Describes the change process Whitbread employed in transforming its organization and culture from a single underperforming business operating in a relatively stable environment to a multibusiness, high-commitment, and high-performance corporation operating in more competitive markets. Describes how CEO David Thomas employed the Strategic Fitness Process (SFP), a strategic leadership process for organizational and cultural change, to create commitment to change within his leadership team and among 100 key executives in all parts of the company. Allowing a senior team to reinvent the corporation, SFP guides the senior team in developing a statement of strategic and organizational direction. SFP then guides the senior team through a systematic diagnosis as well as through change development and execution.
Swot Analysis of "Whitbread PLC (A)" written by Michael Beer, James Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sfp Whitbread facing as an external strategic factors. Some of the topics covered in Whitbread PLC (A) case study are - Strategic Management Strategies, Knowledge management, Leadership, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the Whitbread PLC (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, increasing commodity prices, supply chains are disrupted by pandemic ,
increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Whitbread PLC (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Whitbread PLC (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sfp Whitbread, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sfp Whitbread 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 Whitbread PLC (A) can be done for the following purposes –
1. Strategic planning using facts provided in Whitbread PLC (A) case study
2. Improving business portfolio management of Sfp Whitbread
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 Sfp Whitbread
Strengths Whitbread PLC (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sfp Whitbread in Whitbread PLC (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Sfp Whitbread 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 Whitbread PLC (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.
Low bargaining power of suppliers
– Suppliers of Sfp Whitbread in the sector have low bargaining power. Whitbread PLC (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sfp Whitbread to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Organizational Development industry
– Whitbread PLC (A) firm has clearly differentiated products in the market place. This has enabled Sfp Whitbread to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Sfp Whitbread to invest into research and development (R&D) and innovation.
Analytics focus
– Sfp Whitbread 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 Michael Beer, James Weber 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.
Ability to lead change in Organizational Development field
– Sfp Whitbread 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 Sfp Whitbread in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Sfp Whitbread is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Sfp Whitbread has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sfp Whitbread 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.
Ability to recruit top talent
– Sfp Whitbread is one of the leading recruiters in the industry. Managers in the Whitbread PLC (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.
High switching costs
– The high switching costs that Sfp Whitbread 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.
Superior customer experience
– The customer experience strategy of Sfp Whitbread in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Sfp Whitbread has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sfp Whitbread to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Sfp Whitbread
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sfp Whitbread does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Whitbread PLC (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Whitbread PLC (A) are -
Low market penetration in new markets
– Outside its home market of Sfp Whitbread, firm in the HBR case study Whitbread PLC (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Sfp Whitbread 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.
Increasing silos among functional specialists
– The organizational structure of Sfp Whitbread is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Sfp Whitbread needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sfp Whitbread to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Whitbread PLC (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 Sfp Whitbread has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Whitbread PLC (A) HBR case study mentions - Sfp Whitbread takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Whitbread PLC (A), is just above the industry average. Sfp Whitbread 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Whitbread PLC (A), in the dynamic environment Sfp Whitbread has struggled to respond to the nimble upstart competition. Sfp Whitbread has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Whitbread PLC (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Whitbread PLC (A) can leverage the sales team experience to cultivate customer relationships as Sfp Whitbread is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Beer, James Weber suggests that, Sfp Whitbread 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.
Interest costs
– Compare to the competition, Sfp Whitbread 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 Sfp Whitbread supply chain. Even after few cautionary changes mentioned in the HBR case study - Whitbread PLC (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sfp Whitbread vulnerable to further global disruptions in South East Asia.
Opportunities Whitbread PLC (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 Whitbread PLC (A) are -
Creating value in data economy
– The success of analytics program of Sfp Whitbread has opened avenues for new revenue streams for the organization in the industry. This can help Sfp Whitbread to build a more holistic ecosystem as suggested in the Whitbread PLC (A) case study. Sfp Whitbread can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Sfp Whitbread can use these opportunities to build new business models that can help the communities that Sfp Whitbread operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Using analytics as competitive advantage
– Sfp Whitbread 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 Whitbread PLC (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sfp Whitbread to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Sfp Whitbread to increase its market reach. Sfp Whitbread 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sfp Whitbread 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, Whitbread PLC (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.
Leveraging digital technologies
– Sfp Whitbread 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.
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 Sfp Whitbread 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.
Manufacturing automation
– Sfp Whitbread 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.
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. Sfp Whitbread can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Sfp Whitbread 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.
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. Sfp Whitbread can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sfp Whitbread 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
– Sfp Whitbread 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.
Threats Whitbread PLC (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Whitbread PLC (A) are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sfp Whitbread can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Environmental challenges
– Sfp Whitbread 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. Sfp Whitbread can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
High dependence on third party suppliers
– Sfp Whitbread 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.
Consumer confidence and its impact on Sfp Whitbread 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.
Stagnating economy with rate increase
– Sfp Whitbread 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.
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. Sfp Whitbread needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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 Sfp Whitbread business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Sfp Whitbread 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Whitbread PLC (A), Sfp Whitbread 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sfp Whitbread with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Sfp Whitbread 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.
Weighted SWOT Analysis of Whitbread PLC (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 Whitbread PLC (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 Whitbread PLC (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 Whitbread PLC (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 Whitbread PLC (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 Sfp Whitbread needs to make to build a sustainable competitive advantage.
