Case Study Description of Advantage Food & Beverage Vending
Advantage Food & Beverage Vending is a decision-based case that highlights four options for the owner and president of the Advantage Food & Beverage (AF&B) snack vending operation. He had been running his business for 16 years and possessed a great deal of knowledge of his company and the vending industry. His dilemma was whether or not to invest in his existing operation and, if so, determining the best use of his resources. The vending industry was stagnant and considered to be declining, which complicated his decision. However, newer technologies became available that could improve AF&B's competitive advantage in the marketplace. Technology options included a system that (a) accepted electronic payments and (b) tracked inventory and transactions. The electronic payment method came in the form of the traditional swiping of a credit card, or in the newer form of Touch-and-Go card readers. These features could be retrofitted to existing machines or come built into new machines. The decision involved which option(s) would likely provide the president with the best return on his investment.
Swot Analysis of "Advantage Food & Beverage Vending" written by Michael A Levin, Bruce C Bailey includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vending Af facing as an external strategic factors. Some of the topics covered in Advantage Food & Beverage Vending case study are - Strategic Management Strategies, Competitive strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Advantage Food & Beverage Vending casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, increasing household debt because of falling income levels, increasing commodity prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Advantage Food & Beverage Vending
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Advantage Food & Beverage Vending case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vending Af, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vending Af 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 Advantage Food & Beverage Vending can be done for the following purposes –
1. Strategic planning using facts provided in Advantage Food & Beverage Vending case study
2. Improving business portfolio management of Vending Af
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 Vending Af
Strengths Advantage Food & Beverage Vending | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vending Af in Advantage Food & Beverage Vending Harvard Business Review case study are -
Diverse revenue streams
– Vending Af is present in almost all the verticals within the industry. This has provided firm in Advantage Food & Beverage Vending 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Advantage Food & Beverage Vending firm has clearly differentiated products in the market place. This has enabled Vending Af to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Vending Af to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Vending Af in the sector have low bargaining power. Advantage Food & Beverage Vending has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vending Af to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Vending Af 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.
Organizational Resilience of Vending Af
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vending Af does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Vending Af 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 Advantage Food & Beverage Vending - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Vending Af in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Vending Af is one of the leading recruiters in the industry. Managers in the Advantage Food & Beverage Vending are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Vending Af digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vending Af 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.
Learning organization
- Vending Af 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 Vending Af is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Advantage Food & Beverage Vending Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Vending Af 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 Advantage Food & Beverage Vending 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
– Vending Af 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 Vending Af in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Advantage Food & Beverage Vending | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Advantage Food & Beverage Vending are -
High operating costs
– Compare to the competitors, firm in the HBR case study Advantage Food & Beverage Vending 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 Vending Af 's lucrative customers.
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 Vending Af supply chain. Even after few cautionary changes mentioned in the HBR case study - Advantage Food & Beverage Vending, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vending Af vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Vending Af is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Vending Af needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vending Af 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, Vending Af 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.
Interest costs
– Compare to the competition, Vending Af 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.
Lack of clear differentiation of Vending Af products
– To increase the profitability and margins on the products, Vending Af needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Vending Af 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.
Capital Spending Reduction
– Even during the low interest decade, Vending Af 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.
Low market penetration in new markets
– Outside its home market of Vending Af, firm in the HBR case study Advantage Food & Beverage Vending needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vending Af is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Advantage Food & Beverage Vending can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Advantage Food & Beverage Vending, in the dynamic environment Vending Af has struggled to respond to the nimble upstart competition. Vending Af has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Advantage Food & Beverage Vending | 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 Advantage Food & Beverage Vending are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vending Af 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.
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. Vending Af can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Vending Af to increase its market reach. Vending Af 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.
Buying journey improvements
– Vending Af can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Advantage Food & Beverage Vending 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vending Af 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, Advantage Food & Beverage Vending, 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
– Vending Af 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vending Af 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 Vending Af to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Vending Af 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.
Developing new processes and practices
– Vending Af 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.
Leveraging digital technologies
– Vending Af 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, Vending Af 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.
Learning at scale
– Online learning technologies has now opened space for Vending Af 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.
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 Vending Af in the consumer business. Now Vending Af can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Advantage Food & Beverage Vending External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Advantage Food & Beverage Vending are -
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.
High dependence on third party suppliers
– Vending Af 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vending Af 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 Advantage Food & Beverage Vending .
Consumer confidence and its impact on Vending Af 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.
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. Vending Af needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vending Af with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Vending Af 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.
Shortening product life cycle
– it is one of the major threat that Vending Af is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Vending Af 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. Vending Af can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Vending Af business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Vending Af 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.
Increasing wage structure of Vending Af
– 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 Vending Af.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Advantage Food & Beverage Vending, Vending Af 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 .
Weighted SWOT Analysis of Advantage Food & Beverage Vending 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 Advantage Food & Beverage Vending 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 Advantage Food & Beverage Vending 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 Advantage Food & Beverage Vending 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 Advantage Food & Beverage Vending 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 Vending Af needs to make to build a sustainable competitive advantage.