The Silk Soymilk brand evolves from a single homemade product to a regional then national brand, facing challenges such as investment influx, acquisition, and competition from new entrants into the market it created. Silk's marketing angles at various growth stages are discussed, and students consider whether the company should expand its presence or develop new categories and how its efforts could best realize growth targets. Which option carries the biggest risks, and which would best enhance its position as a market leader?
Authors :: Paul W. Farris, Michael Wasden, Ervin R. Shames
Swot Analysis of "Silk Soy Milk (A)" written by Paul W. Farris, Michael Wasden, Ervin R. Shames includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Silk Silk's facing as an external strategic factors. Some of the topics covered in Silk Soy Milk (A) case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Silk Soy Milk (A) casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, wage bills are increasing, supply chains are disrupted by pandemic , increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Silk Soy Milk (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Silk Soy Milk (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Silk Silk's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Silk Silk's 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 Silk Soy Milk (A) can be done for the following purposes –
1. Strategic planning using facts provided in Silk Soy Milk (A) case study
2. Improving business portfolio management of Silk Silk's
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 Silk Silk's
Strengths Silk Soy Milk (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Silk Silk's in Silk Soy Milk (A) Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Silk Soy Milk (A) firm has clearly differentiated products in the market place. This has enabled Silk Silk's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Silk Silk's to invest into research and development (R&D) and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Silk Silk's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Silk Silk's 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.
Strong track record of project management
– Silk Silk's 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
– Silk Silk's 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 Silk Soy Milk (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Silk Silk's is one of the most innovative firm in sector. Manager in Silk Soy Milk (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Silk Silk's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Silk Silk's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Silk Silk's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Silk Silk's in the sector have low bargaining power. Silk Soy Milk (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Silk Silk's to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Silk Silk's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Silk Silk's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Silk Silk's 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 Silk Silk's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Silk Soy Milk (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Silk Silk's 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.
Analytics focus
– Silk Silk's 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 Paul W. Farris, Michael Wasden, Ervin R. Shames 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.
Weaknesses Silk Soy Milk (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Silk Soy Milk (A) are -
Increasing silos among functional specialists
– The organizational structure of Silk Silk's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Silk Silk's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Silk Silk's to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Silk Silk's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Silk Soy Milk (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Silk Soy Milk (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Silk Silk's has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Silk Silk's 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 operating costs
– Compare to the competitors, firm in the HBR case study Silk Soy Milk (A) 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 Silk Silk's 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Silk Soy Milk (A), 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Silk Soy Milk (A), in the dynamic environment Silk Silk's has struggled to respond to the nimble upstart competition. Silk Silk's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Silk Soy Milk (A) HBR case study mentions - Silk Silk's 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.
Products dominated business model
– Even though Silk Silk's 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 - Silk Soy Milk (A) should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Silk Silk's products
– To increase the profitability and margins on the products, Silk Silk's needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Silk Silk's supply chain. Even after few cautionary changes mentioned in the HBR case study - Silk Soy Milk (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Silk Silk's vulnerable to further global disruptions in South East Asia.
Opportunities Silk Soy Milk (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Silk Soy Milk (A) are -
Building a culture of innovation
– managers at Silk Silk's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
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. Silk Silk's 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
– Silk Silk's 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 Silk Soy Milk (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Silk Silk's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Silk Silk's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Silk Silk's 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 Silk Silk's to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Silk Silk's 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, Silk Silk's is facing challenges because of the dominance of functional experts in the organization. Silk Soy Milk (A) 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.
Learning at scale
– Online learning technologies has now opened space for Silk Silk's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Silk Silk's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Silk Silk's has opened avenues for new revenue streams for the organization in the industry. This can help Silk Silk's to build a more holistic ecosystem as suggested in the Silk Soy Milk (A) case study. Silk Silk's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Silk Silk's can use these opportunities to build new business models that can help the communities that Silk Silk's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Silk Silk's to increase its market reach. Silk Silk's 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.
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 Silk Silk's in the consumer business. Now Silk Silk's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Silk Soy Milk (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Silk Soy Milk (A) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Silk Silk's 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.
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 Silk Silk's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Silk Silk's
– 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 Silk Silk's.
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. Silk Silk's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Silk Soy Milk (A), Silk Silk's 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 .
Regulatory challenges
– Silk Silk's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Silk Silk's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Silk Silk's 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 Silk Soy Milk (A) .
High dependence on third party suppliers
– Silk Silk's 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.
Technology acceleration in Forth Industrial Revolution
– Silk Silk's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Silk Silk's 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.
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. Silk Silk's 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.
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.
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 Silk Silk's in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Silk Soy Milk (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Silk Soy Milk (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Silk Soy Milk (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Silk Soy Milk (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Silk Soy Milk (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Silk Silk's needs to make to build a sustainable competitive advantage.