013. Further, the company estimates to open 32-34 stores in PAYOFF and 33-38 stores in PAYOFF. The company’s strategy to grow through identical store sales growth, acquisitions and new store openings has enabled it to grow at a compounded annual growth rate (CARR) of 26% during 1991-12.
Since the natural foods retailing industry is highly fragmented and comprises many small local and regional chains, growth through store expansion provides the company access to desirable markets, apart from enabling it to expand its reach to a wide customer base and diversify its revenue streams. Strong focus on right sizing of stores Whole Foods Market is focused on the right sized store for each location. During recession, the company downsized 20 leases by an average of 13,000 square feet each. The company reduced approximately 1. Million square feet from its development pipeline, downsizing 20 leases for stores in development and terminating an additional 22 leases. Also in 2012, the company reduced the average size of its pipeline stores to 37,000 square feet from 39,000 square feet in 2010. While Whole Foods Market’s larger-format stores have a strong presence in dense urban areas, the company’s smaller stores have the potential to generate great returns as well. The company’s decision to scale back the average size of its new stores is an important factor behind improving the company’s chain-wide productivity and enhancing its return metrics.
Weaknesses Product recalls Whole Foods Market has recalled several products owing to contamination. For instance, in January 2013, Whole Foods Market recalled one lot code of Whole Catch Wild Alaskan Sockeye Salmon, cold smoked and sliced, due to a possible contamination with Listener Monocotyledon. The product was sold in stores in 12 states. In October 2012, Whole Foods Market recalled two prepare items, Chicken Spring Rolls and Peanut Sesame Noodles, due to possible Salmonella contamination in the peanuts used as an ingredient. In the same month, Whole Foods Market recalled soup sold in all stores in six states due to mislabel.
The Whole Foods Market Kitchens soup, labeled as Roasted Garlic and Eggplant Soup, was in fact Lobster Bisque, which poses the risk of allergic reaction if consumed by customers with a shellfish or milk allergy. Previously, in January 2012, the company recalled certain Whole Foods Market Dairy Free bakery products because they Market of Austin, Texas recalled seven types of cheddar cheese over the possible risk of E. Coli or listener contamination. Such recurrent product recalls affect the brand image of the company, which, in turn, leads to low customer loyalty and brand equity.
Page 5 Weak international presence The company has weak international presence with Just seven stores in Canada and six stores in the I-J. Canada and the I-J accounted for only 3. 2% of the total revenues in PAYOFF. Though the company intends to open new stores in the UK and Canada, its operations in these markets are not large enough to rive economies of scale in purchasing and distribution, resulting in relatively high product prices. The higher prices erode the competitiveness of the company relative to its established international rivals, who have larger scale of operations and, therefore, leaner economics.
In a competitive environment, high dependence on few markets not only exposes Whole Foods Market to the vulnerability of local market conditions but also limits the growth opportunities. Besides, the company is deprived of the economies of scale and benefits which its competitors realize because of their global operations. Increasing rental expenses Whole Foods Market has obligations under certain capital leases for rental of equipment and certain operating leases for rental of facilities and equipment. Therefore, the change in rental expenses charged under operating leases affects the company’s business.
In the recent years, the company’s rental expenses have increased significantly. Rental expense charged to operations under operating leases for PAYOFF, PAYOFF and PAYOFF totaled approximately $353. 4 million, $321. 6 million and $303. 5 million, respectively. Increasing rental expenses affect the company’s profitability and consequently have a eternal adverse impact on margins. Opportunities Increasing demand for organic products The demand for natural and organic foods has increased over the years due to rising awareness about the importance of natural foods in the diets.
According to industry estimates, the US organic industry grew 9. 5% in 2011, registering sales of $31. 5 billion. Organic food and beverage sales surpassed $29 billion in 2011 and accounted for nearly 4. 2% of the total food sales in the US. The organic food and beverages market in North America is expected to register strong growth rates in the coming years. Whole Foods Market offers natural and organic foods for special dietary needs in the US. The company is well positioned to benefit from the expanding organic foods market and improve its market share.
This would enhance the company’s revenue base in a lucrative and stable growth the US is expected to grow at a fast pace. The economic slowdown is one of the reasons that kept price the top concern for consumers. Instead of expensive brands, consumers across the industry are turning to generic and private label products. Even upper-income shoppers are more willing to buy generic, which has traditionally appealed more to shoppers with Page 6 limited budgets. In a study conducted by an industry source in 2011, about 80% of consumers surveyed indicated that they consider store brands to be equal to or better than national brands.
The annual sales of private label products are estimated to have increased by 40% in supermarkets during 2000-10. Furthermore, in 2011, overall sales of store brands increased 5% in supermarkets. Moreover, industry surveys estimate that currently around 25% of products purchased in the US are store brand products. This trend is expected to continue even after the economy recovers. Whole Foods Market’s store brands feature approximately 2,700 SKU led by its primary brand, 365 Everyday Value. Additionally, Whole Foods Market has a number of store-made and regionally-made fresh items sold under the Whole Foods Market label.
It also offers specialty and organic coffee, tea and drinking chocolates through its subsidiary Allegro Coffee Company. In addition, the company has developed a grouping of ‘exclusive’ and ‘control brand’ products to complement its family of brands. Increasing popularity of private label products among consumers and the company’s emphasis on enhancing its value offerings is expected to have a favorable impact on the company’s sales and profit margins. Trends support increased demand for food products Eating at home and eating healthy are important trends that are likely to increase the demand for grocery.
The economic downturn and the perception that home-prepared foods are much healthier, a view held by more than 90% of grocery shoppers according to an industry study, and an unmet desire to enjoy affordable, restaurant-style foods at home have given food marketers the opportunity to recapture mealtime. According to a recent survey, 86% of the budget-conscious women in the US prepared their meals at home in 2010. Approximately 71% purchased convenience produce (prepared salads, chopped fruits and vegetables, etc. And approximately 81% purchased convenient forms of fresh poultry and meat regularly. A recent study by an industry source in 2012 indicated that women dined out less frequently. Home cooks are purchasing fresh and organic food items for cooking at home, and are avoiding processed foods. Industry reports suggest that the perishable department has been registering steady growth despite the weak economic condition. This growth is driven by the consumer perception of healthy food, increasing working population with lesser time to cook arrest, the spending in which is not entirely discretionary.
The positive trends in the market will lead to increased sales in the segment which will also drive footfall. Threats Intense competition Food retailing is a large, intensely competitive industry. Whole Foods Market competes with local, regional, national and international conventional and specialty supermarkets, natural foods stores, warehouse membership clubs, smaller specialty stores, farmers’ markets, and restaurants. Each of page 7 these competes with the company on the basis of product selection, quality, customer service, price or a combination of these factors.
Most supermarkets offer at least a limited selection of these products, while some have chosen to expand their selection more aggressively. As competition in certain areas intensifies, the company’s results of operations may be negatively impacted through loss of sales, reduction in margin from competitive price changes, and greater operating costs such as marketing expenditure. Stringent regulations As the company operates in the natural and organic foods market, its stores and products are subject to several laws ND regulations relating to health, sanitation and food labeling.
The company is also required to comply with provisions regulating licensing for beer and wine or other alcoholic beverages in many stores. Several federal agencies and departments, including the Food and Drug Administration (FDA), the Federal Trade Commission (FTC), the Consumer Product Safety Commission (COPS), the United States Department of Agriculture (USDA) and the Environmental Protection Agency (EPA) set critical standards for the manufacturing, processing, formulation, packaging, labeling and advertising of products.
Failure to comply with these standards could result in penalties and seizure of marketing and sales licenses. These regulations also result in additional compliance costs, which could reflect in reduced margins. Page 8 Copyright of Whole Foods Market, Inc. SOOT Analysis is the property of Marketing, a Denominator business and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.