J.Crew Group SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by J.Crew Group managers to do a situational analysis of the firm . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) J.Crew Group is facing in its current business environment.

The J.Crew Group is one of the leading organizatations in its industry. J.Crew Group maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis a highly 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 helps the managers of the J.Crew 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 central purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect J.Crew Group strengths, and eradicate its weaknesses.

Step by Step Guide to J.Crew Group SWOT Analysis

Strengths of J.Crew Group – Internal Strategic Factors

As one of the leading companies in its industry, J.Crew 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 J.Crew Group are –

Highly skilled workforce through successful training and learning programs. J.Crew Group is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
Automation of activities brought consistency of quality to J.Crew Group products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Successful track record of developing new products – product innovation.
Good Returns on Capital Expenditure – J.Crew Group is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Strong Brand Portfolio – Over the years J.Crew Group has invested in building a strong brand portfolio. The SWOT analysis of J.Crew Group just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
Strong Free Cash Flow – J.Crew Group has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Highly successful at Go To Market strategies for its products.

Weakness of J.Crew Group – Internal Strategic Factors

Weakness are the areas where J.Crew 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.

Not highly successful at integrating firms with different work culture. As mentioned earlier even though J.Crew Group is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
High attrition rate in work force – compare to other organizations in the industry J.Crew Group has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, J.Crew 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.
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 J.Crew Group
There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

Opportunities for J.Crew Group – External Strategic Factors

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 J.Crew Group in other product categories.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of J.Crew Group.
New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for J.Crew Group. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided J.Crew Group an opportunity to enter a new emerging market.
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 J.Crew Group to drive home its advantage in new technology and gain market share in the new product category.
The market development will lead to dilution of competitor’s advantage and enable J.Crew Group to increase its competitiveness compare to the other competitors.
The new technology provides an opportunity to J.Crew Group to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as J.Crew Group to increase its profitability.

Threats J.Crew Group Facing - External Strategic Factors

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
Imitation of the counterfeit and low quality product is also a threat to J.Crew Group’s product especially in the emerging markets and low income markets.
Rising raw material can pose a threat to the J.Crew Group profitability.
Liability laws in different countries are different and J.Crew Group may be exposed to various liability claims given change in policies in those markets.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of J.Crew Group

Limitations of SWOT Analysis for J.Crew 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 J.Crew 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 J.Crew 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 J.Crew 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 J.Crew 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.

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Example of Weighted SWOT Analysis

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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)