Case Study Description of H.J. Heinz Co.: Plastic Bottle Ketchup (B)
The Heinz Ketchup product manager discovers she does not have sufficient finished inventory and production capacity to meet trade demand for a new plastic bottle ketchup. Alternatives include cancelling promotion events and putting the trade on allocation.
Swot Analysis of "H.J. Heinz Co.: Plastic Bottle Ketchup (B)" written by John A. Quelch, John L. Teopaco includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ketchup Heinz facing as an external strategic factors. Some of the topics covered in H.J. Heinz Co.: Plastic Bottle Ketchup (B) case study are - Strategic Management Strategies, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the H.J. Heinz Co.: Plastic Bottle Ketchup (B) casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing energy prices, geopolitical disruptions, increasing commodity prices, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, there is backlash against globalization, etc
Introduction to SWOT Analysis of H.J. Heinz Co.: Plastic Bottle Ketchup (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in H.J. Heinz Co.: Plastic Bottle Ketchup (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ketchup Heinz, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ketchup Heinz 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 H.J. Heinz Co.: Plastic Bottle Ketchup (B) can be done for the following purposes –
1. Strategic planning using facts provided in H.J. Heinz Co.: Plastic Bottle Ketchup (B) case study
2. Improving business portfolio management of Ketchup Heinz
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 Ketchup Heinz
Strengths H.J. Heinz Co.: Plastic Bottle Ketchup (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ketchup Heinz in H.J. Heinz Co.: Plastic Bottle Ketchup (B) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the H.J. Heinz Co.: Plastic Bottle Ketchup (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Ketchup Heinz in the sector have low bargaining power. H.J. Heinz Co.: Plastic Bottle Ketchup (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ketchup Heinz to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Ketchup Heinz digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ketchup Heinz 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.
Superior customer experience
– The customer experience strategy of Ketchup Heinz in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Ketchup Heinz is one of the most innovative firm in sector. Manager in H.J. Heinz Co.: Plastic Bottle Ketchup (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Ketchup Heinz is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Ketchup Heinz 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 John A. Quelch, John L. Teopaco 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.
Cross disciplinary teams
– Horizontal connected teams at the Ketchup Heinz 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.
High brand equity
– Ketchup Heinz has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ketchup Heinz to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Ketchup Heinz has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in H.J. Heinz Co.: Plastic Bottle Ketchup (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Ketchup Heinz 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 Ketchup Heinz is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in H.J. Heinz Co.: Plastic Bottle Ketchup (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Ketchup Heinz is one of the leading recruiters in the industry. Managers in the H.J. Heinz Co.: Plastic Bottle Ketchup (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses H.J. Heinz Co.: Plastic Bottle Ketchup (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of H.J. Heinz Co.: Plastic Bottle Ketchup (B) are -
Products dominated business model
– Even though Ketchup Heinz 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 - H.J. Heinz Co.: Plastic Bottle Ketchup (B) should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study H.J. Heinz Co.: Plastic Bottle Ketchup (B), in the dynamic environment Ketchup Heinz has struggled to respond to the nimble upstart competition. Ketchup Heinz 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 Ketchup Heinz is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Ketchup Heinz needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ketchup Heinz to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Ketchup Heinz 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 H.J. Heinz Co.: Plastic Bottle Ketchup (B) HBR case study mentions - Ketchup Heinz 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.
Low market penetration in new markets
– Outside its home market of Ketchup Heinz, firm in the HBR case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study H.J. Heinz Co.: Plastic Bottle Ketchup (B), 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, John L. Teopaco suggests that, Ketchup Heinz 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ketchup Heinz 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ketchup Heinz is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) 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 operating costs
– Compare to the competitors, firm in the HBR case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) 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 Ketchup Heinz 's lucrative customers.
Opportunities H.J. Heinz Co.: Plastic Bottle Ketchup (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) are -
Learning at scale
– Online learning technologies has now opened space for Ketchup Heinz 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.
Manufacturing automation
– Ketchup Heinz 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.
Building a culture of innovation
– managers at Ketchup Heinz 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.
Developing new processes and practices
– Ketchup Heinz 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.
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. Ketchup Heinz 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. Ketchup Heinz 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ketchup Heinz 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, H.J. Heinz Co.: Plastic Bottle Ketchup (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ketchup Heinz is facing challenges because of the dominance of functional experts in the organization. H.J. Heinz Co.: Plastic Bottle Ketchup (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Ketchup Heinz in the consumer business. Now Ketchup Heinz can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ketchup Heinz 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 Ketchup Heinz to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Ketchup Heinz can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. H.J. Heinz Co.: Plastic Bottle Ketchup (B) 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.
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. Ketchup Heinz can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Ketchup Heinz to increase its market reach. Ketchup Heinz 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ketchup Heinz 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.
Threats H.J. Heinz Co.: Plastic Bottle Ketchup (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) are -
High dependence on third party suppliers
– Ketchup Heinz 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ketchup Heinz 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.
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. Ketchup Heinz can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Ketchup Heinz 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.
Regulatory challenges
– Ketchup Heinz 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ketchup Heinz 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 H.J. Heinz Co.: Plastic Bottle Ketchup (B) .
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.
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. Ketchup Heinz needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Ketchup Heinz business can come under increasing regulations regarding data privacy, data security, 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 Ketchup Heinz.
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. Ketchup Heinz 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.
Consumer confidence and its impact on Ketchup Heinz demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ketchup Heinz in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of H.J. Heinz Co.: Plastic Bottle Ketchup (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study H.J. Heinz Co.: Plastic Bottle Ketchup (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of H.J. Heinz Co.: Plastic Bottle Ketchup (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ketchup Heinz needs to make to build a sustainable competitive advantage.
