A strengths, weaknesses, opportunities and threats, or SWOT, analysis lets your fashion business or brand see how it stacks up against the competition. The analysis tool will also help you understand where your brand stands in the larger fashion marketplace. A proper examination of your design house should include your entire business and its presence in different regional markets.
SWOT Analysis Preparation
The fashion industry is divided into the creative and sales functions, that is, design and production on one side and sales and distribution on the other. Geographically, the fashion industry is divided into three regions: U.S., Europe and Asia. Use SWOT to analyze your brand in terms of all four functions and its presence in each of the three regions.
Examination of Strengths
Include as strengths any formulas or policies your company uses that give it an edge in name recognition, brand positioning and bottom-line revenue. For example, many designers have two avenues of distribution, a couture line and a ready-to-wear line more accessible to buyers with average incomes. This is a strength because it allows the designer's name to reach a larger audience of potential customers and the brand to make more sales.
For example, Giorgio Armani includes high-priced couture and a ready-to-wear line available through Armani Exchange; Issac Mizrahi designs both couture and a ready-to-wear line sold exclusively through retailer Target.
Discussion of Weaknesses
Consider as weaknesses any unusual or unnecessary costs, unknown designers or lack of presence in a particular region. Consider also everything used to define strengths. A lack of any of the strengths is considered a weakness within SWOT analysis.
For example, if your brand currently caters to a couture only market, it is missing the diversification of two avenues of distribution, a weakness for all but the most established brands – think Chanel.
Identify Possible Opportunities
Look at the politics of each region, both in itself and in relation to the U.S., to identify opportunities. Watch for the repeal of trade embargoes, a new or newly accessible source of raw materials, such as fabric or thread, or a newly green source of raw materials like sustainable natural fabric fiber.
For example, for years China was inaccessible as a source of labor, supply or export sales due to inter-governmental tension and its attitude toward commerce. However, recently China has loosened commercial restrictions and has become a more open source for manufacturing, raw materials and the import and export of goods. This provided an opportunity to access a cheaper labor force, obtained lower price goods and reach an entirely new market. Technological advancements in machinery are also opportunities when the technology makes production or distribution faster or increases its scale, such as machines that cut more garment pieces at a time.
Prepare for Threats
Politics and economies are primary sources of threats to a brand in the fashion industry. Trade embargoes, political unrest in an area of raw material supply and economic downturns that lead to restricted consumer spending are all threats to the accessibility of raw materials, brand exposure and name recognition, distribution and consumer purchasing.
A secondary consideration in the fashion industry is the changing political climate in developing countries where cheap labor is often found. As consumers develop a greater desire to learn where products are manufactured and under what conditions, manufacturers must consider the blow to company image continued reliance on a cheap labor market would provide.
Comparison and Planning
Compare your brand to its competitors. What strengths, weaknesses, opportunities and threats are the same? Which are unique to a competitor or to you? Make changes to capitalize on your strengths and turn both your competitors' strengths and weaknesses into your strengths.
Capitalize on your existing opportunities. Find ways to turn threats into opportunities. Hire a lobbyist, negotiate with politicians yourself or farm your own raw materials. Consider working with competitors to circumvent a threat, such as a supplier boycott, if the threat is too big to eliminate on your own.
