Kaps Ice Cream: Should It Enter the Premium Segment? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kaps Ice Cream: Should It Enter the Premium Segment?
On November 1, 2015, the four founders of Kaps Foods India Private Limited (Kaps) invited external business consultants to a business strategy meeting. The ice cream industry was moving toward the premium segment of the market, and Kaps was eager to move out of its stagnant phase. However, two of the four founders were skeptical about the acceptance of the Kaps brand in the higher-end market. They believed that the market would always consider Kaps a local brand, which was not ideal for moving into the premium market. Also, taking on the bigger players at the higher end of the ice cream segment would be a daunting task for the company. The four partners had a number of issues and options to ponder and discuss with consultants. Becoming a pioneer in the ice cream industry in the central Indian state of Chhattisgarh was a proud achievement for the team, but what new marketing considerations would be involved in entering the premium market? T. Sai Vijay is affiliated with Indian Institute of Management Raipur. Sanjeev Prashar is affiliated with Indian Institute of Management Raipur. Vinita Sahay is affiliated with Indian Institute of Mangement Raipur.
Authors :: T. Sai Vijay, Sanjeev Prashar, Vinita Sahay
Swot Analysis of "Kaps Ice Cream: Should It Enter the Premium Segment?" written by T. Sai Vijay, Sanjeev Prashar, Vinita Sahay includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kaps Cream facing as an external strategic factors. Some of the topics covered in Kaps Ice Cream: Should It Enter the Premium Segment? case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Kaps Ice Cream: Should It Enter the Premium Segment? casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Kaps Ice Cream: Should It Enter the Premium Segment?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kaps Ice Cream: Should It Enter the Premium Segment? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kaps Cream, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kaps Cream 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 Kaps Ice Cream: Should It Enter the Premium Segment? can be done for the following purposes –
1. Strategic planning using facts provided in Kaps Ice Cream: Should It Enter the Premium Segment? case study
2. Improving business portfolio management of Kaps Cream
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 Kaps Cream
Strengths Kaps Ice Cream: Should It Enter the Premium Segment? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kaps Cream in Kaps Ice Cream: Should It Enter the Premium Segment? Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Kaps Cream in the sector have low bargaining power. Kaps Ice Cream: Should It Enter the Premium Segment? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kaps Cream to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Kaps Cream is one of the most innovative firm in sector. Manager in Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Cream 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.
Superior customer experience
– The customer experience strategy of Kaps Cream in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Kaps Ice Cream: Should It Enter the Premium Segment? 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.
Strong track record of project management
– Kaps Cream is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Kaps Cream 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 Kaps Cream in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Kaps Cream 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.
Effective Research and Development (R&D)
– Kaps Cream 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 Kaps Ice Cream: Should It Enter the Premium Segment? - 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 recruit top talent
– Kaps Cream is one of the leading recruiters in the industry. Managers in the Kaps Ice Cream: Should It Enter the Premium Segment? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Kaps Cream 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 Kaps Cream is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kaps Ice Cream: Should It Enter the Premium Segment? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Kaps Cream 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 T. Sai Vijay, Sanjeev Prashar, Vinita Sahay 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.
Weaknesses Kaps Ice Cream: Should It Enter the Premium Segment? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kaps Ice Cream: Should It Enter the Premium Segment? are -
High operating costs
– Compare to the competitors, firm in the HBR case study Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Cream 's lucrative customers.
Interest costs
– Compare to the competition, Kaps Cream 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kaps Ice Cream: Should It Enter the Premium Segment?, in the dynamic environment Kaps Cream has struggled to respond to the nimble upstart competition. Kaps Cream has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Kaps Ice Cream: Should It Enter the Premium Segment?, 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.
Lack of clear differentiation of Kaps Cream products
– To increase the profitability and margins on the products, Kaps Cream needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Kaps Cream supply chain. Even after few cautionary changes mentioned in the HBR case study - Kaps Ice Cream: Should It Enter the Premium Segment?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kaps Cream vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kaps Cream is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kaps Ice Cream: Should It Enter the Premium Segment? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Cream has relatively successful track record of launching new products.
High cash cycle compare to competitors
Kaps Cream 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.
Slow decision making process
– As mentioned earlier in the report, Kaps Cream 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. Kaps Cream 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.
Slow to strategic competitive environment developments
– As Kaps Ice Cream: Should It Enter the Premium Segment? HBR case study mentions - Kaps Cream 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.
Opportunities Kaps Ice Cream: Should It Enter the Premium Segment? | 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 Kaps Ice Cream: Should It Enter the Premium Segment? are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kaps Cream 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 Kaps Cream to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Kaps Cream 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.
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 Kaps Cream 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kaps Cream 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, Kaps Ice Cream: Should It Enter the Premium Segment?, 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, Kaps Cream can use these opportunities to build new business models that can help the communities that Kaps Cream operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Buying journey improvements
– Kaps Cream can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kaps Ice Cream: Should It Enter the Premium Segment? 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.
Better consumer reach
– The expansion of the 5G network will help Kaps Cream to increase its market reach. Kaps Cream 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.
Developing new processes and practices
– Kaps Cream 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kaps Cream 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.
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. Kaps Cream can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Kaps Cream 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.
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 Kaps Cream in the consumer business. Now Kaps Cream can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kaps Cream is facing challenges because of the dominance of functional experts in the organization. Kaps Ice Cream: Should It Enter the Premium Segment? 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.
Threats Kaps Ice Cream: Should It Enter the Premium Segment? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kaps Ice Cream: Should It Enter the Premium Segment? are -
Increasing wage structure of Kaps Cream
– 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 Kaps Cream.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kaps Cream 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 Kaps Ice Cream: Should It Enter the Premium Segment? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kaps Ice Cream: Should It Enter the Premium Segment?, Kaps Cream 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.
Technology acceleration in Forth Industrial Revolution
– Kaps Cream has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kaps Cream 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.
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 Kaps Cream.
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. Kaps Cream needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Kaps Cream 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.
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 Kaps Cream in the Sales & Marketing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kaps Cream with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Kaps Cream 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. Kaps Cream can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High dependence on third party suppliers
– Kaps Cream 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.
Shortening product life cycle
– it is one of the major threat that Kaps Cream is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Ice Cream: Should It Enter the Premium Segment? 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 Kaps Cream needs to make to build a sustainable competitive advantage.
