BUS 475 Week 3 Individual Assignment: Strategic Plan, Part 2: SWOTT Analysis

What To Wear Today?

Strategic Plan, Part II: SWOTT Analysis

•           Substitution of service, new competition could form quickly

•           Price gouging from competitors

•           Negative image from substitute products

•           The virtual environment makes customer relations less personal

•           Electronic communications can create gaps and miscommunications

•           Startup advertising is difficult for new internet sites

•           Pressure for quality product is imperative

•           A new market with many diverse clients

•           There is the potential to expand profits through affiliate marketing

•           A large customer base with regard to current generation

•           Low overhead costs

•             Extreme control of service, What to Wear Today can control workflow and efficiency to a greater degree than a brick and mortar retailers

•           Control of the work process, not             having physical customers precludes             interruptions and work distractions

•           Work processes and work flow is             highly controlled

 

Trends

·      Advances in digital infrastructure have made internet retailing possible and practical

·      Software allows for publishing professional documents and web content

·      The Millennia generation (Y) is the largest growing market and they are wired into the web 24/7

The What To Wear Today SWOTT analysis shows various negative and positive forces as well as trend directions.  These forces and trends reveal a methodology for management to follow in order to enterprise or avoid these factors. This SWOTT analysis will give a fundamental strategy and risk assessment for strategic planning.

Strengths

The largest strengths that What To Wear Today presents is the inexpensive overhead. Working across the internet in a virtual store environment gives What To Wear Today the benefit of not maintaining the cost of a buildings and other physical overheads.  These costs would include items such as fire insurance, theft insurance, or general liability insurance.  As well, because there is no need for employees there is the lack of needing to carry workman’s compensation insurance or benefit plans.

The digital world of What to Wear Today also allows for control of services to greater degree than in traditional retail storefronts. This control is exhibited through the control of business processes and work flow determination.  Essentially, the company can control its processes to greater degree because it is not at the mercy of retail customer demands and it can determine its own scheduling rather than being forced by the demands of customers.  This gives the company greater flexibility and control.  The digital store also allows What To Wear Today the ability to be particular about its clients. Clients that seem overly demanding or costly in service do not have to remain clients. While choosing to not service certain clientele is not a business practice to be considered anything but rare, it is however an option.

The virtual environment also allows the company to concentrate its efforts into its core competencies. While other traditional retail outlets spend much of their time toiling with activities that are nonbusiness related, the virtual environment removes this problem. For example, normal retail stores still must contend with time consuming tasks such as janitorial services or buying supplies such as paper for copiers.  Due to this factor, concentration can remain focused on the needs of the client and time is not allocated to other activities unnecessarily.  This means better customer service and increased service quality.

The lack of personal interaction with customers removes the problem of distractions within the workplace. While customers are important they can also be time consuming with regard to helping them make choices. This can be a burden on a company since there is no guarantee that the customer will purchase the product. The digital store removes this constant distraction and allows customers to learn the services offered through the website.

These many strengths of this business are created from technological advancements in communications. The internet is the driving strength for the business.  However, new trends in software and information technology have also been a driving force in business empowerment.  For example, new software applications provide What To Wear Today the means to maintain efficient, inexpensive, and professional processes. Desktop publishing software allows the company to create personalized style guides which look professional and can have interactive features such as links to other websites or to affiliate marketing programs.

What To Wear Today also has the ability to sell globally. Clients can join the site and use the services anywhere in the world. This gives the company competitive advantage in the fashion industry because it allows the clients to have a virtual stylist on hand from anywhere.

Weaknesses

In contrast to these strengths, there are several areas of weakness for the company. The largest of these weaknesses is the fact that the virtual business environment separates the client from the stylist. Because of this factor it is easy to lose touch with clients, therefore losing the personal approach. This could be used by competitors to gain competitive advantage by creating using this problem as a negative strike against the company.   This same virtual environment could also present problems in communication. When communicating electronically, tone and context of meaning can often be issues. Clients could have the problem of misunderstanding messages. A negative communication could create a negative selling environment that makes for bad relations with clients. The need for a positive selling environment is essential to online business. This factor is a driving force for What To Wear Today as clients must trust the company. This positive selling environment is vital to the business operations and continued ability to grow the customer base. This factor makes the necessity for quality service a priority in maintaining marketability.

A final weakness for What to Wear Today is the fact that it will be extremely difficult to build business from the startup. This is a problem because the company will not be in the top of the search engines and will need to campaign through other online media sources in order to drive traffic. This can be time consuming and sometimes frustrating as online advertising has low rates of return.

External Opportunities

Along with these strengths and weaknesses there are external threats and opportunities to the company. The largest of opportunities is the potential for driving business through affiliate marketing.  Amazon, Ebay, and many other companies have affiliate programs which allow their partners to make percentages of income for sales driven through their sites (Prussakov, 2007). In particular for What To Wear Today, this represents a built in marketplace since the company will be recommending clothing and apparel to purchase.  This potential gives What To Wear Today the opportunity to have a large and expanding market base.

This market base’s opportunity only increases by virtue of the current Y generation’s attitude and use with internet applications. The millennia generation presents millions of clients for the What To Wear Today service. This generation presents a unique marketability in that the service is strictly internet based which the Y generation tends to use the most (Business Week, 1999).  This also allows What To Wear Today to expand its services to many diverse customers. There are many unforeseen potential clients which might be attracted to this type of business such as immigrants, business persons moving into new geographies, and many other people who might need to learn a new fashion sense in order to blend with their new environment (Migration News, 1996).

Threats

However, along with these opportunities there are several threats. The largest threat to What To Wear Today is the threat of service substitution.  Due to the fact that the startup cost is low, substitute services can quickly mimic the service. The threat of substitution is a high risk because of the business being digital in nature. Competitors could quickly and easily copy the business and use cutthroat pricing to compete. This threat of substitution has the potential to adversely affect What To Wear Today through negative association. If a similar substitute service delivers bad service, potential clients might be weary of using What To Wear Today due to this negative association.

Assessment

The SWOTT analysis shows a profitable and expandable business model.  Within the assessment, threats are revealed but these threats are controllable through quality control standards that keep competition from penetrating the market with price gouging.  The strengths of the product outweigh the threats and risks.  The low overhead and low cost of startup makes the risk of enterprise worth undertaking.

The threats of substitution are also controllable through gaining market advantage by being first in the marketplace. The weakness of startup campaigning might be controlled through utilizing social media applications and cross converging information between them. Through a cross convergence of media, the target market (millennia generation) is tuned into the advertising. This strategy is also beneficial because this same target market also uses the internet to research new business options (Business Week, 1999). In this way What To Wear Today is sure to reach its target market. This method is also inexpensive and targets the particular clients desired. The direction of current technological trends gives What To Wear Today the advantage of being able to expand further as technology will only develop the company more.  These factors show that What To Wear Today is a solid risk investment.

 

References

Business Week Generation Y Today’s teens–the biggest bulge since the boomers–may force marketers to toss their old tricks February 15, 1999 issue.

Migration News (1996) Immigrants and US Business  June 1996 Volume 3 Number 6

Workplace Diversity (2010) Advancing The World of Work

Prussakov, E. (2007). A Practical Guide to Affiliate Marketing (pp.16-17), 2007.

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