Matchstick Inc.: Word of Mouth Marketing (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Matchstick Inc.: Word of Mouth Marketing (B)
This is a supplement to Matchstick Inc. (A), product 910A19. The cases introduces students to how brands are starting to put in place non-traditional advertising, such as word-of-mouth campaigns. The founder of Toronto-based Matchstick Inc. is working on a campaign for the Ketel One vodka brand. Ketel One, managed by Diageo, a global beverage firm, is trying to increase its awareness and sales in the Canadian market. Ketel One's brand manager has turned to Matchstick to generate awareness among its elusive target audience.
Swot Analysis of "Matchstick Inc.: Word of Mouth Marketing (B)" written by Ken Mark, Allison Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Matchstick Ketel facing as an external strategic factors. Some of the topics covered in Matchstick Inc.: Word of Mouth Marketing (B) case study are - Strategic Management Strategies, Marketing, Pricing, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Matchstick Inc.: Word of Mouth Marketing (B) casestudy better are - – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, wage bills are increasing, technology disruption,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Matchstick Inc.: Word of Mouth Marketing (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Matchstick Inc.: Word of Mouth Marketing (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Matchstick Ketel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Matchstick Ketel 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 Matchstick Inc.: Word of Mouth Marketing (B) can be done for the following purposes –
1. Strategic planning using facts provided in Matchstick Inc.: Word of Mouth Marketing (B) case study
2. Improving business portfolio management of Matchstick Ketel
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 Matchstick Ketel
Strengths Matchstick Inc.: Word of Mouth Marketing (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Matchstick Ketel in Matchstick Inc.: Word of Mouth Marketing (B) Harvard Business Review case study are -
Diverse revenue streams
– Matchstick Ketel is present in almost all the verticals within the industry. This has provided firm in Matchstick Inc.: Word of Mouth Marketing (B) 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.
Cross disciplinary teams
– Horizontal connected teams at the Matchstick Ketel 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.
Ability to lead change in Sales & Marketing field
– Matchstick Ketel 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 Matchstick Ketel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Matchstick Ketel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Matchstick Inc.: Word of Mouth Marketing (B) 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.
Innovation driven organization
– Matchstick Ketel is one of the most innovative firm in sector. Manager in Matchstick Inc.: Word of Mouth Marketing (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Matchstick Ketel 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 Matchstick Ketel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Matchstick Inc.: Word of Mouth Marketing (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Matchstick Ketel in the sector have low bargaining power. Matchstick Inc.: Word of Mouth Marketing (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Matchstick Ketel to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Matchstick Ketel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Matchstick Ketel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Matchstick Ketel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Matchstick Ketel 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.
Highly skilled collaborators
– Matchstick Ketel 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 Matchstick Inc.: Word of Mouth Marketing (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Matchstick Ketel is one of the leading recruiters in the industry. Managers in the Matchstick Inc.: Word of Mouth Marketing (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– Matchstick Inc.: Word of Mouth Marketing (B) firm has clearly differentiated products in the market place. This has enabled Matchstick Ketel to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Matchstick Ketel to invest into research and development (R&D) and innovation.
Weaknesses Matchstick Inc.: Word of Mouth Marketing (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Matchstick Inc.: Word of Mouth Marketing (B) are -
Slow to strategic competitive environment developments
– As Matchstick Inc.: Word of Mouth Marketing (B) HBR case study mentions - Matchstick Ketel 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 Matchstick Inc.: Word of Mouth Marketing (B), 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ken Mark, Allison Johnson suggests that, Matchstick Ketel 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Ketel has relatively successful track record of launching new products.
Products dominated business model
– Even though Matchstick Ketel 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 - Matchstick Inc.: Word of Mouth Marketing (B) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Matchstick Ketel is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Matchstick Ketel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Matchstick Ketel to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Matchstick Ketel 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Ketel 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Matchstick Ketel, firm in the HBR case study Matchstick Inc.: Word of Mouth Marketing (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Matchstick Ketel products
– To increase the profitability and margins on the products, Matchstick Ketel needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Matchstick Ketel supply chain. Even after few cautionary changes mentioned in the HBR case study - Matchstick Inc.: Word of Mouth Marketing (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Matchstick Ketel vulnerable to further global disruptions in South East Asia.
Opportunities Matchstick Inc.: Word of Mouth Marketing (B) | 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 Matchstick Inc.: Word of Mouth Marketing (B) are -
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 Matchstick Ketel 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.
Creating value in data economy
– The success of analytics program of Matchstick Ketel has opened avenues for new revenue streams for the organization in the industry. This can help Matchstick Ketel to build a more holistic ecosystem as suggested in the Matchstick Inc.: Word of Mouth Marketing (B) case study. Matchstick Ketel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Matchstick Ketel 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Matchstick Ketel 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Matchstick Ketel 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, Matchstick Inc.: Word of Mouth Marketing (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Matchstick Ketel 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 Matchstick Inc.: Word of Mouth Marketing (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Matchstick Ketel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Matchstick Ketel in the consumer business. Now Matchstick Ketel can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Matchstick Ketel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Matchstick Ketel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Matchstick Inc.: Word of Mouth Marketing (B) 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.
Loyalty marketing
– Matchstick Ketel 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.
Developing new processes and practices
– Matchstick Ketel 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.
Learning at scale
– Online learning technologies has now opened space for Matchstick Ketel 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.
Leveraging digital technologies
– Matchstick Ketel 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.
Threats Matchstick Inc.: Word of Mouth Marketing (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Matchstick Inc.: Word of Mouth Marketing (B) are -
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 Matchstick Ketel in the Sales & Marketing sector and impact the bottomline of the organization.
Environmental challenges
– Matchstick Ketel 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. Matchstick Ketel can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Regulatory challenges
– Matchstick Ketel 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 Matchstick Ketel
– 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 Matchstick Ketel.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Matchstick Inc.: Word of Mouth Marketing (B), Matchstick Ketel 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 acceleration in Forth Industrial Revolution
– Matchstick Ketel has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Matchstick Ketel 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.
Shortening product life cycle
– it is one of the major threat that Matchstick Ketel is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Matchstick Ketel needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Matchstick Ketel.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Matchstick Ketel in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Matchstick Ketel 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 Matchstick Inc.: Word of Mouth Marketing (B) .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Matchstick Ketel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Inc.: Word of Mouth Marketing (B) 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 Matchstick Ketel needs to make to build a sustainable competitive advantage.
