Case Study Description of Yellow Tail Wines: Breakaway Product Positioning
In 2001, the Yellow Tail brand of wines, launched in partnership with Australia's Casella Wines, achieved considerable success in the US market, despite intense competition from Californian, Italian, and Chilean wines. However, although Yellow Tail's first years were marked by exceptional growth-early batches sold out so quickly that extra bottles had to be shipped by plane-sales began to slow by the decade's end. Should Yellow Tail change its strategy? And should it consider investing in other products, or even product categories? In this case, students analyze how a brand like Yellow Tail can regain its momentum.
Swot Analysis of "Yellow Tail Wines: Breakaway Product Positioning" written by Len Sherman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yellow Tail facing as an external strategic factors. Some of the topics covered in Yellow Tail Wines: Breakaway Product Positioning case study are - Strategic Management Strategies, Competition, Competitive strategy, Research & development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Yellow Tail Wines: Breakaway Product Positioning casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
increasing energy prices, increasing commodity prices, etc
Introduction to SWOT Analysis of Yellow Tail Wines: Breakaway Product Positioning
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yellow Tail Wines: Breakaway Product Positioning case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yellow Tail, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yellow Tail 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 Yellow Tail Wines: Breakaway Product Positioning can be done for the following purposes –
1. Strategic planning using facts provided in Yellow Tail Wines: Breakaway Product Positioning case study
2. Improving business portfolio management of Yellow Tail
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 Yellow Tail
Strengths Yellow Tail Wines: Breakaway Product Positioning | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yellow Tail in Yellow Tail Wines: Breakaway Product Positioning Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Yellow Tail digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yellow Tail 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.
Innovation driven organization
– Yellow Tail is one of the most innovative firm in sector. Manager in Yellow Tail Wines: Breakaway Product Positioning Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Yellow Tail in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Yellow Tail 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
– Yellow Tail 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 Yellow Tail Wines: Breakaway Product Positioning HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Yellow Tail in the sector have low bargaining power. Yellow Tail Wines: Breakaway Product Positioning has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yellow Tail to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Yellow Tail 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 Yellow Tail Wines: Breakaway Product Positioning - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Yellow Tail 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.
Ability to lead change in Sales & Marketing field
– Yellow Tail 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 Yellow Tail in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Yellow Tail has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Yellow Tail Wines: Breakaway Product Positioning 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.
Ability to recruit top talent
– Yellow Tail is one of the leading recruiters in the industry. Managers in the Yellow Tail Wines: Breakaway Product Positioning are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Yellow Tail
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yellow Tail does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Yellow Tail Wines: Breakaway Product Positioning | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yellow Tail Wines: Breakaway Product Positioning are -
No frontier risks strategy
– After analyzing the HBR case study Yellow Tail Wines: Breakaway Product Positioning, 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.
Products dominated business model
– Even though Yellow Tail 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 - Yellow Tail Wines: Breakaway Product Positioning should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Yellow Tail Wines: Breakaway Product Positioning HBR case study mentions - Yellow Tail 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.
Skills based hiring
– The stress on hiring functional specialists at Yellow Tail 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.
Lack of clear differentiation of Yellow Tail products
– To increase the profitability and margins on the products, Yellow Tail needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Yellow Tail Wines: Breakaway Product Positioning, is just above the industry average. Yellow Tail 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.
Slow decision making process
– As mentioned earlier in the report, Yellow Tail has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Yellow Tail even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Yellow Tail, firm in the HBR case study Yellow Tail Wines: Breakaway Product Positioning needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Yellow Tail 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.
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 Yellow Tail supply chain. Even after few cautionary changes mentioned in the HBR case study - Yellow Tail Wines: Breakaway Product Positioning, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yellow Tail vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Yellow Tail Wines: Breakaway Product Positioning, in the dynamic environment Yellow Tail has struggled to respond to the nimble upstart competition. Yellow Tail has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Yellow Tail Wines: Breakaway Product Positioning | 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 Yellow Tail Wines: Breakaway Product Positioning are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yellow Tail can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Yellow Tail in the consumer business. Now Yellow Tail can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Yellow Tail to increase its market reach. Yellow Tail 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.
Buying journey improvements
– Yellow Tail can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Yellow Tail Wines: Breakaway Product Positioning 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yellow Tail can use these opportunities to build new business models that can help the communities that Yellow Tail operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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. Yellow Tail 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. Yellow Tail 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.
Using analytics as competitive advantage
– Yellow Tail 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 Yellow Tail Wines: Breakaway Product Positioning - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yellow Tail to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yellow Tail 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 Yellow Tail to hire the very best people irrespective of their geographical location.
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. Yellow Tail can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Yellow Tail 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.
Creating value in data economy
– The success of analytics program of Yellow Tail has opened avenues for new revenue streams for the organization in the industry. This can help Yellow Tail to build a more holistic ecosystem as suggested in the Yellow Tail Wines: Breakaway Product Positioning case study. Yellow Tail can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yellow Tail 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.
Manufacturing automation
– Yellow Tail 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.
Threats Yellow Tail Wines: Breakaway Product Positioning External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yellow Tail Wines: Breakaway Product Positioning are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yellow Tail 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 Yellow Tail Wines: Breakaway Product Positioning .
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. Yellow Tail needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Yellow Tail is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Yellow Tail 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yellow Tail 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.
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.
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 Yellow Tail business can come under increasing regulations regarding data privacy, data security, etc.
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. Yellow Tail will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Yellow Tail
– 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 Yellow Tail.
Consumer confidence and its impact on Yellow Tail 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.
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 Yellow Tail.
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. Yellow Tail can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Yellow Tail with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Yellow Tail Wines: Breakaway Product Positioning 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 Yellow Tail Wines: Breakaway Product Positioning 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 Yellow Tail Wines: Breakaway Product Positioning 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 Yellow Tail Wines: Breakaway Product Positioning 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 Yellow Tail Wines: Breakaway Product Positioning 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 Yellow Tail needs to make to build a sustainable competitive advantage.
