Order custom Harvard Business Case Study Analysis & Solution. Starting just $19
Ascena Retail Group SWOT Analysis / Matrix
Essays, Term Papers & Research Papers
SWOT analysis is a strategic planning tool that can be used by Ascena Retail Group managers to do a situational analysis of the organization . It is an important technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Ascena Retail Group is facing in its current business environment.
The Ascena Retail Group is one of the leading firms in its industry. Ascena Retail Group maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.
The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Ascena Retail Group to develop four types of strategies:
- SO (strengths-opportunities) Strategies
- WO (weaknesses-opportunities) Strategies
- ST (strengths-threats) Strategies
- WT (weaknesses-threats) Strategies
SWOT Matrix Strategies Objective
The primary purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Ascena Retail Group strengths, and eradicate its weaknesses.
Step by Step Guide to Ascena Retail Group SWOT Analysis
Strengths of Ascena Retail Group – Internal Strategic Factors
As one of the leading companies in its industry, Ascena Retail Group has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Ascena Retail Group are –
- Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
- Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
- Strong Free Cash Flow – Ascena Retail Group has strong free cash flows that provide resources in the hand of the company to expand into new projects.
- Strong distribution network – Over the years Ascena Retail Group has built a reliable distribution network that can reach majority of its potential market.
- Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
- Successful track record of developing new products – product innovation.
- Superb Performance in New Markets – Ascena Retail Group has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
- Highly successful at Go To Market strategies for its products.
Weakness of Ascena Retail Group – Internal Strategic Factors
Weakness are the areas where Ascena Retail Group can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.
- Limited success outside core business – Even though Ascena Retail Group is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Ascena Retail Group needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
- Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Ascena Retail Group is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
- Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Ascena Retail Group
- The profitability ratio and Net Contribution % of Ascena Retail Group are below the industry average.
- High attrition rate in work force – compare to other organizations in the industry Ascena Retail Group has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
- Not highly successful at integrating firms with different work culture. As mentioned earlier even though Ascena Retail Group is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Opportunities for Ascena Retail Group – External Strategic Factors
- Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Ascena Retail Group.
- Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Ascena Retail Group’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
- Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
- New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Ascena Retail Group to drive home its advantage in new technology and gain market share in the new product category.
- Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Ascena Retail Group in other product categories.
- Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Ascena Retail Group an opportunity to enter a new emerging market.
- New trends in the consumer behavior can open up new market for the Ascena Retail Group . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
- Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Ascena Retail Group to capture new customers and increase its market share.
Threats Ascena Retail Group Facing - External Strategic Factors
- Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Ascena Retail Group
- Imitation of the counterfeit and low quality product is also a threat to Ascena Retail Group’s product especially in the emerging markets and low income markets.
- Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
- Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
- No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
- Liability laws in different countries are different and Ascena Retail Group may be exposed to various liability claims given change in policies in those markets.
- New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
- Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Limitations of SWOT Analysis for Ascena Retail Group
Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.
- Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
- SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
- The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Ascena Retail Group
- SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
- SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.
Weighted SWOT Analysis of Ascena Retail Group
In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.
This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Ascena Retail Group managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.
Limitation of Weighted SWOT analysis of Ascena Retail Group
This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.
Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Ascena Retail Group
Example of Weighted SWOT Analysis
You can email us to get an example document of Weighted SWOT analysis.
SWOT Worksheet & Template
If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.
References / Citations & Bibliography
- M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
- A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
- O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
- L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
- R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)
Previous 5 SWOT Analysis
- Pioneer Natural Resources SWOT Analysis
- YRC Worldwide SWOT Analysis
- Northern Trust SWOT Analysis
- Juniper Networks SWOT Analysis
- Berry Plastics Group SWOT Analysis