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 - – increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
wage bills are increasing, increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
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 (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Sustainable margins compare to other players in Sales & Marketing industry
– Matchstick Inc.: Word of Mouth Marketing (A) 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.
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.
Low bargaining power of suppliers
– Suppliers of Matchstick Ketel in the sector have low bargaining power. Matchstick Inc.: Word of Mouth Marketing (A) 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.
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.
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 (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 -
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.
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 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.
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.
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 (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential 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 (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Matchstick Inc.: Word of Mouth Marketing (A), 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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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 (A) 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.
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.
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.
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.
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.
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.
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.
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.
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 -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Matchstick Ketel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– 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.
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.
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.
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.
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.
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.
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.
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.
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) .
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.
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.
