Case Study Description of Cerveceria Polar: The Bear Awakens
Founded in 1941, CervecerA?a Polar had kept its position as absolute market leader in beer production and distribution in Venezuela with its traditional Pilsen for over sixty years. In 1997, it introduced its Polar Light beer, which was well received on the market. However, in November 2001, CervecerA?a Regional launched its new Light beer, which soon became a challenge to the market leader. This new product met consumersA? expectations: a light, soft beer packaged in a transparent glass bottle that helped reinforce its attributes. A few months after its launching, it had already achieved 25% market share in the light category. To respond to the threat posed by Regional Light, Polar management awaited its new Chief Marketing Officer for the Beer and Malt Strategic Unit, Cesar Menendez, to recommend future actions aimed at maintaining the companyA?s leadership position. What action plan would you recommend at the strategic planning meeting? IESA's case collection
Swot Analysis of "Cerveceria Polar: The Bear Awakens" written by Sofia Esqueda, Raquel Puente includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Polar Beer facing as an external strategic factors. Some of the topics covered in Cerveceria Polar: The Bear Awakens case study are - Strategic Management Strategies, Market research and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cerveceria Polar: The Bear Awakens casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing government debt because of Covid-19 spendings, increasing energy prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, cloud computing is disrupting traditional business models,
banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Cerveceria Polar: The Bear Awakens
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cerveceria Polar: The Bear Awakens case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Polar Beer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Polar Beer 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 Cerveceria Polar: The Bear Awakens can be done for the following purposes –
1. Strategic planning using facts provided in Cerveceria Polar: The Bear Awakens case study
2. Improving business portfolio management of Polar Beer
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 Polar Beer
Strengths Cerveceria Polar: The Bear Awakens | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Polar Beer in Cerveceria Polar: The Bear Awakens Harvard Business Review case study are -
Ability to lead change in Sales & Marketing field
– Polar Beer 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 Polar Beer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Polar Beer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Polar Beer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Polar Beer 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.
Low bargaining power of suppliers
– Suppliers of Polar Beer in the sector have low bargaining power. Cerveceria Polar: The Bear Awakens has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Polar Beer to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Polar Beer 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 Sofia Esqueda, Raquel Puente 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.
Successful track record of launching new products
– Polar Beer has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Polar Beer 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.
Innovation driven organization
– Polar Beer is one of the most innovative firm in sector. Manager in Cerveceria Polar: The Bear Awakens Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Polar Beer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Polar Beer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Polar Beer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Polar Beer 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 Cerveceria Polar: The Bear Awakens HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Polar Beer 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 Cerveceria Polar: The Bear Awakens - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Polar Beer is present in almost all the verticals within the industry. This has provided firm in Cerveceria Polar: The Bear Awakens 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.
Weaknesses Cerveceria Polar: The Bear Awakens | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cerveceria Polar: The Bear Awakens are -
Interest costs
– Compare to the competition, Polar Beer 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cerveceria Polar: The Bear Awakens, in the dynamic environment Polar Beer has struggled to respond to the nimble upstart competition. Polar Beer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cerveceria Polar: The Bear Awakens 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 Polar Beer has relatively successful track record of launching new products.
Need for greater diversity
– Polar Beer 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 Cerveceria Polar: The Bear Awakens 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 Polar Beer 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Polar Beer, firm in the HBR case study Cerveceria Polar: The Bear Awakens needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cerveceria Polar: The Bear Awakens, it seems that the employees of Polar Beer 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Polar Beer is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cerveceria Polar: The Bear Awakens 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
Polar Beer 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.
Skills based hiring
– The stress on hiring functional specialists at Polar Beer 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.
Slow to strategic competitive environment developments
– As Cerveceria Polar: The Bear Awakens HBR case study mentions - Polar Beer 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.
Opportunities Cerveceria Polar: The Bear Awakens | 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 Cerveceria Polar: The Bear Awakens are -
Using analytics as competitive advantage
– Polar Beer 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 Cerveceria Polar: The Bear Awakens - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Polar Beer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Polar Beer can use these opportunities to build new business models that can help the communities that Polar Beer operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Polar Beer in the consumer business. Now Polar Beer can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Polar Beer 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.
Leveraging digital technologies
– Polar Beer 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Polar Beer can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Polar Beer 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 Polar Beer to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Polar Beer 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
– Polar Beer 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.
Creating value in data economy
– The success of analytics program of Polar Beer has opened avenues for new revenue streams for the organization in the industry. This can help Polar Beer to build a more holistic ecosystem as suggested in the Cerveceria Polar: The Bear Awakens case study. Polar Beer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Polar Beer 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, Cerveceria Polar: The Bear Awakens, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Polar Beer 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Polar Beer can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Polar Beer can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Cerveceria Polar: The Bear Awakens External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cerveceria Polar: The Bear Awakens are -
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 Polar Beer.
Stagnating economy with rate increase
– Polar Beer 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.
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. Polar Beer 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.
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.
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. Polar Beer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Polar Beer needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Polar Beer has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Polar Beer 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
– Polar Beer 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.
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 Polar Beer business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Polar Beer is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Polar Beer 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.
Regulatory challenges
– Polar Beer 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.
Increasing wage structure of Polar Beer
– 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 Polar Beer.
Weighted SWOT Analysis of Cerveceria Polar: The Bear Awakens 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 Cerveceria Polar: The Bear Awakens 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 Cerveceria Polar: The Bear Awakens 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 Cerveceria Polar: The Bear Awakens 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 Cerveceria Polar: The Bear Awakens 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 Polar Beer needs to make to build a sustainable competitive advantage.
