Matchstick Inc.: Word of Mouth Marketing (A) 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 (A)
Matchstick Inc. (A) case 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 (A)" 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 (A) case study are - Strategic Management Strategies, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Matchstick Inc.: Word of Mouth Marketing (A) casestudy better are - – technology disruption, geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Matchstick Inc.: Word of Mouth Marketing (A)
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 (A) 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Matchstick Inc.: Word of Mouth Marketing (A) 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 (A) | 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 (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Matchstick Inc.: Word of Mouth Marketing (A) 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.
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 (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Matchstick Ketel is one of the most innovative firm in sector. Manager in Matchstick Inc.: Word of Mouth Marketing (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
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.
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 (A) 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.
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 (A) 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.
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.
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 recruit top talent
– Matchstick Ketel is one of the leading recruiters in the industry. Managers in the Matchstick Inc.: Word of Mouth Marketing (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Matchstick Inc.: Word of Mouth Marketing (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Matchstick Inc.: Word of Mouth Marketing (A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Matchstick Inc.: Word of Mouth Marketing (A), 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Matchstick Inc.: Word of Mouth Marketing (A), 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.
Slow to strategic competitive environment developments
– As Matchstick Inc.: Word of Mouth Marketing (A) 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.
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 (A) should strive to include more intangible value offerings along with its core products and services.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Matchstick Inc.: Word of Mouth Marketing (A), 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.
Skills based hiring
– The stress on hiring functional specialists at Matchstick Ketel 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Matchstick Inc.: Word of Mouth Marketing (A) 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.
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 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Matchstick Inc.: Word of Mouth Marketing (A) 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 (A) | 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 (A) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Matchstick Ketel 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 Matchstick Ketel to hire the very best people irrespective of their geographical location.
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.
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.
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 (A) 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.
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.
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.
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.
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.
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 (A) - 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.
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.
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.
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.
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 (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Matchstick Inc.: Word of Mouth Marketing (A) 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 (A) are -
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.
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.
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 (A) .
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.
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.
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.
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.
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.
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.
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.
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.
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 (A), 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 .
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.
Weighted SWOT Analysis of Matchstick Inc.: Word of Mouth Marketing (A) 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 (A) 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 (A) 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 (A) 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 (A) 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.