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 - – central banks are concerned over increasing inflation, technology disruption, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
increasing government debt because of Covid-19 spendings, 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 -
Effective Research and Development (R&D)
– Matchstick Ketel 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 Matchstick Inc.: Word of Mouth Marketing (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– 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.
Operational resilience
– The operational resilience strategy in the Matchstick Inc.: Word of Mouth Marketing (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
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.
Organizational Resilience of Matchstick Ketel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Matchstick Ketel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Matchstick Ketel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Matchstick Ketel 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 Ken Mark, Allison Johnson 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.
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.
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.
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 -
Interest costs
– Compare to the competition, Matchstick Ketel 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.
Need for greater diversity
– Matchstick Ketel has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Slow decision making process
– As mentioned earlier in the report, Matchstick Ketel 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. Matchstick Ketel 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.
High cash cycle compare to competitors
Matchstick Ketel has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Matchstick Ketel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Matchstick Inc.: Word of Mouth Marketing (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Matchstick Inc.: Word of Mouth Marketing (B), it seems that the employees of Matchstick Ketel don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Matchstick Inc.: Word of Mouth Marketing (B), is just above the industry average. Matchstick Ketel 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.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Matchstick Ketel is facing challenges because of the dominance of functional experts in the organization. Matchstick Inc.: Word of Mouth Marketing (B) 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Matchstick Ketel to increase its market reach. Matchstick Ketel 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.
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.
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.
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.
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.
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. Matchstick Ketel 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. Matchstick Ketel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Matchstick Ketel can use these opportunities to build new business models that can help the communities that Matchstick Ketel operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Matchstick Ketel in the consumer business. Now Matchstick Ketel can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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 -
Consumer confidence and its impact on Matchstick Ketel 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.
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.
High dependence on third party suppliers
– Matchstick Ketel high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Matchstick Ketel business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Matchstick Ketel 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 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) .
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 .
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.