To maximize their effectiveness, color cases should be printed in color.In the fall of 2010, Sarah Endline, CEO and Founder of sweetriot, an organic chocolate company, was deciding the best way to grow her organic chocolate company, while keeping her chocolate physically and conceptually on the shelf. She wanted to grow the offerings and profits of her company, while maintaining its social mission and unique flair. The case tracks the origins of sweetriot from Sarah's formative early career experiences, to the company's launch and beyond as Sarah prepares future products, establishes production channels, and seeks future funding. Sarah was not content to just be a small New York City candy company. Her goal was for sweetriot to be the number one natural chocolate company in the world and to thus be a vehicle to drive change globally. How can she meet that objective while also keeping the company true to its social roots?
Authors :: Christopher Marquis, Donna Khalife, Bobbi Thomason
Topics :: Organizational Development
Tags :: Growth strategy, Organizational culture, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "sweetriot 2.0" written by Christopher Marquis, Donna Khalife, Bobbi Thomason includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sweetriot Chocolate facing as an external strategic factors. Some of the topics covered in sweetriot 2.0 case study are - Strategic Management Strategies, Growth strategy, Organizational culture, Social enterprise, Social responsibility and Organizational Development.
Some of the macro environment factors that can be used to understand the sweetriot 2.0 casestudy better are - – technology disruption, geopolitical disruptions, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in sweetriot 2.0 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sweetriot Chocolate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sweetriot Chocolate 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 sweetriot 2.0 can be done for the following purposes –
1. Strategic planning using facts provided in sweetriot 2.0 case study
2. Improving business portfolio management of Sweetriot Chocolate
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 Sweetriot Chocolate
Strengths sweetriot 2.0 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sweetriot Chocolate in sweetriot 2.0 Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Sweetriot Chocolate in the sector have low bargaining power. sweetriot 2.0 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sweetriot Chocolate to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Sweetriot Chocolate 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 sweetriot 2.0 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Sweetriot Chocolate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sweetriot Chocolate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Sweetriot Chocolate is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Sweetriot Chocolate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in sweetriot 2.0 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Sweetriot Chocolate 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 sweetriot 2.0 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Sweetriot Chocolate 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 Christopher Marquis, Donna Khalife, Bobbi Thomason 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.
Sustainable margins compare to other players in Organizational Development industry
– sweetriot 2.0 firm has clearly differentiated products in the market place. This has enabled Sweetriot Chocolate to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Sweetriot Chocolate to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Sweetriot Chocolate 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.
Training and development
– Sweetriot Chocolate has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in sweetriot 2.0 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.
Innovation driven organization
– Sweetriot Chocolate is one of the most innovative firm in sector. Manager in sweetriot 2.0 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Sweetriot Chocolate 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
– Sweetriot Chocolate is one of the leading recruiters in the industry. Managers in the sweetriot 2.0 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses sweetriot 2.0 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of sweetriot 2.0 are -
Low market penetration in new markets
– Outside its home market of Sweetriot Chocolate, firm in the HBR case study sweetriot 2.0 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study sweetriot 2.0, it seems that the employees of Sweetriot Chocolate 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 bargaining power of channel partners
– Because of the regulatory requirements, Christopher Marquis, Donna Khalife, Bobbi Thomason suggests that, Sweetriot Chocolate 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.
Capital Spending Reduction
– Even during the low interest decade, Sweetriot Chocolate 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study sweetriot 2.0, in the dynamic environment Sweetriot Chocolate has struggled to respond to the nimble upstart competition. Sweetriot Chocolate has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study sweetriot 2.0 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 Sweetriot Chocolate 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Sweetriot Chocolate 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.
Interest costs
– Compare to the competition, Sweetriot Chocolate 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.
Increasing silos among functional specialists
– The organizational structure of Sweetriot Chocolate is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Sweetriot Chocolate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sweetriot Chocolate to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Sweetriot Chocolate 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study sweetriot 2.0, is just above the industry average. Sweetriot Chocolate 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.
Opportunities sweetriot 2.0 | 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 sweetriot 2.0 are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sweetriot Chocolate 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 Sweetriot Chocolate to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Sweetriot Chocolate can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. sweetriot 2.0 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 Sweetriot Chocolate in the consumer business. Now Sweetriot Chocolate can target international markets with far fewer capital restrictions requirements than the existing system.
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. Sweetriot Chocolate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Sweetriot Chocolate 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sweetriot Chocolate 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.
Better consumer reach
– The expansion of the 5G network will help Sweetriot Chocolate to increase its market reach. Sweetriot Chocolate 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.
Developing new processes and practices
– Sweetriot Chocolate 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. Sweetriot Chocolate 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. Sweetriot Chocolate 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.
Using analytics as competitive advantage
– Sweetriot Chocolate 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 sweetriot 2.0 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sweetriot Chocolate to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Sweetriot Chocolate 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.
Creating value in data economy
– The success of analytics program of Sweetriot Chocolate has opened avenues for new revenue streams for the organization in the industry. This can help Sweetriot Chocolate to build a more holistic ecosystem as suggested in the sweetriot 2.0 case study. Sweetriot Chocolate can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sweetriot Chocolate 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 sweetriot 2.0 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study sweetriot 2.0 are -
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 Sweetriot Chocolate in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Sweetriot Chocolate 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 acceleration in Forth Industrial Revolution
– Sweetriot Chocolate has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Sweetriot Chocolate 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.
Regulatory challenges
– Sweetriot Chocolate 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.
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 Sweetriot Chocolate.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sweetriot Chocolate with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Sweetriot Chocolate business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sweetriot Chocolate 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.
Shortening product life cycle
– it is one of the major threat that Sweetriot Chocolate is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of Sweetriot Chocolate
– 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 Sweetriot Chocolate.
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. Sweetriot Chocolate needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Consumer confidence and its impact on Sweetriot Chocolate 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.
Weighted SWOT Analysis of sweetriot 2.0 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 sweetriot 2.0 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 sweetriot 2.0 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 sweetriot 2.0 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 sweetriot 2.0 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 Sweetriot Chocolate needs to make to build a sustainable competitive advantage.