Case Study Description of McDowell's Vintage Classic Premium Whisky
The case focuses on the launch of McDowell's Vintage Premium Indian Whisky in the mid-1980's (the dates used in the case are later and exchange rates and prices have been adjusted accordingly. The essence of the marketing challenge faced by the marketing manager is unaffected by the later dates). McDowell must deal with a common dilemma faced by domestic firms in developing economies where growth frequently produces a greater concentration of wealth at the upper end of the market. Frequently domestic products in developing nations are perceived to be of poor quality and do not have the cachet of well-known international trademarks. As a result, the growing affluence of the middle class in these nations can lead to increasing consumption of high price, high margin imports while domestic products are restricted to the low price/high volume business where it is difficult to be profitable. To address this problem, McDowell has developed a product that compares favourably in taste tests with imported products however; it does carry the baggage of being a domestic brand. The case considers the problem of the marketing manager for McDowell's Vintage PIW who must choose a positioning and marketing strategy for his product. An important decision is whether the new product should be positioned as an acceptable alternative to imported scotch or whether it should be positioned as the best tasting domestic product. A further problem for the manager is to choose an appropriate marketing strategy for the product given the size of the country and the difficulty of reaching the target market. The timing of the case is 6 months before the scheduled launch for the product. The manager needs to finalize the positioning for the new product. In addition, the manager is considering several alternative strategies for the product that involve difficult decisions in terms of distribution, promotion and packaging.
Swot Analysis of "McDowell's Vintage Classic Premium Whisky" written by David A. Soberman, Ganesh Iyer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mcdowell's Vintage facing as an external strategic factors. Some of the topics covered in McDowell's Vintage Classic Premium Whisky case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the McDowell's Vintage Classic Premium Whisky casestudy better are - – increasing commodity prices, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of McDowell's Vintage Classic Premium Whisky
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in McDowell's Vintage Classic Premium Whisky case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mcdowell's Vintage, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mcdowell's Vintage 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 McDowell's Vintage Classic Premium Whisky can be done for the following purposes –
1. Strategic planning using facts provided in McDowell's Vintage Classic Premium Whisky case study
2. Improving business portfolio management of Mcdowell's Vintage
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 Mcdowell's Vintage
Strengths McDowell's Vintage Classic Premium Whisky | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mcdowell's Vintage in McDowell's Vintage Classic Premium Whisky Harvard Business Review case study are -
Effective Research and Development (R&D)
– Mcdowell's Vintage 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 McDowell's Vintage Classic Premium Whisky - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Mcdowell's Vintage has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in McDowell's Vintage Classic Premium Whisky 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.
High switching costs
– The high switching costs that Mcdowell's Vintage 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Mcdowell's Vintage digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mcdowell's Vintage 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.
Ability to lead change in Sales & Marketing field
– Mcdowell's Vintage 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 Mcdowell's Vintage in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Mcdowell's Vintage is one of the most innovative firm in sector. Manager in McDowell's Vintage Classic Premium Whisky Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Mcdowell's Vintage has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mcdowell's Vintage has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Mcdowell's Vintage in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the McDowell's Vintage Classic Premium Whisky 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.
Highly skilled collaborators
– Mcdowell's Vintage 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 McDowell's Vintage Classic Premium Whisky HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Mcdowell's Vintage is one of the leading recruiters in the industry. Managers in the McDowell's Vintage Classic Premium Whisky 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 Mcdowell's Vintage in the sector have low bargaining power. McDowell's Vintage Classic Premium Whisky has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mcdowell's Vintage to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses McDowell's Vintage Classic Premium Whisky | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McDowell's Vintage Classic Premium Whisky are -
Workers concerns about automation
– As automation is fast increasing in the segment, Mcdowell's Vintage 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.
Lack of clear differentiation of Mcdowell's Vintage products
– To increase the profitability and margins on the products, Mcdowell's Vintage needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Mcdowell's Vintage has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mcdowell's Vintage is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study McDowell's Vintage Classic Premium Whisky 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 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 Mcdowell's Vintage supply chain. Even after few cautionary changes mentioned in the HBR case study - McDowell's Vintage Classic Premium Whisky, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mcdowell's Vintage vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As McDowell's Vintage Classic Premium Whisky HBR case study mentions - Mcdowell's Vintage 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 Mcdowell's Vintage 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study McDowell's Vintage Classic Premium Whisky, in the dynamic environment Mcdowell's Vintage has struggled to respond to the nimble upstart competition. Mcdowell's Vintage has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the McDowell's Vintage Classic Premium Whisky 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 Mcdowell's Vintage has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Mcdowell's Vintage, firm in the HBR case study McDowell's Vintage Classic Premium Whisky needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study McDowell's Vintage Classic Premium Whisky 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 Mcdowell's Vintage 's lucrative customers.
Opportunities McDowell's Vintage Classic Premium Whisky | 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 McDowell's Vintage Classic Premium Whisky are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mcdowell's Vintage 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.
Building a culture of innovation
– managers at Mcdowell's Vintage 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mcdowell's Vintage can use these opportunities to build new business models that can help the communities that Mcdowell's Vintage operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Learning at scale
– Online learning technologies has now opened space for Mcdowell's Vintage 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.
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 Mcdowell's Vintage 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.
Loyalty marketing
– Mcdowell's Vintage 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mcdowell's Vintage can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mcdowell's Vintage 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, McDowell's Vintage Classic Premium Whisky, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Mcdowell's Vintage 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. Mcdowell's Vintage 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.
Creating value in data economy
– The success of analytics program of Mcdowell's Vintage has opened avenues for new revenue streams for the organization in the industry. This can help Mcdowell's Vintage to build a more holistic ecosystem as suggested in the McDowell's Vintage Classic Premium Whisky case study. Mcdowell's Vintage can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Mcdowell's Vintage to increase its market reach. Mcdowell's Vintage 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.
Using analytics as competitive advantage
– Mcdowell's Vintage 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 McDowell's Vintage Classic Premium Whisky - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mcdowell's Vintage 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 Mcdowell's Vintage 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 Mcdowell's Vintage to hire the very best people irrespective of their geographical location.
Threats McDowell's Vintage Classic Premium Whisky External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study McDowell's Vintage Classic Premium Whisky are -
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. Mcdowell's Vintage can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Mcdowell's Vintage in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Mcdowell's Vintage is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Mcdowell's Vintage 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.
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.
Regulatory challenges
– Mcdowell's Vintage 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.
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 Mcdowell's Vintage.
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. Mcdowell's Vintage 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 Mcdowell's Vintage
– 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 Mcdowell's Vintage.
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.
Consumer confidence and its impact on Mcdowell's Vintage 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.
High dependence on third party suppliers
– Mcdowell's Vintage 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.
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. Mcdowell's Vintage needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of McDowell's Vintage Classic Premium Whisky 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 McDowell's Vintage Classic Premium Whisky 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 McDowell's Vintage Classic Premium Whisky 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 McDowell's Vintage Classic Premium Whisky 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 McDowell's Vintage Classic Premium Whisky 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 Mcdowell's Vintage needs to make to build a sustainable competitive advantage.
