Describes the transformation of a formerly state-owned meat processing plant in Russia into a privately-owned and operated food processing conglomerate under Russia's economic reforms of the 1990s. Among the challenges the CEO, Igor Babaev, and his top management team must address is what to do when sales plummet as a result of false rumors that the company's meat products are being produced with tainted and potentially deadly meat.
Swot Analysis of "Cherkizovsky Group (A)" written by Lynn Sharp Paine, Harold F. Hogan Jr. includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Meat Processing facing as an external strategic factors. Some of the topics covered in Cherkizovsky Group (A) case study are - Strategic Management Strategies, Change management, Competition, Competitive strategy, Economy, Emerging markets, Government, Organizational culture, Organizational structure, Social responsibility and Organizational Development.
Some of the macro environment factors that can be used to understand the Cherkizovsky Group (A) casestudy better are - – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing commodity prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Cherkizovsky Group (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cherkizovsky Group (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Meat Processing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Meat Processing 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 Cherkizovsky Group (A) can be done for the following purposes –
1. Strategic planning using facts provided in Cherkizovsky Group (A) case study
2. Improving business portfolio management of Meat Processing
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 Meat Processing
Strengths Cherkizovsky Group (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Meat Processing in Cherkizovsky Group (A) Harvard Business Review case study are -
Strong track record of project management
– Meat Processing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Meat Processing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cherkizovsky Group (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Meat Processing 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.
Organizational Resilience of Meat Processing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Meat Processing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Meat Processing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Organizational Development field
– Meat Processing 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 Meat Processing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Meat Processing is one of the leading recruiters in the industry. Managers in the Cherkizovsky Group (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Meat Processing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Meat Processing 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.
Innovation driven organization
– Meat Processing is one of the most innovative firm in sector. Manager in Cherkizovsky Group (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Meat Processing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Meat Processing has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Organizational Development industry
– Cherkizovsky Group (A) firm has clearly differentiated products in the market place. This has enabled Meat Processing to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Meat Processing to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Meat Processing is present in almost all the verticals within the industry. This has provided firm in Cherkizovsky Group (A) 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.
Weaknesses Cherkizovsky Group (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cherkizovsky Group (A) are -
Need for greater diversity
– Meat Processing 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.
Low market penetration in new markets
– Outside its home market of Meat Processing, firm in the HBR case study Cherkizovsky Group (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cherkizovsky Group (A), in the dynamic environment Meat Processing has struggled to respond to the nimble upstart competition. Meat Processing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Cherkizovsky Group (A), it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Meat Processing 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 - Cherkizovsky Group (A) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Meat Processing is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Meat Processing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Meat Processing to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Meat Processing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cherkizovsky Group (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Meat Processing products
– To increase the profitability and margins on the products, Meat Processing needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynn Sharp Paine, Harold F. Hogan Jr. suggests that, Meat Processing 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.
Slow decision making process
– As mentioned earlier in the report, Meat Processing 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. Meat Processing 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.
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 Meat Processing supply chain. Even after few cautionary changes mentioned in the HBR case study - Cherkizovsky Group (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Meat Processing vulnerable to further global disruptions in South East Asia.
Opportunities Cherkizovsky Group (A) | 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 Cherkizovsky Group (A) are -
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 Meat Processing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Meat Processing 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, Cherkizovsky Group (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Meat Processing 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.
Better consumer reach
– The expansion of the 5G network will help Meat Processing to increase its market reach. Meat Processing will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Meat Processing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Meat Processing 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.
Leveraging digital technologies
– Meat Processing 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Meat Processing can use these opportunities to build new business models that can help the communities that Meat Processing operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Learning at scale
– Online learning technologies has now opened space for Meat Processing 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.
Buying journey improvements
– Meat Processing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cherkizovsky Group (A) 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.
Developing new processes and practices
– Meat Processing 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 Meat Processing has opened avenues for new revenue streams for the organization in the industry. This can help Meat Processing to build a more holistic ecosystem as suggested in the Cherkizovsky Group (A) case study. Meat Processing 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 Organizational Development industry, but it has also influenced the consumer preferences. Meat Processing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Cherkizovsky Group (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cherkizovsky Group (A) are -
Stagnating economy with rate increase
– Meat Processing 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.
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 Meat Processing 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. Meat Processing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Meat Processing 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 Cherkizovsky Group (A) .
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.
High dependence on third party suppliers
– Meat Processing 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.
Environmental challenges
– Meat Processing 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. Meat Processing can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing wage structure of Meat Processing
– 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 Meat Processing.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Meat Processing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cherkizovsky Group (A), Meat Processing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Technology acceleration in Forth Industrial Revolution
– Meat Processing has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Meat Processing 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.
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. Meat Processing needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Weighted SWOT Analysis of Cherkizovsky Group (A) 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 Cherkizovsky Group (A) 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 Cherkizovsky Group (A) 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 Cherkizovsky Group (A) 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 Cherkizovsky Group (A) 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 Meat Processing needs to make to build a sustainable competitive advantage.
