Swot Analysis of "Terry's Group: Designing Novelty Chocolates, Epilogue" written by John A. Quelch, Margaret Bruce includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Terry's Chocolates facing as an external strategic factors. Some of the topics covered in Terry's Group: Designing Novelty Chocolates, Epilogue case study are - Strategic Management Strategies, Market research, Pricing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Terry's Group: Designing Novelty Chocolates, Epilogue casestudy better are - – supply chains are disrupted by pandemic , wage bills are increasing, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Terry's Group: Designing Novelty Chocolates, Epilogue
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Terry's Group: Designing Novelty Chocolates, Epilogue case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Terry's Chocolates, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Terry's Chocolates 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 Terry's Group: Designing Novelty Chocolates, Epilogue can be done for the following purposes –
1. Strategic planning using facts provided in Terry's Group: Designing Novelty Chocolates, Epilogue case study
2. Improving business portfolio management of Terry's Chocolates
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 Terry's Chocolates
Strengths Terry's Group: Designing Novelty Chocolates, Epilogue | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Terry's Chocolates in Terry's Group: Designing Novelty Chocolates, Epilogue Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Terry's Chocolates in the sector have low bargaining power. Terry's Group: Designing Novelty Chocolates, Epilogue has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Terry's Chocolates to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Terry's Chocolates 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.
Superior customer experience
– The customer experience strategy of Terry's Chocolates in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Terry's Chocolates digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Terry's Chocolates 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.
Effective Research and Development (R&D)
– Terry's Chocolates has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Terry's Group: Designing Novelty Chocolates, Epilogue - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Terry's Chocolates 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 Terry's Chocolates is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Terry's Group: Designing Novelty Chocolates, Epilogue Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Terry's Chocolates 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 Terry's Group: Designing Novelty Chocolates, Epilogue HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Terry's Chocolates
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Terry's Chocolates does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Terry's Chocolates is one of the leading recruiters in the industry. Managers in the Terry's Group: Designing Novelty Chocolates, Epilogue are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Terry's Chocolates has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Terry's Group: Designing Novelty Chocolates, Epilogue 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.
Operational resilience
– The operational resilience strategy in the Terry's Group: Designing Novelty Chocolates, Epilogue 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.
Strong track record of project management
– Terry's Chocolates is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Terry's Group: Designing Novelty Chocolates, Epilogue | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Terry's Group: Designing Novelty Chocolates, Epilogue are -
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 Terry's Chocolates supply chain. Even after few cautionary changes mentioned in the HBR case study - Terry's Group: Designing Novelty Chocolates, Epilogue, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Terry's Chocolates vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Terry's Chocolates is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Terry's Chocolates needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Terry's Chocolates to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Terry's Group: Designing Novelty Chocolates, Epilogue, it seems that the employees of Terry's Chocolates 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Terry's Group: Designing Novelty Chocolates, Epilogue, is just above the industry average. Terry's Chocolates 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.
Lack of clear differentiation of Terry's Chocolates products
– To increase the profitability and margins on the products, Terry's Chocolates needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Terry's Chocolates has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Terry's Chocolates, firm in the HBR case study Terry's Group: Designing Novelty Chocolates, Epilogue needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Terry's Chocolates is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Terry's Group: Designing Novelty Chocolates, Epilogue can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Terry's Chocolates 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.
No frontier risks strategy
– After analyzing the HBR case study Terry's Group: Designing Novelty Chocolates, Epilogue, 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Terry's Group: Designing Novelty Chocolates, Epilogue 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 Terry's Chocolates has relatively successful track record of launching new products.
Opportunities Terry's Group: Designing Novelty Chocolates, Epilogue | 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 Terry's Group: Designing Novelty Chocolates, Epilogue are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Terry's Chocolates 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.
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 Terry's Chocolates 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.
Building a culture of innovation
– managers at Terry's Chocolates 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Terry's Chocolates 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.
Developing new processes and practices
– Terry's Chocolates 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.
Learning at scale
– Online learning technologies has now opened space for Terry's Chocolates 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.
Loyalty marketing
– Terry's Chocolates 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.
Manufacturing automation
– Terry's Chocolates 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Terry's Chocolates can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Terry's Chocolates can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Terry's Group: Designing Novelty Chocolates, Epilogue 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.
Leveraging digital technologies
– Terry's Chocolates can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Terry's Chocolates is facing challenges because of the dominance of functional experts in the organization. Terry's Group: Designing Novelty Chocolates, Epilogue 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Terry's Chocolates 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 Terry's Chocolates to hire the very best people irrespective of their geographical location.
Threats Terry's Group: Designing Novelty Chocolates, Epilogue External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Terry's Group: Designing Novelty Chocolates, Epilogue are -
Environmental challenges
– Terry's Chocolates 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. Terry's Chocolates can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Terry's Chocolates.
Regulatory challenges
– Terry's Chocolates 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Terry's Group: Designing Novelty Chocolates, Epilogue, Terry's Chocolates 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 acceleration in Forth Industrial Revolution
– Terry's Chocolates has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Terry's Chocolates 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.
High dependence on third party suppliers
– Terry's Chocolates 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Terry's Chocolates with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Terry's Chocolates 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Terry's Chocolates 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 Terry's Chocolates business can come under increasing regulations regarding data privacy, data security, etc.
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.
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. Terry's Chocolates can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Terry's Chocolates 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 Terry's Group: Designing Novelty Chocolates, Epilogue .
Weighted SWOT Analysis of Terry's Group: Designing Novelty Chocolates, Epilogue 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 Terry's Group: Designing Novelty Chocolates, Epilogue 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 Terry's Group: Designing Novelty Chocolates, Epilogue 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 Terry's Group: Designing Novelty Chocolates, Epilogue 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 Terry's Group: Designing Novelty Chocolates, Epilogue 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 Terry's Chocolates needs to make to build a sustainable competitive advantage.
