Taking each quadrant in turn:
SO – using strengths to take advantage of opportunities. A number of possible options might be considered here. Hammond
Shoes’ retail expertise is an acknowledged strength of the company, and it may be possible to use it to take advantage of the
opportunities provided by increased consumer spending and consumerism in Arnland. Two possible options come to mind.
Firstly, the company could consider selling competing products or complementary goods in its retail shops. This would give
consumers a greater choice of products and allow Hammond Shoes to reap some of the profit margins enjoyed by its
competitors. Given the company’s acknowledged retail expertise, this option should help preserve the long-term future of the
shops.
Secondly, the increasing appetite of the public for safe, car-free shopping from a variety of shops might suggest the
development of retail ‘villages’ on the land that Hammond Shoes have, both in Petatown and in the, now disused, factory in
the north of the country. This option would combine the twin strengths of retail experience and the availability of land owned
by the company, to provide consumers with an experience they increasingly seek and value. The fact that only two sites are
available in towns where there are currently no Hammond Shoes retail shops means that there is no apparent reason why
the creation of the retail villages should not be combined with the diversification of the products offered in the retail stores.
The software expertise of the company’s information systems department can also be used to fulfil consumer’s desire for
increased purchases over the Internet. Up to now this software expertise has been mainly used to develop in-house production
and retail systems which are acknowledged as being amongst the best in the industry. This expertise might be used to develop
an innovative e-commerce site. This, of course, also opens up the possibility of sales outside Arnland, something that is
unlikely at the moment, given that all the retail shops are within the country.
WO – options that take advantage of opportunities by overcoming weaknesses. To some extent this option contains the
approach suggested by the Board, upgrading production machinery. This is addressing a known weakness (out-dated
production facilities), simultaneously tackling another weakness, the cost of production. Here the approach is to reduce unit
cost by improving productivity and reducing energy costs through the use of modern production equipment. The Board
perceives that overcoming these weaknesses will allow the company to continue to compete in the market they are familiar
with.
Reducing energy costs might also be used to appeal to the increasing number of green consumers of Arnland who take into
account ethical issues when making purchasing decisions. The business analysts have identified these savings as an
opportunity in their SWOT analysis. They should be attracted to a product that has been produced using an energy efficient
process, and has not travelled thousands of kilometres (using energy consuming boats, road transport and trains). At the time
of writing, there is an increased interest in measuring product miles or kilometres, a term used to assess the environmental
impact of delivering a product from its point of production to its point of sale. Although the measures are controversial, this
need not necessarily concern the messages put out by Hammond Shoes’ marketing department.
Hammond Shoes might also use the negative impact of television programmes showing the use of cheap and exploited labour
in the production of goods in Orietaria as part of their marketing message. Although the consultants have suggested that the
production of shoes in Arnland is a weakness (because of high costs) it could be turned into a strength if the country of origin
becomes an important part of the buying decision for people who are willing to pay a premium for ethically sourced products.
This might be supported by political initiatives, for example, the support of one of the political parties in Arnland for
environmentally responsible purchasing. Their manifesto suggests that ‘shorter shipping distances reduce energy use and
pollution. Purchasing locally supports communities and local jobs’.
ST – options that use strengths to avoid threats. The company is an acknowledged leader in shoe design and distribution
software. It also has significant retail competencies. The company might consider reviewing these to see whether innovative
production and retail systems could not be combined and extended to provide economies of supply that partly compensate
for the relative high cost of production. So, although production costs cannot easily be reduced, supply and storage costs
