Case Study Description of Quaker Oat's Oatmeal Division
The hot breakfast cereal division of Quaker Oats was in serious decline, and the increasing American preference for speed and convenience at breakfast did not bode well for the category. The senior VP overseeing the hot breakfast division has been given an ultimatum by the CEO to turn the company's namesake product line around. She develops a marketing plan, but will it work?
Swot Analysis of "Quaker Oat's Oatmeal Division" written by Christie Nordhielm, Gretchen Hall includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Breakfast Quaker facing as an external strategic factors. Some of the topics covered in Quaker Oat's Oatmeal Division case study are - Strategic Management Strategies, Pricing, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Quaker Oat's Oatmeal Division casestudy better are - – increasing energy prices, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing commodity prices, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Quaker Oat's Oatmeal Division
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Quaker Oat's Oatmeal Division case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Breakfast Quaker, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Breakfast Quaker 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 Quaker Oat's Oatmeal Division can be done for the following purposes –
1. Strategic planning using facts provided in Quaker Oat's Oatmeal Division case study
2. Improving business portfolio management of Breakfast Quaker
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 Breakfast Quaker
Strengths Quaker Oat's Oatmeal Division | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Breakfast Quaker in Quaker Oat's Oatmeal Division Harvard Business Review case study are -
Effective Research and Development (R&D)
– Breakfast Quaker 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 Quaker Oat's Oatmeal Division - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Breakfast Quaker 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
– Breakfast Quaker is one of the most innovative firm in sector. Manager in Quaker Oat's Oatmeal Division Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Breakfast Quaker 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 Breakfast Quaker is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Quaker Oat's Oatmeal Division Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Breakfast Quaker are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Breakfast Quaker 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 Christie Nordhielm, Gretchen Hall 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.
Organizational Resilience of Breakfast Quaker
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Breakfast Quaker does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Breakfast Quaker is one of the leading recruiters in the industry. Managers in the Quaker Oat's Oatmeal Division are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Breakfast Quaker in the sector have low bargaining power. Quaker Oat's Oatmeal Division has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Breakfast Quaker to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Quaker Oat's Oatmeal Division 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Quaker Oat's Oatmeal Division firm has clearly differentiated products in the market place. This has enabled Breakfast Quaker to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Breakfast Quaker to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Breakfast Quaker is present in almost all the verticals within the industry. This has provided firm in Quaker Oat's Oatmeal Division case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Quaker Oat's Oatmeal Division | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Quaker Oat's Oatmeal Division are -
High operating costs
– Compare to the competitors, firm in the HBR case study Quaker Oat's Oatmeal Division 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 Breakfast Quaker 's lucrative customers.
Slow to strategic competitive environment developments
– As Quaker Oat's Oatmeal Division HBR case study mentions - Breakfast Quaker 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 Breakfast Quaker 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.
Low market penetration in new markets
– Outside its home market of Breakfast Quaker, firm in the HBR case study Quaker Oat's Oatmeal Division needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Breakfast Quaker 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.
Capital Spending Reduction
– Even during the low interest decade, Breakfast Quaker 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Quaker Oat's Oatmeal Division, in the dynamic environment Breakfast Quaker has struggled to respond to the nimble upstart competition. Breakfast Quaker has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Breakfast Quaker is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Quaker Oat's Oatmeal Division can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Quaker Oat's Oatmeal Division, it seems that the employees of Breakfast Quaker 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.
Lack of clear differentiation of Breakfast Quaker products
– To increase the profitability and margins on the products, Breakfast Quaker needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Breakfast Quaker supply chain. Even after few cautionary changes mentioned in the HBR case study - Quaker Oat's Oatmeal Division, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Breakfast Quaker vulnerable to further global disruptions in South East Asia.
Opportunities Quaker Oat's Oatmeal Division | 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 Quaker Oat's Oatmeal Division are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Breakfast Quaker 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, Quaker Oat's Oatmeal Division, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Breakfast Quaker has opened avenues for new revenue streams for the organization in the industry. This can help Breakfast Quaker to build a more holistic ecosystem as suggested in the Quaker Oat's Oatmeal Division case study. Breakfast Quaker can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Breakfast Quaker 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.
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 Breakfast Quaker in the consumer business. Now Breakfast Quaker 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 Breakfast Quaker 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 Breakfast Quaker 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. Breakfast Quaker can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Breakfast Quaker 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Breakfast Quaker can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Breakfast Quaker can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Breakfast Quaker is facing challenges because of the dominance of functional experts in the organization. Quaker Oat's Oatmeal Division 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.
Buying journey improvements
– Breakfast Quaker can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Quaker Oat's Oatmeal Division 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.
Better consumer reach
– The expansion of the 5G network will help Breakfast Quaker to increase its market reach. Breakfast Quaker 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Breakfast Quaker 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.
Threats Quaker Oat's Oatmeal Division External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Quaker Oat's Oatmeal Division are -
Environmental challenges
– Breakfast Quaker 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. Breakfast Quaker can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Breakfast Quaker needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Breakfast Quaker with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Breakfast Quaker.
Consumer confidence and its impact on Breakfast Quaker 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.
Shortening product life cycle
– it is one of the major threat that Breakfast Quaker is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of Breakfast Quaker
– 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 Breakfast Quaker.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Breakfast Quaker 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.
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. Breakfast Quaker needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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. Breakfast Quaker 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Breakfast Quaker 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 Quaker Oat's Oatmeal Division .
Weighted SWOT Analysis of Quaker Oat's Oatmeal Division 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 Quaker Oat's Oatmeal Division 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 Quaker Oat's Oatmeal Division 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 Quaker Oat's Oatmeal Division 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 Quaker Oat's Oatmeal Division 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 Breakfast Quaker needs to make to build a sustainable competitive advantage.