THE SWOT

SWOT Analysis

Strengths

The main strength of Dsquared2 is its strong brand and prominent position within the target market segment.  The proposed market entry for the new premium vodka under the umbrella of the Dsquared2 brand will be in the form of a brand extension (Kotler and Keller, 2006). Research has shown that when new products are launched under existing brands then the chances of success are increased significantly. Dsquared2 has taken its time and considerable money to develop in the market and this is a major advantage to the business as it looks at suitable brand extensions that will ultimately assist the brand to increase in popularity and continue to build brand equity (Lindstrom, 2005).

Weaknesses

This is a new market for Dsquared2 and they have no previous experience of any product other than fashion.  Launching a new product to the market is a task that requires tremendous focus and it is possible that the time and attention required to launch the new premium brand vodka could have an impact on the organisation’s main product offerings (Kotler and Keller, 2006). A failure to focus on the task in hand could have a dramatic impact on the future viability of Dsquared2.

Opportunities

The purchase price and potential retail price certainly indicates that there could be a healthy profit to make in Dsquared2 vodka.  The vodka can be produced and distributed under the private label of Dsquared2 and this presents the proprietors with an opportunity to take up a position in the vodka market which has had several new market entrants recently (Hemley and Musonera, 2007). To make the most out of the brand that they have created, existing products sold by the company would be a good fit with private label vodka. 

Threats

The vodka market is highly competitive with several dominant players that have the financial resources to intimidate any company considering entering the market.  Smirnoff are the market leaders and have invested a significant amount of money to become established in the market but in doing so they have also increased the popularity of vodka as a drinking spirit and this has paved the way for new entrants to the market (Hemley and Musonera, 2007).  Entering the market as a premium product with a premium price may just be the key to success for Dsquared2 vodka as it can avoid price wars with the dominant companies in the vodka market.  Counterfeit vodka may also be a big threat to new private label vodkas and that includes those under recognisable brands because consumers may take time to gain trust in the brand (Telegraph, 2011).