Case Study Description of Delhaize Group: Developing Leaders
Delhaize Group, the Belgian-based global food retailer, was focused on competing in the food retailing industry by developing leading positions in key markets via localized retailing strategies. Delhaize was committed to offering its customers superior value while maintaining high social, environmental, and ethical standards. For Frans Muller, Delhaize's president and CEO, the key to executing on this strategy was ensuring that the Group was developing leaders with the requisite skills and competencies. In light of this, Muller felt it was important to assess the Group's leadership development practices. Were the current training and development programs effective? What were the leadership skills that would be needed to execute on Delhaize's strategic plan, both today and in the future?
Swot Analysis of "Delhaize Group: Developing Leaders" written by Boris Groysberg, Sarah L. Abbott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Delhaize Delhaize's facing as an external strategic factors. Some of the topics covered in Delhaize Group: Developing Leaders case study are - Strategic Management Strategies, International business, Leadership development, Organizational culture, Talent management and Organizational Development.
Some of the macro environment factors that can be used to understand the Delhaize Group: Developing Leaders casestudy better are - – increasing commodity prices, increasing transportation and logistics costs, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Delhaize Group: Developing Leaders
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Delhaize Group: Developing Leaders case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Delhaize Delhaize's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Delhaize Delhaize's 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 Delhaize Group: Developing Leaders can be done for the following purposes –
1. Strategic planning using facts provided in Delhaize Group: Developing Leaders case study
2. Improving business portfolio management of Delhaize Delhaize's
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 Delhaize Delhaize's
Strengths Delhaize Group: Developing Leaders | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Delhaize Delhaize's in Delhaize Group: Developing Leaders Harvard Business Review case study are -
Ability to recruit top talent
– Delhaize Delhaize's is one of the leading recruiters in the industry. Managers in the Delhaize Group: Developing Leaders are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Delhaize Delhaize's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Delhaize Delhaize's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Delhaize Delhaize's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Delhaize Delhaize's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Delhaize Group: Developing Leaders 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.
High switching costs
– The high switching costs that Delhaize Delhaize's 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.
Low bargaining power of suppliers
– Suppliers of Delhaize Delhaize's in the sector have low bargaining power. Delhaize Group: Developing Leaders has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Delhaize Delhaize's to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Delhaize Delhaize's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Delhaize Delhaize's 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
– Delhaize Group: Developing Leaders firm has clearly differentiated products in the market place. This has enabled Delhaize Delhaize's to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Delhaize Delhaize's to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Delhaize Delhaize's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Delhaize Delhaize's 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.
Cross disciplinary teams
– Horizontal connected teams at the Delhaize Delhaize's 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.
Ability to lead change in Organizational Development field
– Delhaize Delhaize's 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 Delhaize Delhaize's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Delhaize Delhaize's 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 Delhaize Group: Developing Leaders HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Delhaize Group: Developing Leaders | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Delhaize Group: Developing Leaders are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Delhaize Group: Developing Leaders, is just above the industry average. Delhaize Delhaize's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Delhaize Group: Developing Leaders, it seems that the employees of Delhaize Delhaize's 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 operating costs
– Compare to the competitors, firm in the HBR case study Delhaize Group: Developing Leaders has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Delhaize Delhaize's 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Boris Groysberg, Sarah L. Abbott suggests that, Delhaize Delhaize's 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.
High cash cycle compare to competitors
Delhaize Delhaize's 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 Delhaize Delhaize's is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Delhaize Delhaize's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Delhaize Delhaize's to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Delhaize Delhaize's products
– To increase the profitability and margins on the products, Delhaize Delhaize's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Delhaize Delhaize's 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. Delhaize Delhaize's 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.
No frontier risks strategy
– After analyzing the HBR case study Delhaize Group: Developing Leaders, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Delhaize Delhaize's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Delhaize Group: Developing Leaders, in the dynamic environment Delhaize Delhaize's has struggled to respond to the nimble upstart competition. Delhaize Delhaize's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Delhaize Group: Developing Leaders | 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 Delhaize Group: Developing Leaders are -
Better consumer reach
– The expansion of the 5G network will help Delhaize Delhaize's to increase its market reach. Delhaize Delhaize's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Delhaize Delhaize's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Delhaize Delhaize's 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.
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. Delhaize Delhaize's 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. Delhaize Delhaize's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Delhaize Delhaize's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Delhaize Delhaize's to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Delhaize Delhaize's 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, Delhaize Group: Developing Leaders, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Delhaize Delhaize's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Delhaize Group: Developing Leaders 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.
Learning at scale
– Online learning technologies has now opened space for Delhaize Delhaize's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Delhaize Delhaize's can use these opportunities to build new business models that can help the communities that Delhaize Delhaize's operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Using analytics as competitive advantage
– Delhaize Delhaize's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Delhaize Group: Developing Leaders - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Delhaize Delhaize's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Delhaize Delhaize's 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.
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 Delhaize Delhaize's in the consumer business. Now Delhaize Delhaize's can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Delhaize Delhaize's 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.
Threats Delhaize Group: Developing Leaders External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Delhaize Group: Developing Leaders are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Delhaize Delhaize's in the Organizational Development industry. The Organizational Development 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Delhaize Delhaize's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Delhaize Delhaize's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Delhaize Delhaize's 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.
Consumer confidence and its impact on Delhaize Delhaize's 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.
Technology acceleration in Forth Industrial Revolution
– Delhaize Delhaize's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Delhaize Delhaize's 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.
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 Delhaize Delhaize's in the Organizational Development sector and impact the bottomline of the organization.
Regulatory challenges
– Delhaize Delhaize's 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.
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.
Shortening product life cycle
– it is one of the major threat that Delhaize Delhaize's is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Delhaize Delhaize's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Delhaize Group: Developing Leaders, Delhaize Delhaize's 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 .
Environmental challenges
– Delhaize Delhaize's 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. Delhaize Delhaize's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Weighted SWOT Analysis of Delhaize Group: Developing Leaders 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 Delhaize Group: Developing Leaders 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 Delhaize Group: Developing Leaders 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 Delhaize Group: Developing Leaders 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 Delhaize Group: Developing Leaders 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 Delhaize Delhaize's needs to make to build a sustainable competitive advantage.