Swot Analysis of "Building a Sustainable, Profitable Business: Fair Trade Coffee (C)" written by Robert Hooijberg, Jan Van Der Kaaij includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coffee Fair facing as an external strategic factors. Some of the topics covered in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) case study are - Strategic Management Strategies, Strategic planning and Management.
Some of the macro environment factors that can be used to understand the Building a Sustainable, Profitable Business: Fair Trade Coffee (C) casestudy better are - – there is backlash against globalization, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing energy prices, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
increasing transportation and logistics costs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Building a Sustainable, Profitable Business: Fair Trade Coffee (C)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coffee Fair, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coffee Fair operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Building a Sustainable, Profitable Business: Fair Trade Coffee (C) can be done for the following purposes –
1. Strategic planning using facts provided in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) case study
2. Improving business portfolio management of Coffee Fair
3. Assessing feasibility of the new initiative in Management field.
4. Making a Management topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coffee Fair
Strengths Building a Sustainable, Profitable Business: Fair Trade Coffee (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coffee Fair in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) Harvard Business Review case study are -
Innovation driven organization
– Coffee Fair is one of the most innovative firm in sector. Manager in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Coffee Fair has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Coffee Fair has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Coffee Fair is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Coffee Fair is one of the leading recruiters in the industry. Managers in the Building a Sustainable, Profitable Business: Fair Trade Coffee (C) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Coffee Fair in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Management industry
– Building a Sustainable, Profitable Business: Fair Trade Coffee (C) firm has clearly differentiated products in the market place. This has enabled Coffee Fair to fetch slight price premium compare to the competitors in the Management industry. The sustainable margins have also helped Coffee Fair to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Coffee Fair has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Coffee Fair has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coffee Fair has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Coffee Fair
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Coffee Fair does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Coffee Fair has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Building a Sustainable, Profitable Business: Fair Trade Coffee (C) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Coffee Fair is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert Hooijberg, Jan Van Der Kaaij can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Building a Sustainable, Profitable Business: Fair Trade Coffee (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Building a Sustainable, Profitable Business: Fair Trade Coffee (C) are -
Capital Spending Reduction
– Even during the low interest decade, Coffee Fair has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Coffee Fair has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Coffee Fair even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Coffee Fair has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Skills based hiring
– The stress on hiring functional specialists at Coffee Fair has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Building a Sustainable, Profitable Business: Fair Trade Coffee (C) can leverage the sales team experience to cultivate customer relationships as Coffee Fair is planning to shift buying processes online.
Products dominated business model
– Even though Coffee Fair has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Building a Sustainable, Profitable Business: Fair Trade Coffee (C) should strive to include more intangible value offerings along with its core products and services.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Coffee Fair supply chain. Even after few cautionary changes mentioned in the HBR case study - Building a Sustainable, Profitable Business: Fair Trade Coffee (C), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coffee Fair vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C), it seems that the employees of Coffee Fair don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Building a Sustainable, Profitable Business: Fair Trade Coffee (C) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Coffee Fair has relatively successful track record of launching new products.
High cash cycle compare to competitors
Coffee Fair has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C), in the dynamic environment Coffee Fair has struggled to respond to the nimble upstart competition. Coffee Fair has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Building a Sustainable, Profitable Business: Fair Trade Coffee (C) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) are -
Learning at scale
– Online learning technologies has now opened space for Coffee Fair to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Coffee Fair can use the latest technology developments to improve its manufacturing and designing process in Management segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Coffee Fair can develop new processes and procedures in Management industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Management industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Coffee Fair can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Coffee Fair can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coffee Fair is facing challenges because of the dominance of functional experts in the organization. Building a Sustainable, Profitable Business: Fair Trade Coffee (C) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Coffee Fair can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Coffee Fair has opened avenues for new revenue streams for the organization in the industry. This can help Coffee Fair to build a more holistic ecosystem as suggested in the Building a Sustainable, Profitable Business: Fair Trade Coffee (C) case study. Coffee Fair can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Management industry, but it has also influenced the consumer preferences. Coffee Fair can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Coffee Fair has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Coffee Fair can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Building a Sustainable, Profitable Business: Fair Trade Coffee (C) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Coffee Fair in the consumer business. Now Coffee Fair can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Coffee Fair can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Coffee Fair can use these opportunities to build new business models that can help the communities that Coffee Fair operates in. Secondly it can use opportunities from government spending in Management sector.
Threats Building a Sustainable, Profitable Business: Fair Trade Coffee (C) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coffee Fair can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Coffee Fair needs to understand the core reasons impacting the Management industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Coffee Fair can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Coffee Fair with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Coffee Fair high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Coffee Fair business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Coffee Fair will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Coffee Fair needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Coffee Fair can take advantage of this fund but it will also bring new competitors in the Management industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coffee Fair in the Management industry. The Management industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Coffee Fair demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C), Coffee Fair may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Management .
Weighted SWOT Analysis of Building a Sustainable, Profitable Business: Fair Trade Coffee (C) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Building a Sustainable, Profitable Business: Fair Trade Coffee (C) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Building a Sustainable, Profitable Business: Fair Trade Coffee (C) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Coffee Fair needs to make to build a sustainable competitive advantage.
