Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market
Launched in 1998, Russian Standard vodka quickly became the highest selling premium vodka in Russia, ahead of Stoli, Smirnoff, and Absolut. Russian StandardA?s success can be attributed to the high quality of the vodka itself, its innovative and distinctive bottle, to its strong presence in bars, and to a brand identity that is proud to leverage its Russian heritage while promising world-class standards of quality. The company, which also owns a successful bank, Russian Standard bank, is considering whether it should launch Russian Standard in the biggest premium vodka market in the world - the US - and whether it should adapt its marketing mix or stick with the strategy that has been so successful in Russia.
Swot Analysis of "Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market" written by Pierre Chandon, Vadim Grigorian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vodka Russian facing as an external strategic factors. Some of the topics covered in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market casestudy better are - – technology disruption, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vodka Russian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vodka Russian 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market can be done for the following purposes –
1. Strategic planning using facts provided in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market case study
2. Improving business portfolio management of Vodka Russian
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 Vodka Russian
Strengths Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vodka Russian in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market Harvard Business Review case study are -
Effective Research and Development (R&D)
– Vodka Russian 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Vodka Russian is one of the most innovative firm in sector. Manager in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Vodka Russian has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Vodka Russian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Vodka Russian 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 Vodka Russian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Sales & Marketing industry
– Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market firm has clearly differentiated products in the market place. This has enabled Vodka Russian to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Vodka Russian to invest into research and development (R&D) and innovation.
Organizational Resilience of Vodka Russian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vodka Russian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Vodka Russian 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.
Diverse revenue streams
– Vodka Russian is present in almost all the verticals within the industry. This has provided firm in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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.
Analytics focus
– Vodka Russian 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 Pierre Chandon, Vadim Grigorian 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.
Low bargaining power of suppliers
– Suppliers of Vodka Russian in the sector have low bargaining power. Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vodka Russian to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Vodka Russian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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.
Weaknesses Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market are -
Lack of clear differentiation of Vodka Russian products
– To increase the profitability and margins on the products, Vodka Russian needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market HBR case study mentions - Vodka Russian 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market, 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.
Increasing silos among functional specialists
– The organizational structure of Vodka Russian is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Vodka Russian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vodka Russian to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Vodka Russian 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market, is just above the industry average. Vodka Russian 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market, it seems that the employees of Vodka Russian 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market, in the dynamic environment Vodka Russian has struggled to respond to the nimble upstart competition. Vodka Russian has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Vodka Russian 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.
Interest costs
– Compare to the competition, Vodka Russian 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.
Products dominated business model
– Even though Vodka Russian 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 - Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market should strive to include more intangible value offerings along with its core products and services.
Opportunities Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market | 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market are -
Learning at scale
– Online learning technologies has now opened space for Vodka Russian 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
– Vodka Russian 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vodka Russian can use these opportunities to build new business models that can help the communities that Vodka Russian operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vodka Russian 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 Vodka Russian to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Vodka Russian 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. Vodka Russian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Vodka Russian 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vodka Russian 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
– Vodka Russian 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, Vodka Russian is facing challenges because of the dominance of functional experts in the organization. Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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.
Using analytics as competitive advantage
– Vodka Russian 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vodka Russian to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Vodka Russian 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vodka Russian 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.
Threats Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market are -
Consumer confidence and its impact on Vodka Russian 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market, Vodka Russian 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vodka Russian with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Vodka Russian in the Sales & Marketing sector and impact the bottomline 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 Vodka Russian 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.
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 Vodka Russian business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Vodka Russian can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Vodka Russian 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.
Increasing wage structure of Vodka Russian
– 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 Vodka Russian.
Technology acceleration in Forth Industrial Revolution
– Vodka Russian has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Vodka Russian 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.
High dependence on third party suppliers
– Vodka Russian high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vodka Russian 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market .
Weighted SWOT Analysis of Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market 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 Vodka Russian needs to make to build a sustainable competitive advantage.
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