Grupo Bimbo: Growth and Social Responsibility SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Grupo Bimbo: Growth and Social Responsibility
To maximize their effectiveness, color cases should be printed in color.Bimbo, headquartered in Mexico with 2008 sales of $7 billion, was one of the largest bakery companies in the world. Even as it had grown spectacularly in the last several decades, the company had earned a stellar reputation for its Corporate Social Responsibility. As the company set its sights on international expansion, its third generation CFO, Daniel Servitje, wondered how to keep its growth and CSR objectives neatly aligned.
Authors :: V. Kasturi Rangan, Regina Garcia-Cuellar
Topics :: Sales & Marketing
Tags :: Marketing, Organizational culture, Public relations, Sales, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Grupo Bimbo: Growth and Social Responsibility" written by V. Kasturi Rangan, Regina Garcia-Cuellar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Color.bimbo Servitje facing as an external strategic factors. Some of the topics covered in Grupo Bimbo: Growth and Social Responsibility case study are - Strategic Management Strategies, Marketing, Organizational culture, Public relations, Sales, Social responsibility and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Grupo Bimbo: Growth and Social Responsibility casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Grupo Bimbo: Growth and Social Responsibility
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grupo Bimbo: Growth and Social Responsibility case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Color.bimbo Servitje, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Color.bimbo Servitje 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 Grupo Bimbo: Growth and Social Responsibility can be done for the following purposes –
1. Strategic planning using facts provided in Grupo Bimbo: Growth and Social Responsibility case study
2. Improving business portfolio management of Color.bimbo Servitje
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 Color.bimbo Servitje
Strengths Grupo Bimbo: Growth and Social Responsibility | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Color.bimbo Servitje in Grupo Bimbo: Growth and Social Responsibility Harvard Business Review case study are -
Highly skilled collaborators
– Color.bimbo Servitje 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 Grupo Bimbo: Growth and Social Responsibility HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Color.bimbo Servitje are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Color.bimbo Servitje 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 Grupo Bimbo: Growth and Social Responsibility - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Color.bimbo Servitje 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 V. Kasturi Rangan, Regina Garcia-Cuellar 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 recruit top talent
– Color.bimbo Servitje is one of the leading recruiters in the industry. Managers in the Grupo Bimbo: Growth and Social Responsibility 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
– Color.bimbo Servitje is present in almost all the verticals within the industry. This has provided firm in Grupo Bimbo: Growth and Social Responsibility 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 Sales & Marketing segment
- digital transformation varies from industry to industry. For Color.bimbo Servitje digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Color.bimbo Servitje 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.
Low bargaining power of suppliers
– Suppliers of Color.bimbo Servitje in the sector have low bargaining power. Grupo Bimbo: Growth and Social Responsibility has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Color.bimbo Servitje to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– Grupo Bimbo: Growth and Social Responsibility firm has clearly differentiated products in the market place. This has enabled Color.bimbo Servitje to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Color.bimbo Servitje to invest into research and development (R&D) and innovation.
Strong track record of project management
– Color.bimbo Servitje is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Grupo Bimbo: Growth and Social Responsibility 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.
Ability to lead change in Sales & Marketing field
– Color.bimbo Servitje 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 Color.bimbo Servitje in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Grupo Bimbo: Growth and Social Responsibility | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grupo Bimbo: Growth and Social Responsibility are -
Workers concerns about automation
– As automation is fast increasing in the segment, Color.bimbo Servitje 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Grupo Bimbo: Growth and Social Responsibility, it seems that the employees of Color.bimbo Servitje 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Grupo Bimbo: Growth and Social Responsibility, in the dynamic environment Color.bimbo Servitje has struggled to respond to the nimble upstart competition. Color.bimbo Servitje has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Color.bimbo Servitje 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 - Grupo Bimbo: Growth and Social Responsibility should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Color.bimbo Servitje 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Grupo Bimbo: Growth and Social Responsibility has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Color.bimbo Servitje 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Grupo Bimbo: Growth and Social Responsibility, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Grupo Bimbo: Growth and Social Responsibility, is just above the industry average. Color.bimbo Servitje 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.
Low market penetration in new markets
– Outside its home market of Color.bimbo Servitje, firm in the HBR case study Grupo Bimbo: Growth and Social Responsibility needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Color.bimbo Servitje 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 bargaining power of channel partners
– Because of the regulatory requirements, V. Kasturi Rangan, Regina Garcia-Cuellar suggests that, Color.bimbo Servitje 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 Grupo Bimbo: Growth and Social Responsibility | 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 Grupo Bimbo: Growth and Social Responsibility are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Color.bimbo Servitje is facing challenges because of the dominance of functional experts in the organization. Grupo Bimbo: Growth and Social Responsibility 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Color.bimbo Servitje 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, Grupo Bimbo: Growth and Social Responsibility, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Color.bimbo Servitje to increase its market reach. Color.bimbo Servitje 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.
Learning at scale
– Online learning technologies has now opened space for Color.bimbo Servitje 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Color.bimbo Servitje in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Manufacturing automation
– Color.bimbo Servitje 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Color.bimbo Servitje 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Color.bimbo Servitje can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Color.bimbo Servitje can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Color.bimbo Servitje can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Color.bimbo Servitje can use these opportunities to build new business models that can help the communities that Color.bimbo Servitje operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Developing new processes and practices
– Color.bimbo Servitje 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.
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. Color.bimbo Servitje can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Color.bimbo Servitje 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 Grupo Bimbo: Growth and Social Responsibility External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grupo Bimbo: Growth and Social Responsibility are -
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.
Technology acceleration in Forth Industrial Revolution
– Color.bimbo Servitje has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Color.bimbo Servitje needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Color.bimbo Servitje 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 Sales & Marketing industry regulations.
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 Color.bimbo Servitje business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Color.bimbo Servitje is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Color.bimbo Servitje in the Sales & Marketing sector and impact the bottomline of the organization.
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. Color.bimbo Servitje 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.
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. Color.bimbo Servitje needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Color.bimbo Servitje 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.
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.
Stagnating economy with rate increase
– Color.bimbo Servitje 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.
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 Color.bimbo Servitje.
Increasing wage structure of Color.bimbo Servitje
– 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 Color.bimbo Servitje.
Weighted SWOT Analysis of Grupo Bimbo: Growth and Social Responsibility 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 Grupo Bimbo: Growth and Social Responsibility 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 Grupo Bimbo: Growth and Social Responsibility 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 Grupo Bimbo: Growth and Social Responsibility 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 Grupo Bimbo: Growth and Social Responsibility 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 Color.bimbo Servitje needs to make to build a sustainable competitive advantage.
