Terra Bite Lounge: Pay What You Want Cafe SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Terra Bite Lounge: Pay What You Want Cafe
In April 2009, the founder and owner of Terra Bite Lounge was considering opening another location. The Terra Bite Lounge was a Kirkland, Washington cafA? with no prices and voluntary payment. The owner believed that Terra Bite was a demonstration of a high level of honesty and trust, between himself and the customer. There were several considerations to evaluate in deciding to open a new location. Where should the new location be? The current location was in an affluent suburb but the owner believed that several types of neighbourhoods would be receptive. What types of consumer characteristics would best be suited towards this model of trusting that payment would be made? Is there anything that could be added to the current model to make Terra Bite more successful? He was careful to consider those changes or additions that were consistent with the current social trust component of the original Terra Bite model.
Swot Analysis of "Terra Bite Lounge: Pay What You Want Cafe" written by June Cotte, Remi Trudel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bite Terra facing as an external strategic factors. Some of the topics covered in Terra Bite Lounge: Pay What You Want Cafe case study are - Strategic Management Strategies, Entrepreneurship, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Terra Bite Lounge: Pay What You Want Cafe casestudy better are - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing commodity prices, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of Terra Bite Lounge: Pay What You Want Cafe
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Terra Bite Lounge: Pay What You Want Cafe case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bite Terra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bite Terra 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 Terra Bite Lounge: Pay What You Want Cafe can be done for the following purposes –
1. Strategic planning using facts provided in Terra Bite Lounge: Pay What You Want Cafe case study
2. Improving business portfolio management of Bite Terra
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 Bite Terra
Strengths Terra Bite Lounge: Pay What You Want Cafe | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bite Terra in Terra Bite Lounge: Pay What You Want Cafe Harvard Business Review case study are -
Training and development
– Bite Terra has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Terra Bite Lounge: Pay What You Want Cafe 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.
Effective Research and Development (R&D)
– Bite Terra 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 Terra Bite Lounge: Pay What You Want Cafe - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Sales & Marketing field
– Bite Terra 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 Bite Terra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Bite Terra 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.
Highly skilled collaborators
– Bite Terra 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 Terra Bite Lounge: Pay What You Want Cafe HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Bite Terra digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bite Terra 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.
Strong track record of project management
– Bite Terra is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Bite Terra has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bite Terra to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Terra Bite Lounge: Pay What You Want Cafe 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.
Successful track record of launching new products
– Bite Terra has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bite Terra 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.
High switching costs
– The high switching costs that Bite Terra 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.
Low bargaining power of suppliers
– Suppliers of Bite Terra in the sector have low bargaining power. Terra Bite Lounge: Pay What You Want Cafe has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bite Terra to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Terra Bite Lounge: Pay What You Want Cafe | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Terra Bite Lounge: Pay What You Want Cafe are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Terra Bite Lounge: Pay What You Want Cafe, is just above the industry average. Bite Terra 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.
Capital Spending Reduction
– Even during the low interest decade, Bite Terra 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Terra Bite Lounge: Pay What You Want Cafe 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 Bite Terra has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Terra Bite Lounge: Pay What You Want Cafe 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 Bite Terra 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Bite Terra is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Bite Terra needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bite Terra to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Terra Bite Lounge: Pay What You Want Cafe, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, June Cotte, Remi Trudel suggests that, Bite Terra is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As Terra Bite Lounge: Pay What You Want Cafe HBR case study mentions - Bite Terra 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.
Products dominated business model
– Even though Bite Terra 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 - Terra Bite Lounge: Pay What You Want Cafe should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Bite Terra products
– To increase the profitability and margins on the products, Bite Terra needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Terra Bite Lounge: Pay What You Want Cafe, in the dynamic environment Bite Terra has struggled to respond to the nimble upstart competition. Bite Terra has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Terra Bite Lounge: Pay What You Want Cafe | 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 Terra Bite Lounge: Pay What You Want Cafe are -
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 Bite Terra in the consumer business. Now Bite Terra can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Bite Terra 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bite Terra is facing challenges because of the dominance of functional experts in the organization. Terra Bite Lounge: Pay What You Want Cafe 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bite Terra can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bite Terra can use these opportunities to build new business models that can help the communities that Bite Terra 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. Bite Terra 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. Bite Terra 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bite Terra 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.
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 Bite Terra 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.
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. Bite Terra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bite Terra 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.
Leveraging digital technologies
– Bite Terra 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.
Creating value in data economy
– The success of analytics program of Bite Terra has opened avenues for new revenue streams for the organization in the industry. This can help Bite Terra to build a more holistic ecosystem as suggested in the Terra Bite Lounge: Pay What You Want Cafe case study. Bite Terra can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Bite Terra 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.
Threats Terra Bite Lounge: Pay What You Want Cafe External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Terra Bite Lounge: Pay What You Want Cafe 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. Bite Terra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Bite Terra 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. Bite Terra can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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. Bite Terra 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 Bite Terra is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Bite Terra has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Bite Terra 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Terra Bite Lounge: Pay What You Want Cafe, Bite Terra 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 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bite Terra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Bite Terra 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.
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 Bite Terra business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bite Terra 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.
Increasing wage structure of Bite Terra
– 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 Bite Terra.
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 Bite Terra in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Terra Bite Lounge: Pay What You Want Cafe 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 Terra Bite Lounge: Pay What You Want Cafe 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 Terra Bite Lounge: Pay What You Want Cafe 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 Terra Bite Lounge: Pay What You Want Cafe 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 Terra Bite Lounge: Pay What You Want Cafe 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 Bite Terra needs to make to build a sustainable competitive advantage.