Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?
Chairman and CEO M. Douglas Ivester stumbles when he tells a Brazilian newsmagazine about a new Coke vending machine that can automatically raise prices in hot weather. Reaction around the world is swift and negative.
Swot Analysis of "Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?" written by Charles King, Das Narayandas includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vending Machine facing as an external strategic factors. Some of the topics covered in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? case study are - Strategic Management Strategies, Globalization, Pricing, Product development, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, wage bills are increasing, there is backlash against globalization,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vending Machine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vending Machine 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? can be done for the following purposes –
1. Strategic planning using facts provided in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? case study
2. Improving business portfolio management of Vending Machine
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 Vending Machine
Strengths Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vending Machine in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? Harvard Business Review case study are -
Ability to recruit top talent
– Vending Machine is one of the leading recruiters in the industry. Managers in the Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Vending Machine in the sector have low bargaining power. Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vending Machine to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Vending Machine 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 Vending Machine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Vending Machine has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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.
High brand equity
– Vending Machine has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vending Machine to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Vending Machine has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vending Machine 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.
Highly skilled collaborators
– Vending Machine 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Vending Machine is present in almost all the verticals within the industry. This has provided firm in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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.
Analytics focus
– Vending Machine 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 Charles King, Das Narayandas 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
– Vending Machine is one of the most innovative firm in sector. Manager in Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Vending Machine
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vending Machine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Vending Machine 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.
Weaknesses Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? are -
No frontier risks strategy
– After analyzing the HBR case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?, 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?, is just above the industry average. Vending Machine 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 bargaining power of channel partners
– Because of the regulatory requirements, Charles King, Das Narayandas suggests that, Vending Machine 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?, it seems that the employees of Vending Machine 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.
Lack of clear differentiation of Vending Machine products
– To increase the profitability and margins on the products, Vending Machine needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Vending Machine, firm in the HBR case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Vending Machine 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vending Machine is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?, in the dynamic environment Vending Machine has struggled to respond to the nimble upstart competition. Vending Machine has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Vending Machine is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Vending Machine needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vending Machine to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? can leverage the sales team experience to cultivate customer relationships as Vending Machine is planning to shift buying processes online.
Opportunities Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? | 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vending Machine to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Vending Machine to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Vending Machine to increase its market reach. Vending Machine 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.
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. Vending Machine can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Vending Machine 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vending Machine to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Vending Machine 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vending Machine can use these opportunities to build new business models that can help the communities that Vending Machine operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Creating value in data economy
– The success of analytics program of Vending Machine has opened avenues for new revenue streams for the organization in the industry. This can help Vending Machine to build a more holistic ecosystem as suggested in the Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? case study. Vending Machine 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 Vending Machine in the consumer business. Now Vending Machine can target international markets with far fewer capital restrictions requirements than the existing system.
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. Vending Machine 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. Vending Machine 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.
Loyalty marketing
– Vending Machine 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, Vending Machine 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vending Machine 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, Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Vending Machine can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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.
Threats Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? are -
Stagnating economy with rate increase
– Vending Machine 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not?, Vending Machine may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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. Vending Machine 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.
Increasing wage structure of Vending Machine
– 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 Vending Machine.
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. Vending Machine can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Vending Machine is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Vending Machine.
High dependence on third party suppliers
– Vending Machine 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.
Environmental challenges
– Vending Machine 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. Vending Machine can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vending Machine with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Vending Machine in the Sales & Marketing sector and impact the bottomline of the organization.
Regulatory challenges
– Vending Machine 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.
Weighted SWOT Analysis of Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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 Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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 Vending Machine needs to make to build a sustainable competitive advantage.
