Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch
Lay's was a second mover when it introduced its potato chips to rapidly evolving post-communist Hungary. By inserting cash into its potato chip bags, Lay's increased sales dramatically and permanently (i.e., also post-promotion). In contrast, after withdrawing a second "Money in the Bag" promotion, sales fell. Students prepare case A (5 pages) at home. Three in-class cases and a teaching note provide analysis and managerial implications.
Authors :: Miguel Brendl, Prashant Malaviya, Srivastava Swati, Szocs Laslo
Swot Analysis of "Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch" written by Miguel Brendl, Prashant Malaviya, Srivastava Swati, Szocs Laslo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lay's Potato facing as an external strategic factors. Some of the topics covered in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch case study are - Strategic Management Strategies, Decision making, Sales, Strategic thinking and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing household debt because of falling income levels, increasing energy prices,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lay's Potato, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lay's Potato 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch can be done for the following purposes –
1. Strategic planning using facts provided in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch case study
2. Improving business portfolio management of Lay's Potato
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 Lay's Potato
Strengths Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lay's Potato in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch Harvard Business Review case study are -
Successful track record of launching new products
– Lay's Potato has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lay's Potato 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.
Organizational Resilience of Lay's Potato
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lay's Potato does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Lay's Potato 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 Lay's Potato in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Lay's Potato is present in almost all the verticals within the industry. This has provided firm in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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.
Innovation driven organization
– Lay's Potato is one of the most innovative firm in sector. Manager in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Lay's Potato 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.
Effective Research and Development (R&D)
– Lay's Potato 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch - 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
– Lay's Potato has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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.
Low bargaining power of suppliers
– Suppliers of Lay's Potato in the sector have low bargaining power. Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lay's Potato to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Lay's Potato 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 Miguel Brendl, Prashant Malaviya, Srivastava Swati, Szocs Laslo 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 Lay's Potato 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.
Ability to recruit top talent
– Lay's Potato is one of the leading recruiters in the industry. Managers in the Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch are -
Lack of clear differentiation of Lay's Potato products
– To increase the profitability and margins on the products, Lay's Potato needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch, is just above the industry average. Lay's Potato 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.
Interest costs
– Compare to the competition, Lay's Potato 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 decision making process
– As mentioned earlier in the report, Lay's Potato 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. Lay's Potato 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch HBR case study mentions - Lay's Potato 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.
Aligning sales with marketing
– It come across in the case study Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch can leverage the sales team experience to cultivate customer relationships as Lay's Potato is planning to shift buying processes online.
Products dominated business model
– Even though Lay's Potato 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 - Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Lay's Potato 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.
Need for greater diversity
– Lay's Potato has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato 's lucrative customers.
Opportunities Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch | 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lay's Potato 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 Lay's Potato to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lay's Potato 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, Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lay's Potato can use these opportunities to build new business models that can help the communities that Lay's Potato operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Using analytics as competitive advantage
– Lay's Potato 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lay's Potato to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Lay's Potato 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.
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. Lay's Potato can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lay's Potato 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.
Loyalty marketing
– Lay's Potato 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lay's Potato is facing challenges because of the dominance of functional experts in the organization. Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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.
Manufacturing automation
– Lay's Potato 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.
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. Lay's Potato 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. Lay's Potato 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.
Better consumer reach
– The expansion of the 5G network will help Lay's Potato to increase its market reach. Lay's Potato will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Lay's Potato can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lay's Potato with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Lay's Potato has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Lay's Potato 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lay's Potato 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch .
Increasing wage structure of Lay's Potato
– 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 Lay's Potato.
High dependence on third party suppliers
– Lay's Potato 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lay's Potato 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch, Lay's Potato 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 .
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 Lay's Potato business can come under increasing regulations regarding data privacy, data security, etc.
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. Lay's Potato can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Lay's Potato.
Shortening product life cycle
– it is one of the major threat that Lay's Potato 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
– Lay's Potato 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.
Weighted SWOT Analysis of Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato Chips in Hungary (A): Creating Awareness and Building Brand Image at Product Launch 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 Lay's Potato needs to make to build a sustainable competitive advantage.
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