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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing commodity prices, technology disruption, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
increasing energy prices, there is backlash against globalization, 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 -
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.
Analytics focus
– Bite Terra 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 June Cotte, Remi Trudel 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.
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.
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.
Organizational Resilience of Bite Terra
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bite Terra does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Bite Terra is one of the leading recruiters in the industry. Managers in the Terra Bite Lounge: Pay What You Want Cafe are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Learning organization
- Bite Terra 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 Bite Terra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Terra Bite Lounge: Pay What You Want Cafe Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Sustainable margins compare to other players in Sales & Marketing industry
– Terra Bite Lounge: Pay What You Want Cafe firm has clearly differentiated products in the market place. This has enabled Bite Terra to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Bite Terra to invest into research and development (R&D) and innovation.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Terra Bite Lounge: Pay What You Want Cafe, it seems that the employees of Bite Terra 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.
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.
Need for greater diversity
– Bite Terra 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.
Slow decision making process
– As mentioned earlier in the report, Bite Terra 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. Bite Terra 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.
High cash cycle compare to competitors
Bite Terra 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.
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.
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.
Low market penetration in new markets
– Outside its home market of Bite Terra, firm in the HBR case study Terra Bite Lounge: Pay What You Want Cafe needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Bite Terra 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.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Bite Terra 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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bite Terra 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, Terra Bite Lounge: Pay What You Want Cafe, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bite Terra 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 Bite Terra to hire the very best people irrespective of their geographical location.
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.
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.
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.
Manufacturing automation
– Bite Terra 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.
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.
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. Bite Terra can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Bite Terra can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Terra Bite Lounge: Pay What You Want Cafe 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.
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 -
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 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.
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.
Consumer confidence and its impact on Bite Terra 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.
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.
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 Bite Terra.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bite Terra 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 Terra Bite Lounge: Pay What You Want Cafe .
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.
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.
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 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.
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.
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.