Stella Artois in the U.K. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Stella Artois in the U.K.
Stella Artois, Interbrew company's flagship brand of beer, has experienced phenomenal success on the international market. The United Kingdom market has played a critical role in that success, and Interbrew needs to assess the reasons for this. Interbrew's managing director and chief marketing officer are meeting to have a discussion about how to proceed in developing the Stella Artois brand. First, they need to understand what part of the company's success was due to expert marketing practices and what part might possibly be due to being in the right place at the right time. They also want to assess what possible steps might be taken to spread these practices across the corporation for use in the company's global marketing strategy.
Swot Analysis of "Stella Artois in the U.K." written by Paul W. Beamish, Anthony Goerzen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Artois Stella facing as an external strategic factors. Some of the topics covered in Stella Artois in the U.K. case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Stella Artois in the U.K. casestudy better are - – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Stella Artois in the U.K.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stella Artois in the U.K. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Artois Stella, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Artois Stella 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 Stella Artois in the U.K. can be done for the following purposes –
1. Strategic planning using facts provided in Stella Artois in the U.K. case study
2. Improving business portfolio management of Artois Stella
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 Artois Stella
Strengths Stella Artois in the U.K. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Artois Stella in Stella Artois in the U.K. Harvard Business Review case study are -
Learning organization
- Artois Stella 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 Artois Stella is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stella Artois in the U.K. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Artois Stella in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Stella Artois in the U.K. 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.
Successful track record of launching new products
– Artois Stella has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Artois Stella 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 Artois Stella digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Artois Stella 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
– Stella Artois in the U.K. firm has clearly differentiated products in the market place. This has enabled Artois Stella to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Artois Stella to invest into research and development (R&D) and innovation.
Ability to lead change in Sales & Marketing field
– Artois Stella 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 Artois Stella in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Artois Stella 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.
Innovation driven organization
– Artois Stella is one of the most innovative firm in sector. Manager in Stella Artois in the U.K. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Artois Stella in the sector have low bargaining power. Stella Artois in the U.K. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Artois Stella to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Artois Stella 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
– Artois Stella 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 Stella Artois in the U.K. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Stella Artois in the U.K. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stella Artois in the U.K. are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Stella Artois in the U.K. 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 Artois Stella has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Artois Stella is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Stella Artois in the U.K. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Artois Stella 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.
Slow to strategic competitive environment developments
– As Stella Artois in the U.K. HBR case study mentions - Artois Stella 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.
Aligning sales with marketing
– It come across in the case study Stella Artois in the U.K. 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 Stella Artois in the U.K. can leverage the sales team experience to cultivate customer relationships as Artois Stella is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Artois Stella, firm in the HBR case study Stella Artois in the U.K. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Artois Stella 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.
Capital Spending Reduction
– Even during the low interest decade, Artois Stella 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.
Lack of clear differentiation of Artois Stella products
– To increase the profitability and margins on the products, Artois Stella needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Artois Stella 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 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 Artois Stella supply chain. Even after few cautionary changes mentioned in the HBR case study - Stella Artois in the U.K., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Artois Stella vulnerable to further global disruptions in South East Asia.
Opportunities Stella Artois in the U.K. | 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 Stella Artois in the U.K. are -
Using analytics as competitive advantage
– Artois Stella 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 Stella Artois in the U.K. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Artois Stella to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Artois Stella can use these opportunities to build new business models that can help the communities that Artois Stella operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Artois Stella can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Artois Stella is facing challenges because of the dominance of functional experts in the organization. Stella Artois in the U.K. 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.
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 Artois Stella 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.
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 Artois Stella in the consumer business. Now Artois Stella can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Artois Stella 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Artois Stella 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.
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. Artois Stella can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Artois Stella 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.
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. Artois Stella can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Artois Stella 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Artois Stella 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 Artois Stella to hire the very best people irrespective of their geographical location.
Threats Stella Artois in the U.K. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Stella Artois in the U.K. are -
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 Artois Stella.
Environmental challenges
– Artois Stella 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. Artois Stella can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Artois Stella business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Artois Stella 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.
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. Artois Stella needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Artois Stella
– 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 Artois Stella.
Regulatory challenges
– Artois Stella 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.
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 Artois Stella 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. Artois Stella 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Stella Artois in the U.K., Artois Stella 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 .
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.
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.
High dependence on third party suppliers
– Artois Stella 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.
Weighted SWOT Analysis of Stella Artois in the U.K. 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 Stella Artois in the U.K. 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 Stella Artois in the U.K. 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 Stella Artois in the U.K. 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 Stella Artois in the U.K. 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 Artois Stella needs to make to build a sustainable competitive advantage.