Case Study Description of Crown Distilleries: Multi-Brand Extension
The chief marketing manager of Crown Distilleries (Crown) in Raipur, the capital city of the Indian state of Chhattisgarh, faced cumbersome brand-building activities and maintenance of its brand equity. Competitors began taking market share from Crown's well-established brand. Crown added new brands to its portfolio in response to its competitors' activities. Would it be fruitful for the company to opt for an umbrella brand in a particular segment or continue to add new names to its product portfolio? How would the company develop an action plan to beat competitors, choose a brand name for its new product, and build strong brand equity? Anagha Shukre is affiliated with Indian Institute of Management Raipur. Asheesh S. Kedia is affiliated with Crown Distilleries.
Swot Analysis of "Crown Distilleries: Multi-Brand Extension" written by Anagha Shukre, Asheesh S. Kedia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crown Distilleries facing as an external strategic factors. Some of the topics covered in Crown Distilleries: Multi-Brand Extension case study are - Strategic Management Strategies, Manufacturing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Crown Distilleries: Multi-Brand Extension casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing household debt because of falling income levels, there is increasing trade war between United States & China, technology disruption, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, increasing energy prices, etc
Introduction to SWOT Analysis of Crown Distilleries: Multi-Brand Extension
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crown Distilleries: Multi-Brand Extension case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crown Distilleries, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crown Distilleries 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 Crown Distilleries: Multi-Brand Extension can be done for the following purposes –
1. Strategic planning using facts provided in Crown Distilleries: Multi-Brand Extension case study
2. Improving business portfolio management of Crown Distilleries
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 Crown Distilleries
Strengths Crown Distilleries: Multi-Brand Extension | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crown Distilleries in Crown Distilleries: Multi-Brand Extension Harvard Business Review case study are -
Training and development
– Crown Distilleries has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Crown Distilleries: Multi-Brand Extension 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.
Operational resilience
– The operational resilience strategy in the Crown Distilleries: Multi-Brand Extension 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Crown Distilleries: Multi-Brand Extension firm has clearly differentiated products in the market place. This has enabled Crown Distilleries to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Crown Distilleries to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Crown Distilleries has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crown Distilleries 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 Crown Distilleries
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Crown Distilleries does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Crown Distilleries is one of the leading recruiters in the industry. Managers in the Crown Distilleries: Multi-Brand Extension are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Crown Distilleries is one of the most innovative firm in sector. Manager in Crown Distilleries: Multi-Brand Extension Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– Crown Distilleries 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 Crown Distilleries in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Crown Distilleries has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crown Distilleries to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Crown Distilleries 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.
Learning organization
- Crown Distilleries 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 Crown Distilleries is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Crown Distilleries: Multi-Brand Extension Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Crown Distilleries 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.
Weaknesses Crown Distilleries: Multi-Brand Extension | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crown Distilleries: Multi-Brand Extension are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Crown Distilleries is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Crown Distilleries: Multi-Brand Extension can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Crown Distilleries: Multi-Brand Extension 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 Crown Distilleries: Multi-Brand Extension can leverage the sales team experience to cultivate customer relationships as Crown Distilleries is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Crown Distilleries is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Crown Distilleries needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Crown Distilleries to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Crown Distilleries 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 - Crown Distilleries: Multi-Brand Extension should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Crown Distilleries: Multi-Brand Extension, is just above the industry average. Crown Distilleries 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.
Lack of clear differentiation of Crown Distilleries products
– To increase the profitability and margins on the products, Crown Distilleries needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Crown Distilleries 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 to strategic competitive environment developments
– As Crown Distilleries: Multi-Brand Extension HBR case study mentions - Crown Distilleries 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.
Need for greater diversity
– Crown Distilleries 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.
No frontier risks strategy
– After analyzing the HBR case study Crown Distilleries: Multi-Brand Extension, 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.
Capital Spending Reduction
– Even during the low interest decade, Crown Distilleries 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.
Opportunities Crown Distilleries: Multi-Brand Extension | 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 Crown Distilleries: Multi-Brand Extension are -
Learning at scale
– Online learning technologies has now opened space for Crown Distilleries 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.
Developing new processes and practices
– Crown Distilleries 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.
Better consumer reach
– The expansion of the 5G network will help Crown Distilleries to increase its market reach. Crown Distilleries 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crown Distilleries is facing challenges because of the dominance of functional experts in the organization. Crown Distilleries: Multi-Brand Extension 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crown Distilleries can use these opportunities to build new business models that can help the communities that Crown Distilleries operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crown Distilleries 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. Crown Distilleries 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.
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 Crown Distilleries in the consumer business. Now Crown Distilleries can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Crown Distilleries 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.
Creating value in data economy
– The success of analytics program of Crown Distilleries has opened avenues for new revenue streams for the organization in the industry. This can help Crown Distilleries to build a more holistic ecosystem as suggested in the Crown Distilleries: Multi-Brand Extension case study. Crown Distilleries can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Crown Distilleries can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crown Distilleries 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.
Manufacturing automation
– Crown Distilleries 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Crown Distilleries 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 Crown Distilleries to hire the very best people irrespective of their geographical location.
Threats Crown Distilleries: Multi-Brand Extension External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crown Distilleries: Multi-Brand Extension are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crown Distilleries: Multi-Brand Extension, Crown Distilleries 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 .
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. Crown Distilleries needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crown Distilleries 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 Crown Distilleries: Multi-Brand Extension .
Regulatory challenges
– Crown Distilleries needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Crown Distilleries with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Crown Distilleries 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.
Consumer confidence and its impact on Crown Distilleries 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.
Increasing wage structure of Crown Distilleries
– 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 Crown Distilleries.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crown Distilleries 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.
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 Crown Distilleries in the Sales & Marketing sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Crown Distilleries will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Crown Distilleries: Multi-Brand Extension 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 Crown Distilleries: Multi-Brand Extension 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 Crown Distilleries: Multi-Brand Extension 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 Crown Distilleries: Multi-Brand Extension 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 Crown Distilleries: Multi-Brand Extension 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 Crown Distilleries needs to make to build a sustainable competitive advantage.
