Case Study Description of Litehouse Foods: The Glass Dilemma
This case focuses on whether Litehouse Foods should switch its signature creamy salad dressings from glass to plastic packaging. The central figure in the case is Doug Hawkins Jr., the company's Senior Business Development Manager (Marketing lead). The company, which is one of three major players nationally in the refrigerated salad dressing market, has been selling its dressings in glass jars for 50 years, and these glass jars are considered an important element in how consumers think about the Litehouse brand. Two of Litehouse Foods' competitors have recently switched to plastic, however, and this has helped them achieve a significant price advantage over Litehouse at retail. Switching to plastic jars would save Litehouse $1.5 million/year and allow it to narrow the price advantage opened up by competitors. Doug must develop a recommendation to the company's executive committee that considers the cost savings potential of plastic against the value of the glass packaging to the brand. Complicating this decision are the environmental implications of a switch from glass to plastic, both real and perceived, as well as how a change at this time would mesh with the company's recently launched growth strategy.
Authors :: John J. Lawrence, Anubha Mishra, Marie Pengilly
Swot Analysis of "Litehouse Foods: The Glass Dilemma" written by John J. Lawrence, Anubha Mishra, Marie Pengilly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Litehouse Glass facing as an external strategic factors. Some of the topics covered in Litehouse Foods: The Glass Dilemma case study are - Strategic Management Strategies, Customers, Supply chain, Sustainability and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Litehouse Foods: The Glass Dilemma casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Litehouse Foods: The Glass Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Litehouse Foods: The Glass Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Litehouse Glass, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Litehouse Glass 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 Litehouse Foods: The Glass Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Litehouse Foods: The Glass Dilemma case study
2. Improving business portfolio management of Litehouse Glass
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 Litehouse Glass
Strengths Litehouse Foods: The Glass Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Litehouse Glass in Litehouse Foods: The Glass Dilemma Harvard Business Review case study are -
Innovation driven organization
– Litehouse Glass is one of the most innovative firm in sector. Manager in Litehouse Foods: The Glass Dilemma Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Litehouse Glass has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Litehouse Foods: The Glass Dilemma 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.
High brand equity
– Litehouse Glass has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Litehouse Glass to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Litehouse Glass 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Litehouse Glass digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Litehouse Glass 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.
Effective Research and Development (R&D)
– Litehouse Glass 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 Litehouse Foods: The Glass Dilemma - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Litehouse Foods: The Glass Dilemma firm has clearly differentiated products in the market place. This has enabled Litehouse Glass to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Litehouse Glass to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Litehouse Glass 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.
Learning organization
- Litehouse Glass 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 Litehouse Glass is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Litehouse Foods: The Glass Dilemma Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Litehouse Glass 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 Litehouse Foods: The Glass Dilemma HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Sales & Marketing field
– Litehouse Glass 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 Litehouse Glass in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Litehouse Glass in the sector have low bargaining power. Litehouse Foods: The Glass Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Litehouse Glass to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Litehouse Foods: The Glass Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Litehouse Foods: The Glass Dilemma are -
Skills based hiring
– The stress on hiring functional specialists at Litehouse Glass has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Litehouse Glass 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Litehouse Foods: The Glass Dilemma, is just above the industry average. Litehouse Glass 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.
Slow to strategic competitive environment developments
– As Litehouse Foods: The Glass Dilemma HBR case study mentions - Litehouse Glass 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
– Litehouse Glass 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.
Increasing silos among functional specialists
– The organizational structure of Litehouse Glass is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Litehouse Glass needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Litehouse Glass to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Litehouse Glass 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John J. Lawrence, Anubha Mishra, Marie Pengilly suggests that, Litehouse Glass is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, Litehouse Glass 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.
Lack of clear differentiation of Litehouse Glass products
– To increase the profitability and margins on the products, Litehouse Glass needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Litehouse Foods: The Glass Dilemma, 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.
Opportunities Litehouse Foods: The Glass Dilemma | 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 Litehouse Foods: The Glass Dilemma are -
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. Litehouse Glass can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Litehouse Glass 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 Litehouse Foods: The Glass Dilemma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Litehouse Glass to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Litehouse Glass can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Litehouse Glass 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 Litehouse Glass to hire the very best people irrespective of their geographical location.
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 Litehouse Glass in the consumer business. Now Litehouse Glass can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Litehouse Glass can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Litehouse Foods: The Glass Dilemma 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.
Learning at scale
– Online learning technologies has now opened space for Litehouse Glass 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.
Creating value in data economy
– The success of analytics program of Litehouse Glass has opened avenues for new revenue streams for the organization in the industry. This can help Litehouse Glass to build a more holistic ecosystem as suggested in the Litehouse Foods: The Glass Dilemma case study. Litehouse Glass can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Litehouse Glass to increase its market reach. Litehouse Glass will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Litehouse Glass 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Litehouse Glass 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 Litehouse Glass 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Litehouse Glass can use these opportunities to build new business models that can help the communities that Litehouse Glass operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Litehouse Foods: The Glass Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Litehouse Foods: The Glass Dilemma are -
High dependence on third party suppliers
– Litehouse Glass 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.
Stagnating economy with rate increase
– Litehouse Glass 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Litehouse Foods: The Glass Dilemma, Litehouse Glass 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 .
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 Litehouse Glass in the Sales & Marketing sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Litehouse Glass 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 Litehouse Foods: The Glass Dilemma .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Litehouse Glass with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Litehouse Glass 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. Litehouse Glass can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Consumer confidence and its impact on Litehouse Glass 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Litehouse Glass 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.
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. Litehouse Glass 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.
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 Litehouse Glass business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Litehouse Foods: The Glass Dilemma 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 Litehouse Foods: The Glass Dilemma 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 Litehouse Foods: The Glass Dilemma 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 Litehouse Foods: The Glass Dilemma 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 Litehouse Foods: The Glass Dilemma 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 Litehouse Glass needs to make to build a sustainable competitive advantage.
