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 - – technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization, talent flight as more people leaving formal jobs,
increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, 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.
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.
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.
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.
Successful track record of launching new products
– Matchstick Ketel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Matchstick Ketel has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
Superior customer experience
– The customer experience strategy of Matchstick Ketel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
High switching costs
– The high switching costs that Matchstick Ketel 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.
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 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Matchstick Inc.: Word of Mouth Marketing (B), in the dynamic environment Matchstick Ketel has struggled to respond to the nimble upstart competition. Matchstick Ketel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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 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.
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.
Aligning sales with marketing
– It come across in the case study Matchstick Inc.: Word of Mouth Marketing (B) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Matchstick Inc.: Word of Mouth Marketing (B) can leverage the sales team experience to cultivate customer relationships as Matchstick Ketel is planning to shift buying processes online.
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.
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 -
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.
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.
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.
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.
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. Matchstick Ketel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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. Matchstick Ketel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Manufacturing automation
– Matchstick Ketel 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Matchstick Ketel 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.
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 -
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.
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.
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. Matchstick Ketel 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.
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.
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.
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.
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.
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) .
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.
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.
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 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.
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.
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.