Two sisters begin a bakery/cafe and have difficulties organizing the work and defining their roles. The case is written from the mother's perspective as she tries to figure out how to keep the business from falling apart.
Swot Analysis of "Sorelle Bakery and Cafe" written by Louis B. Barnes, Joanne Massaro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cafe Bakery facing as an external strategic factors. Some of the topics covered in Sorelle Bakery and Cafe case study are - Strategic Management Strategies, Conflict, Crisis management, Entrepreneurship, Gender, Joint ventures and Organizational Development.
Some of the macro environment factors that can be used to understand the Sorelle Bakery and Cafe casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing energy prices, cloud computing is disrupting traditional business models, increasing commodity prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Sorelle Bakery and Cafe
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sorelle Bakery and Cafe case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cafe Bakery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cafe Bakery 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 Sorelle Bakery and Cafe can be done for the following purposes –
1. Strategic planning using facts provided in Sorelle Bakery and Cafe case study
2. Improving business portfolio management of Cafe Bakery
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 Cafe Bakery
Strengths Sorelle Bakery and Cafe | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cafe Bakery in Sorelle Bakery and Cafe Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Cafe Bakery in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Cafe Bakery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cafe Bakery 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 Sorelle Bakery and Cafe 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.
Low bargaining power of suppliers
– Suppliers of Cafe Bakery in the sector have low bargaining power. Sorelle Bakery and Cafe has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cafe Bakery to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Cafe Bakery is one of the leading recruiters in the industry. Managers in the Sorelle Bakery and Cafe are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Cafe Bakery 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 Sorelle Bakery and Cafe HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Cafe Bakery 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 Cafe Bakery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sorelle Bakery and Cafe Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Cafe Bakery 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 Louis B. Barnes, Joanne Massaro 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.
Innovation driven organization
– Cafe Bakery is one of the most innovative firm in sector. Manager in Sorelle Bakery and Cafe Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Cafe Bakery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cafe Bakery 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.
High brand equity
– Cafe Bakery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cafe Bakery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Cafe Bakery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Sorelle Bakery and Cafe | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sorelle Bakery and Cafe are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sorelle Bakery and Cafe 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 Cafe Bakery has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sorelle Bakery and Cafe, is just above the industry average. Cafe Bakery 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.
High cash cycle compare to competitors
Cafe Bakery 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.
Products dominated business model
– Even though Cafe Bakery 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 - Sorelle Bakery and Cafe should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Cafe Bakery 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. Cafe Bakery even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cafe Bakery supply chain. Even after few cautionary changes mentioned in the HBR case study - Sorelle Bakery and Cafe, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cafe Bakery vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Cafe Bakery is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Cafe Bakery needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cafe Bakery to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sorelle Bakery and Cafe, it seems that the employees of Cafe Bakery 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cafe Bakery 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.
Lack of clear differentiation of Cafe Bakery products
– To increase the profitability and margins on the products, Cafe Bakery needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Louis B. Barnes, Joanne Massaro suggests that, Cafe Bakery 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.
Opportunities Sorelle Bakery and Cafe | 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 Sorelle Bakery and Cafe are -
Creating value in data economy
– The success of analytics program of Cafe Bakery has opened avenues for new revenue streams for the organization in the industry. This can help Cafe Bakery to build a more holistic ecosystem as suggested in the Sorelle Bakery and Cafe case study. Cafe Bakery can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Cafe Bakery in the consumer business. Now Cafe Bakery can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cafe Bakery 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
– Cafe Bakery 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.
Using analytics as competitive advantage
– Cafe Bakery 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 Sorelle Bakery and Cafe - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cafe Bakery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cafe Bakery is facing challenges because of the dominance of functional experts in the organization. Sorelle Bakery and Cafe 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.
Manufacturing automation
– Cafe Bakery 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cafe Bakery can use these opportunities to build new business models that can help the communities that Cafe Bakery operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Buying journey improvements
– Cafe Bakery can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sorelle Bakery and Cafe 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cafe Bakery 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cafe Bakery 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, Sorelle Bakery and Cafe, 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
– Cafe Bakery 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 Cafe Bakery 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.
Threats Sorelle Bakery and Cafe External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sorelle Bakery and Cafe are -
Technology acceleration in Forth Industrial Revolution
– Cafe Bakery has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Cafe Bakery needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Cafe Bakery 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sorelle Bakery and Cafe, Cafe Bakery 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 .
Increasing wage structure of Cafe Bakery
– 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 Cafe Bakery.
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. Cafe Bakery can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Cafe Bakery 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cafe Bakery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Cafe Bakery.
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 Cafe Bakery in the Organizational Development sector and impact the bottomline of the organization.
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. Cafe Bakery needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Environmental challenges
– Cafe Bakery 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. Cafe Bakery can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cafe Bakery 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 Sorelle Bakery and Cafe .
Weighted SWOT Analysis of Sorelle Bakery and Cafe 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 Sorelle Bakery and Cafe 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 Sorelle Bakery and Cafe 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 Sorelle Bakery and Cafe 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 Sorelle Bakery and Cafe 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 Cafe Bakery needs to make to build a sustainable competitive advantage.
