Case Study Description of Jacobs Suchard: Reorganizing for 1992
Jacobs Suchard, the Swiss-based coffee and chocolate producer, is preparing for the common market and EEC 1992. At the time of the case, the company is still organized toward independent, local country markets, and believes it must move toward a more global organization structure. The case covers actions taken to date and plans for the future.
Swot Analysis of "Jacobs Suchard: Reorganizing for 1992" written by Robert G. Eccles, Philip Holland includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Suchard Jacobs facing as an external strategic factors. Some of the topics covered in Jacobs Suchard: Reorganizing for 1992 case study are - Strategic Management Strategies, Growth strategy, International business, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Jacobs Suchard: Reorganizing for 1992 casestudy better are - – geopolitical disruptions, increasing commodity prices, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of Jacobs Suchard: Reorganizing for 1992
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Jacobs Suchard: Reorganizing for 1992 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suchard Jacobs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suchard Jacobs 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 Jacobs Suchard: Reorganizing for 1992 can be done for the following purposes –
1. Strategic planning using facts provided in Jacobs Suchard: Reorganizing for 1992 case study
2. Improving business portfolio management of Suchard Jacobs
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Suchard Jacobs
Strengths Jacobs Suchard: Reorganizing for 1992 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suchard Jacobs in Jacobs Suchard: Reorganizing for 1992 Harvard Business Review case study are -
Ability to recruit top talent
– Suchard Jacobs is one of the leading recruiters in the industry. Managers in the Jacobs Suchard: Reorganizing for 1992 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Suchard Jacobs 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 Jacobs Suchard: Reorganizing for 1992 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Suchard Jacobs are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Suchard Jacobs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Suchard Jacobs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Organizational Development field
– Suchard Jacobs is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Suchard Jacobs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Suchard Jacobs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suchard Jacobs 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.
Superior customer experience
– The customer experience strategy of Suchard Jacobs 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 Organizational Development industry
– Jacobs Suchard: Reorganizing for 1992 firm has clearly differentiated products in the market place. This has enabled Suchard Jacobs to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Suchard Jacobs to invest into research and development (R&D) and innovation.
Innovation driven organization
– Suchard Jacobs is one of the most innovative firm in sector. Manager in Jacobs Suchard: Reorganizing for 1992 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Suchard Jacobs is present in almost all the verticals within the industry. This has provided firm in Jacobs Suchard: Reorganizing for 1992 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Suchard Jacobs 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 G. Eccles, Philip Holland 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.
Operational resilience
– The operational resilience strategy in the Jacobs Suchard: Reorganizing for 1992 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Jacobs Suchard: Reorganizing for 1992 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jacobs Suchard: Reorganizing for 1992 are -
High cash cycle compare to competitors
Suchard Jacobs 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.
Increasing silos among functional specialists
– The organizational structure of Suchard Jacobs is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Suchard Jacobs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Suchard Jacobs to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Suchard Jacobs has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Aligning sales with marketing
– It come across in the case study Jacobs Suchard: Reorganizing for 1992 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 Jacobs Suchard: Reorganizing for 1992 can leverage the sales team experience to cultivate customer relationships as Suchard Jacobs is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Jacobs Suchard: Reorganizing for 1992, in the dynamic environment Suchard Jacobs has struggled to respond to the nimble upstart competition. Suchard Jacobs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Suchard Jacobs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Jacobs Suchard: Reorganizing for 1992 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Suchard Jacobs 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert G. Eccles, Philip Holland suggests that, Suchard Jacobs is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Jacobs Suchard: Reorganizing for 1992, it seems that the employees of Suchard Jacobs 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Suchard Jacobs needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Suchard Jacobs 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.
Opportunities Jacobs Suchard: Reorganizing for 1992 | 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 Jacobs Suchard: Reorganizing for 1992 are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Suchard Jacobs can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Jacobs Suchard: Reorganizing for 1992, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Suchard Jacobs to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suchard Jacobs can use these opportunities to build new business models that can help the communities that Suchard Jacobs operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Suchard Jacobs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Suchard Jacobs can develop new processes and procedures in Organizational Development 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.
Creating value in data economy
– The success of analytics program of Suchard Jacobs has opened avenues for new revenue streams for the organization in the industry. This can help Suchard Jacobs to build a more holistic ecosystem as suggested in the Jacobs Suchard: Reorganizing for 1992 case study. Suchard Jacobs can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Suchard Jacobs can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Suchard Jacobs is facing challenges because of the dominance of functional experts in the organization. Jacobs Suchard: Reorganizing for 1992 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.
Learning at scale
– Online learning technologies has now opened space for Suchard Jacobs 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Suchard Jacobs in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Suchard Jacobs can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suchard Jacobs 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. Suchard Jacobs 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.
Leveraging digital technologies
– Suchard Jacobs can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Jacobs Suchard: Reorganizing for 1992 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Jacobs Suchard: Reorganizing for 1992 are -
Increasing wage structure of Suchard Jacobs
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Suchard Jacobs.
Shortening product life cycle
– it is one of the major threat that Suchard Jacobs is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Suchard Jacobs needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Suchard Jacobs 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 Jacobs Suchard: Reorganizing for 1992 .
Technology acceleration in Forth Industrial Revolution
– Suchard Jacobs has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Suchard Jacobs needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Suchard Jacobs business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Suchard Jacobs in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Suchard Jacobs 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Suchard Jacobs.
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. Suchard Jacobs 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
– Suchard Jacobs 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. Suchard Jacobs can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Suchard Jacobs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Suchard Jacobs 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.
Weighted SWOT Analysis of Jacobs Suchard: Reorganizing for 1992 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 Jacobs Suchard: Reorganizing for 1992 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 Jacobs Suchard: Reorganizing for 1992 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 Jacobs Suchard: Reorganizing for 1992 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 Jacobs Suchard: Reorganizing for 1992 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 Suchard Jacobs needs to make to build a sustainable competitive advantage.
