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 - – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, there is backlash against globalization, 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 -
Superior customer experience
– The customer experience strategy of Polar Beer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Ability to recruit top talent
– Polar Beer is one of the leading recruiters in the industry. Managers in the Cerveceria Polar: The Bear Awakens are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Polar Beer 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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
Lack of clear differentiation of Polar Beer products
– To increase the profitability and margins on the products, Polar Beer needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
No frontier risks strategy
– After analyzing the HBR case study Cerveceria Polar: The Bear Awakens, 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.
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 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 Polar Beer supply chain. Even after few cautionary changes mentioned in the HBR case study - Cerveceria Polar: The Bear Awakens, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Polar Beer vulnerable to further global disruptions in South East Asia.
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.
Products dominated business model
– Even though Polar Beer has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Cerveceria Polar: The Bear Awakens should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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 -
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.
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. Polar Beer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Polar Beer can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Polar Beer with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– 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.
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.
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.
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.
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.
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.
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.