This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.Describes the operating challenges of Newport Creamery, a Rhode Island-based chain of ice cream restaurants. Profiles the company's transition from longtime family ownership to a real estate developer, the developer's expansion strategy, and the company's subsequent difficulties. The company is forced to seek Chapter 11 protection and eventually a court-appointed interim CEO spends 2 weeks evaluating whether to recommend keeping the company in Chapter 11 or converting to a Chapter 7 case. During the evaluation period, the interim CEO has to manage the company's financial crisis.
Swot Analysis of "Newport Creamery (A)" written by Paul W. Marshall, Todd Thedinga includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Newport Chapter facing as an external strategic factors. Some of the topics covered in Newport Creamery (A) case study are - Strategic Management Strategies, Financial management, Reorganization and Organizational Development.
Some of the macro environment factors that can be used to understand the Newport Creamery (A) casestudy better are - – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing government debt because of Covid-19 spendings, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Newport Creamery (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Newport Creamery (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Newport Chapter, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Newport Chapter 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 Newport Creamery (A) can be done for the following purposes –
1. Strategic planning using facts provided in Newport Creamery (A) case study
2. Improving business portfolio management of Newport Chapter
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 Newport Chapter
Strengths Newport Creamery (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Newport Chapter in Newport Creamery (A) Harvard Business Review case study are -
Ability to recruit top talent
– Newport Chapter is one of the leading recruiters in the industry. Managers in the Newport Creamery (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.
Effective Research and Development (R&D)
– Newport Chapter 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 Newport Creamery (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Newport Chapter has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Newport Creamery (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.
Diverse revenue streams
– Newport Chapter is present in almost all the verticals within the industry. This has provided firm in Newport Creamery (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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Newport Chapter digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Newport Chapter 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.
Operational resilience
– The operational resilience strategy in the Newport Creamery (A) 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 brand equity
– Newport Chapter has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Newport Chapter to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Newport Chapter 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 Newport Chapter is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Newport Creamery (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Newport Chapter has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Newport Chapter 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
– Newport Chapter is one of the most innovative firm in sector. Manager in Newport Creamery (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Newport Chapter 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.
Highly skilled collaborators
– Newport Chapter 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 Newport Creamery (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Newport Creamery (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Newport Creamery (A) are -
Increasing silos among functional specialists
– The organizational structure of Newport Chapter is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Newport Chapter needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Newport Chapter to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Newport Chapter products
– To increase the profitability and margins on the products, Newport Chapter needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Newport Chapter 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 - Newport Creamery (A) should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Newport Chapter is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Newport Creamery (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.
Slow decision making process
– As mentioned earlier in the report, Newport Chapter 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. Newport Chapter 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.
Capital Spending Reduction
– Even during the low interest decade, Newport Chapter 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Newport Creamery (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Newport Chapter has relatively successful track record of launching new products.
High cash cycle compare to competitors
Newport Chapter 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.
Interest costs
– Compare to the competition, Newport Chapter 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.
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 Newport Chapter supply chain. Even after few cautionary changes mentioned in the HBR case study - Newport Creamery (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Newport Chapter vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Newport Chapter 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 Newport Creamery (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 Newport Creamery (A) are -
Leveraging digital technologies
– Newport Chapter 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.
Learning at scale
– Online learning technologies has now opened space for Newport Chapter 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
– Newport Chapter can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Newport Creamery (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
– Newport Chapter 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Newport Chapter 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 Newport Chapter to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Newport Chapter can use these opportunities to build new business models that can help the communities that Newport Chapter operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Newport Chapter 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Newport Chapter is facing challenges because of the dominance of functional experts in the organization. Newport Creamery (A) 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.
Using analytics as competitive advantage
– Newport Chapter 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 Newport Creamery (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Newport Chapter to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Newport Chapter 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.
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 Newport Chapter in the consumer business. Now Newport Chapter can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Newport Chapter has opened avenues for new revenue streams for the organization in the industry. This can help Newport Chapter to build a more holistic ecosystem as suggested in the Newport Creamery (A) case study. Newport Chapter can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Newport Chapter 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.
Threats Newport Creamery (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Newport Creamery (A) are -
Regulatory challenges
– Newport Chapter 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.
Stagnating economy with rate increase
– Newport Chapter can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Newport Chapter with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Newport Chapter
– 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 Newport Chapter.
Shortening product life cycle
– it is one of the major threat that Newport Chapter is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Newport Chapter has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Newport Chapter 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 Newport Chapter 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 Newport Chapter 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Newport Chapter 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 Newport Creamery (A) .
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 Newport Chapter.
Environmental challenges
– Newport Chapter 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. Newport Chapter can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Newport Creamery (A), Newport Chapter 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 .
Weighted SWOT Analysis of Newport Creamery (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 Newport Creamery (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 Newport Creamery (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 Newport Creamery (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 Newport Creamery (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 Newport Chapter needs to make to build a sustainable competitive advantage.
