Caleres, Inc. SWOT Analysis / Matrix

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

The Caleres, Inc. is one of the leading firms in its industry. Caleres, Inc. maintains its prominent position in market by critically 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.

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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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Caleres, Inc. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Caleres, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect Caleres, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Caleres, Inc. SWOT Analysis

Strengths of Caleres, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, Caleres, Inc. has numerous strengths that help 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 Caleres, Inc. are –

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  • 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.
  • Superb Performance in New Markets – Caleres, Inc. 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.
  • Successful track record of developing new products – product innovation.
  • 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.
  • Automation of activities brought consistency of quality to Caleres, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Caleres, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Caleres, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Strong distribution network – Over the years Caleres, Inc. has built a reliable distribution network that can reach majority of its potential market.
  • 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.

Weakness of Caleres, Inc. – Internal Strategic Factors

Weakness are the areas where Caleres, Inc. 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.

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  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Caleres, Inc. 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.
  • High attrition rate in work force – compare to other organizations in the industry Caleres, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • 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.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Caleres, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • 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 Caleres, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • The profitability ratio and Net Contribution % of Caleres, Inc. are below the industry average.

Opportunities for Caleres, Inc. – External Strategic Factors

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  • 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 Caleres, Inc. in other product categories.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Caleres, Inc. to increase its profitability.
  • New trends in the consumer behavior can open up new market for the Caleres, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Caleres, Inc..
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Caleres, Inc.’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.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Caleres, Inc. an opportunity to enter a new emerging market.
  • 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 Caleres, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Government green drive also opens an opportunity for procurement of Caleres, Inc. products by the state as well as federal government contractors.

Threats Caleres, Inc. Facing - External Strategic Factors

  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Rising raw material can pose a threat to the Caleres, Inc. profitability.
  • Imitation of the counterfeit and low quality product is also a threat to Caleres, Inc.’s product especially in the emerging markets and low income markets.
  • 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.
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • 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.

Limitations of SWOT Analysis for Caleres, Inc.

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 Caleres, Inc.
  • 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.

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Weighted SWOT Analysis of Caleres, Inc.

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 Caleres, Inc. 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 Caleres, Inc.

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)