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 - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, 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 -
Strong track record of project management
– Ararat Brandy 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
- 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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Ararat Brandy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ararat Brandy has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
Sustainable margins compare to other players in Sales & Marketing industry
– ArArAt Brandy: Transforming a Legend into a Modern Icon firm has clearly differentiated products in the market place. This has enabled Ararat Brandy to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Ararat Brandy to invest into research and development (R&D) and innovation.
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.
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.
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.
Training and development
– Ararat Brandy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ArArAt Brandy: Transforming a Legend into a Modern Icon 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.
Organizational Resilience of Ararat Brandy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ararat Brandy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ArArAt Brandy: Transforming a Legend into a Modern Icon, in the dynamic environment Ararat Brandy has struggled to respond to the nimble upstart competition. Ararat Brandy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Ararat Brandy needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
High cash cycle compare to competitors
Ararat Brandy 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.
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.
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.
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 Ararat Brandy supply chain. Even after few cautionary changes mentioned in the HBR case study - ArArAt Brandy: Transforming a Legend into a Modern Icon, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ararat Brandy vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Ararat Brandy is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Ararat Brandy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ararat Brandy to focus more on services rather than just following the product oriented approach.
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.
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.
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 -
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Ararat Brandy 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ararat Brandy can use these opportunities to build new business models that can help the communities that Ararat Brandy 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 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.
Buying journey improvements
– Ararat Brandy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ArArAt Brandy: Transforming a Legend into a Modern Icon 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.
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.
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 Ararat Brandy in the consumer business. Now Ararat Brandy can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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. Ararat Brandy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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 .
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.
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.
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.
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.
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.
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 .
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.
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.
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.
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.
Stagnating economy with rate increase
– Ararat Brandy can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– 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.
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.