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 - – increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is backlash against globalization, geopolitical disruptions, 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 -
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.
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.
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.
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.
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.
Training and development
– Polar Beer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cerveceria Polar: The Bear Awakens 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.
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.
Sustainable margins compare to other players in Sales & Marketing industry
– Cerveceria Polar: The Bear Awakens firm has clearly differentiated products in the market place. This has enabled Polar Beer to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Polar Beer to invest into research and development (R&D) and innovation.
Learning organization
- Polar Beer 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 Polar Beer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cerveceria Polar: The Bear Awakens Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Polar Beer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Polar Beer 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.
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 -
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.
Aligning sales with marketing
– It come across in the case study Cerveceria Polar: The Bear Awakens that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cerveceria Polar: The Bear Awakens can leverage the sales team experience to cultivate customer relationships as Polar Beer is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cerveceria Polar: The Bear Awakens, is just above the industry average. Polar Beer 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.
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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Sofia Esqueda, Raquel Puente suggests that, Polar Beer 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.
Slow decision making process
– As mentioned earlier in the report, Polar Beer has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Polar Beer even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Polar Beer is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Polar Beer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Polar Beer to focus more on services rather than just following the product oriented approach.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Polar Beer is facing challenges because of the dominance of functional experts in the organization. Cerveceria Polar: The Bear Awakens case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
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 Polar Beer 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.
Building a culture of innovation
– managers at Polar Beer 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.
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.
Buying journey improvements
– Polar Beer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cerveceria Polar: The Bear Awakens 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Polar Beer 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.
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.
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.
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 -
Environmental challenges
– Polar Beer 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. Polar Beer can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cerveceria Polar: The Bear Awakens, Polar Beer 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 .
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.
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.
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 Polar Beer in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Polar Beer 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 Cerveceria Polar: The Bear Awakens .
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.