ArArAt Brandy: Transforming a Legend into a Modern Icon SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ArArAt Brandy: Transforming a Legend into a Modern Icon
Ararat, the largest brand of brandy in Russia, with an enviable 32% market share and a long history, is one of the jewels in Pernod Ricard Russia's alcoholic beverage portfolio. After a recent product update, five key questions need to be answered: 1. Which consumer segment(s) should Ararat be targeted at? 2. What should be the brand platform? 3. Which of five proposed advertising options should be selected? 4. Should all seven sub-brands in the Ararat portfolio feature in the campaign, and if not, which ones? 5. In which magazines should the ads be placed?
Swot Analysis of "ArArAt Brandy: Transforming a Legend into a Modern Icon" written by Amitava Chattopadhyay, Vadim Grigorian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ararat Brandy facing as an external strategic factors. Some of the topics covered in ArArAt Brandy: Transforming a Legend into a Modern Icon case study are - Strategic Management Strategies, Emerging markets and Sales & Marketing.
Some of the macro environment factors that can be used to understand the ArArAt Brandy: Transforming a Legend into a Modern Icon casestudy better are - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of ArArAt Brandy: Transforming a Legend into a Modern Icon
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ArArAt Brandy: Transforming a Legend into a Modern Icon case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ararat Brandy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ararat Brandy 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 ArArAt Brandy: Transforming a Legend into a Modern Icon can be done for the following purposes –
1. Strategic planning using facts provided in ArArAt Brandy: Transforming a Legend into a Modern Icon case study
2. Improving business portfolio management of Ararat Brandy
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 Ararat Brandy
Strengths ArArAt Brandy: Transforming a Legend into a Modern Icon | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ararat Brandy in ArArAt Brandy: Transforming a Legend into a Modern Icon Harvard Business Review case study are -
Innovation driven organization
– Ararat Brandy is one of the most innovative firm in sector. Manager in ArArAt Brandy: Transforming a Legend into a Modern Icon Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Ararat Brandy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Ararat Brandy 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.
Ability to lead change in Sales & Marketing field
– Ararat Brandy 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 Ararat Brandy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Ararat Brandy 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 Amitava Chattopadhyay, 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.
Ability to recruit top talent
– Ararat Brandy is one of the leading recruiters in the industry. Managers in the ArArAt Brandy: Transforming a Legend into a Modern Icon are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Ararat Brandy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ararat Brandy 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.
Learning organization
- Ararat Brandy 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 Ararat Brandy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ArArAt Brandy: Transforming a Legend into a Modern Icon Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ararat Brandy in the sector have low bargaining power. ArArAt Brandy: Transforming a Legend into a Modern Icon has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ararat Brandy to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Ararat Brandy 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 ArArAt Brandy: Transforming a Legend into a Modern Icon HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Ararat Brandy is present in almost all the verticals within the industry. This has provided firm in ArArAt Brandy: Transforming a Legend into a Modern Icon 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.
High brand equity
– Ararat Brandy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ararat Brandy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses ArArAt Brandy: Transforming a Legend into a Modern Icon | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ArArAt Brandy: Transforming a Legend into a Modern Icon are -
Lack of clear differentiation of Ararat Brandy products
– To increase the profitability and margins on the products, Ararat Brandy needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ararat Brandy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ArArAt Brandy: Transforming a Legend into a Modern Icon can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study ArArAt Brandy: Transforming a Legend into a Modern Icon, 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.
Slow to strategic competitive environment developments
– As ArArAt Brandy: Transforming a Legend into a Modern Icon HBR case study mentions - Ararat Brandy 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.
Capital Spending Reduction
– Even during the low interest decade, Ararat Brandy 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the ArArAt Brandy: Transforming a Legend into a Modern Icon 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 Ararat Brandy has relatively successful track record of launching new products.
Need for greater diversity
– Ararat Brandy has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study ArArAt Brandy: Transforming a Legend into a Modern Icon 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 Ararat Brandy 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ArArAt Brandy: Transforming a Legend into a Modern Icon, it seems that the employees of Ararat Brandy 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ArArAt Brandy: Transforming a Legend into a Modern Icon, is just above the industry average. Ararat Brandy needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Ararat Brandy 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.
Opportunities ArArAt Brandy: Transforming a Legend into a Modern Icon | 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 ArArAt Brandy: Transforming a Legend into a Modern Icon are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ararat Brandy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Ararat Brandy 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ararat Brandy 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, ArArAt Brandy: Transforming a Legend into a Modern Icon, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ararat Brandy 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.
Building a culture of innovation
– managers at Ararat Brandy 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.
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 Ararat Brandy 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.
Using analytics as competitive advantage
– Ararat Brandy 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 ArArAt Brandy: Transforming a Legend into a Modern Icon - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ararat Brandy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Ararat Brandy 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.
Developing new processes and practices
– Ararat Brandy 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 Ararat Brandy 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 Ararat Brandy to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Ararat Brandy to increase its market reach. Ararat Brandy 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.
Loyalty marketing
– Ararat Brandy 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.
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. Ararat Brandy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats ArArAt Brandy: Transforming a Legend into a Modern Icon External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ArArAt Brandy: Transforming a Legend into a Modern Icon are -
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 Ararat Brandy 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 Ararat Brandy 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.
Increasing wage structure of Ararat Brandy
– 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 Ararat Brandy.
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 Ararat Brandy business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Ararat Brandy 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.
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 Ararat Brandy.
Shortening product life cycle
– it is one of the major threat that Ararat Brandy is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ararat Brandy 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 ArArAt Brandy: Transforming a Legend into a Modern Icon .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ararat Brandy 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
– Ararat Brandy 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.
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. Ararat Brandy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ArArAt Brandy: Transforming a Legend into a Modern Icon, Ararat Brandy 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 .
Environmental challenges
– Ararat Brandy 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. Ararat Brandy can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of ArArAt Brandy: Transforming a Legend into a Modern Icon 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 ArArAt Brandy: Transforming a Legend into a Modern Icon 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 ArArAt Brandy: Transforming a Legend into a Modern Icon 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 ArArAt Brandy: Transforming a Legend into a Modern Icon 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 ArArAt Brandy: Transforming a Legend into a Modern Icon 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 Ararat Brandy needs to make to build a sustainable competitive advantage.
