Case Study Description of Eastern Condiments Private Limited (B)
Eastern Condiments is a three-part case focused on the challenge of distributing spices in Southern India from 2008-2012. Case (A) describes the strategy and tactics that enabled Eastern Condiments to swiftly dominate the local market in Kerala by 2008, yet had poor results in the adjoining state of Karnataka in 2009-2012. Case (B) describes the new strategy to revive business in Karnataka and its consequences. When the market in Kerala starts to stagnate, it also has to revise strategy in its home market. Please copy and paste the following url into a browser http://cases.insead.edu/eastern-condiments/ to access additional teaching material and an introductory video.
Swot Analysis of "Eastern Condiments Private Limited (B)" written by V. Padmanabhan, Indira Pant includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Condiments Eastern facing as an external strategic factors. Some of the topics covered in Eastern Condiments Private Limited (B) case study are - Strategic Management Strategies, Marketing, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Eastern Condiments Private Limited (B) casestudy better are - – central banks are concerned over increasing inflation, there is backlash against globalization, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Eastern Condiments Private Limited (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eastern Condiments Private Limited (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Condiments Eastern, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Condiments Eastern 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 Eastern Condiments Private Limited (B) can be done for the following purposes –
1. Strategic planning using facts provided in Eastern Condiments Private Limited (B) case study
2. Improving business portfolio management of Condiments Eastern
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Condiments Eastern
Strengths Eastern Condiments Private Limited (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Condiments Eastern in Eastern Condiments Private Limited (B) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Eastern Condiments Private Limited (B) 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.
Effective Research and Development (R&D)
– Condiments Eastern 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 Eastern Condiments Private Limited (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Sales & Marketing field
– Condiments Eastern 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 Condiments Eastern in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Condiments Eastern has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Condiments Eastern 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Condiments Eastern digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Condiments Eastern has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Eastern Condiments Private Limited (B) firm has clearly differentiated products in the market place. This has enabled Condiments Eastern to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Condiments Eastern to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Condiments Eastern is one of the leading recruiters in the industry. Managers in the Eastern Condiments Private Limited (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Condiments Eastern is present in almost all the verticals within the industry. This has provided firm in Eastern Condiments Private Limited (B) 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.
Learning organization
- Condiments Eastern 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 Condiments Eastern is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eastern Condiments Private Limited (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Condiments Eastern is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Condiments Eastern 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 Eastern Condiments Private Limited (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Condiments Eastern has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eastern Condiments Private Limited (B) 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.
Weaknesses Eastern Condiments Private Limited (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eastern Condiments Private Limited (B) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eastern Condiments Private Limited (B), it seems that the employees of Condiments Eastern 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.
Slow to strategic competitive environment developments
– As Eastern Condiments Private Limited (B) HBR case study mentions - Condiments Eastern 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.
High cash cycle compare to competitors
Condiments Eastern 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.
Lack of clear differentiation of Condiments Eastern products
– To increase the profitability and margins on the products, Condiments Eastern needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Condiments Eastern 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. Condiments Eastern 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 star products
– The top 2 products and services of the firm as mentioned in the Eastern Condiments Private Limited (B) 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 Condiments Eastern has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Condiments Eastern 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 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 Condiments Eastern supply chain. Even after few cautionary changes mentioned in the HBR case study - Eastern Condiments Private Limited (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Condiments Eastern vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Condiments Eastern 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.
Products dominated business model
– Even though Condiments Eastern 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 - Eastern Condiments Private Limited (B) should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Condiments Eastern 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.
Opportunities Eastern Condiments Private Limited (B) | 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 Eastern Condiments Private Limited (B) are -
Learning at scale
– Online learning technologies has now opened space for Condiments Eastern 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.
Creating value in data economy
– The success of analytics program of Condiments Eastern has opened avenues for new revenue streams for the organization in the industry. This can help Condiments Eastern to build a more holistic ecosystem as suggested in the Eastern Condiments Private Limited (B) case study. Condiments Eastern can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Condiments Eastern can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Condiments Eastern can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Condiments Eastern can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Condiments Eastern can use these opportunities to build new business models that can help the communities that Condiments Eastern operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Loyalty marketing
– Condiments Eastern 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Condiments Eastern 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 Condiments Eastern to increase its market reach. Condiments Eastern 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, Condiments Eastern 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, Eastern Condiments Private Limited (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Condiments Eastern can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Condiments Eastern can develop new processes and procedures in Sales & Marketing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Condiments Eastern is facing challenges because of the dominance of functional experts in the organization. Eastern Condiments Private Limited (B) 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.
Threats Eastern Condiments Private Limited (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eastern Condiments Private Limited (B) are -
Increasing wage structure of Condiments Eastern
– 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 Condiments Eastern.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Condiments Eastern in the Sales & Marketing industry. The Sales & Marketing 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.
Consumer confidence and its impact on Condiments Eastern 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.
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 Condiments Eastern in the Sales & Marketing sector and impact the bottomline of the organization.
Environmental challenges
– Condiments Eastern 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. Condiments Eastern can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High dependence on third party suppliers
– Condiments Eastern 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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Condiments Eastern will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Condiments Eastern business can come under increasing regulations regarding data privacy, data security, 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.
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 Condiments Eastern.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Condiments Eastern with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Condiments Eastern can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Eastern Condiments Private Limited (B) 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 Eastern Condiments Private Limited (B) 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 Eastern Condiments Private Limited (B) 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 Eastern Condiments Private Limited (B) 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 Eastern Condiments Private Limited (B) 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 Condiments Eastern needs to make to build a sustainable competitive advantage.