Case Study Description of Paper Boat Beverage: Branding Delightful Nostalgia
Hector Beverages reinvented the ethnic drinks category in the Indian market with its beverage brand Paper Boat. The brand had been successful since its launch in 2013, posting triple-digit growth in 2015. By the end of December 2015, Hector Beverages' future seemed to be heavily dependent upon Paper Boat. With Paper Boat constituting 90 per cent of the company's total sales, 2016 would be a critical year for Hector Beverages. Should the company add more variety to its line of products, or should it focus on a few best-selling variants? Would the Paper Boat brand remain strong despite the launch of a similar product by a major competitor? Could Hector Beverages maintain its hold on the Indian ethnic drinks market? Saju B. is affiliated with VIT University. Hari Krishnan K. is affiliated with VIT University. Joseph Jeya Anand S. is affiliated with VIT University.
Authors :: Saju B, Harikrishnan K, Joseph Jeya Anand S
Swot Analysis of "Paper Boat Beverage: Branding Delightful Nostalgia" written by Saju B, Harikrishnan K, Joseph Jeya Anand S includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Boat Hector facing as an external strategic factors. Some of the topics covered in Paper Boat Beverage: Branding Delightful Nostalgia case study are - Strategic Management Strategies, Entrepreneurship, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Paper Boat Beverage: Branding Delightful Nostalgia casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, talent flight as more people leaving formal jobs, technology disruption, wage bills are increasing,
increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Paper Boat Beverage: Branding Delightful Nostalgia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paper Boat Beverage: Branding Delightful Nostalgia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Boat Hector, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Boat Hector 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 Paper Boat Beverage: Branding Delightful Nostalgia can be done for the following purposes –
1. Strategic planning using facts provided in Paper Boat Beverage: Branding Delightful Nostalgia case study
2. Improving business portfolio management of Boat Hector
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 Boat Hector
Strengths Paper Boat Beverage: Branding Delightful Nostalgia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Boat Hector in Paper Boat Beverage: Branding Delightful Nostalgia Harvard Business Review case study are -
Organizational Resilience of Boat Hector
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Boat Hector does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Boat Hector in the sector have low bargaining power. Paper Boat Beverage: Branding Delightful Nostalgia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Boat Hector to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Boat Hector 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 Paper Boat Beverage: Branding Delightful Nostalgia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Boat Hector 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 Boat Hector is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Paper Boat Beverage: Branding Delightful Nostalgia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Paper Boat Beverage: Branding Delightful Nostalgia 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.
Analytics focus
– Boat Hector 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 Saju B, Harikrishnan K, Joseph Jeya Anand S 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.
Ability to recruit top talent
– Boat Hector is one of the leading recruiters in the industry. Managers in the Paper Boat Beverage: Branding Delightful Nostalgia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Boat Hector 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.
Successful track record of launching new products
– Boat Hector has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Boat Hector 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.
Innovation driven organization
– Boat Hector is one of the most innovative firm in sector. Manager in Paper Boat Beverage: Branding Delightful Nostalgia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Boat Hector has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Paper Boat Beverage: Branding Delightful Nostalgia 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Boat Hector digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Boat Hector 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.
Weaknesses Paper Boat Beverage: Branding Delightful Nostalgia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paper Boat Beverage: Branding Delightful Nostalgia are -
Need for greater diversity
– Boat Hector 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paper Boat Beverage: Branding Delightful Nostalgia, it seems that the employees of Boat Hector 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.
Slow to strategic competitive environment developments
– As Paper Boat Beverage: Branding Delightful Nostalgia HBR case study mentions - Boat Hector 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.
No frontier risks strategy
– After analyzing the HBR case study Paper Boat Beverage: Branding Delightful Nostalgia, 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.
Skills based hiring
– The stress on hiring functional specialists at Boat Hector 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Paper Boat Beverage: Branding Delightful Nostalgia, is just above the industry average. Boat Hector 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, Boat Hector 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.
Interest costs
– Compare to the competition, Boat Hector 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Paper Boat Beverage: Branding Delightful Nostalgia 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 Boat Hector has relatively successful track record of launching new products.
Lack of clear differentiation of Boat Hector products
– To increase the profitability and margins on the products, Boat Hector needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Boat Hector 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 - Paper Boat Beverage: Branding Delightful Nostalgia should strive to include more intangible value offerings along with its core products and services.
Opportunities Paper Boat Beverage: Branding Delightful Nostalgia | 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 Paper Boat Beverage: Branding Delightful Nostalgia are -
Buying journey improvements
– Boat Hector can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Paper Boat Beverage: Branding Delightful Nostalgia 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.
Creating value in data economy
– The success of analytics program of Boat Hector has opened avenues for new revenue streams for the organization in the industry. This can help Boat Hector to build a more holistic ecosystem as suggested in the Paper Boat Beverage: Branding Delightful Nostalgia case study. Boat Hector can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Boat Hector 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Boat Hector 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 Boat Hector to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Boat Hector 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, Boat Hector can use these opportunities to build new business models that can help the communities that Boat Hector operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Boat Hector 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, Paper Boat Beverage: Branding Delightful Nostalgia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Boat Hector is facing challenges because of the dominance of functional experts in the organization. Paper Boat Beverage: Branding Delightful Nostalgia 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Boat Hector 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Boat Hector can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Boat Hector 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.
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 Boat Hector 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. Boat Hector can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Paper Boat Beverage: Branding Delightful Nostalgia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Paper Boat Beverage: Branding Delightful Nostalgia are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Boat Hector with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Boat Hector is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Paper Boat Beverage: Branding Delightful Nostalgia, Boat Hector 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 .
Stagnating economy with rate increase
– Boat Hector 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.
High dependence on third party suppliers
– Boat Hector 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.
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 Boat Hector in the Sales & Marketing sector and impact the bottomline of the organization.
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 Boat Hector.
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 Boat Hector 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. Boat Hector can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Boat Hector
– 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 Boat Hector.
Consumer confidence and its impact on Boat Hector 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Boat Hector 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 Paper Boat Beverage: Branding Delightful Nostalgia .
Weighted SWOT Analysis of Paper Boat Beverage: Branding Delightful Nostalgia 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 Paper Boat Beverage: Branding Delightful Nostalgia 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 Paper Boat Beverage: Branding Delightful Nostalgia 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 Paper Boat Beverage: Branding Delightful Nostalgia 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 Paper Boat Beverage: Branding Delightful Nostalgia 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 Boat Hector needs to make to build a sustainable competitive advantage.
