ViniBrasil: New Latitude Wines SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ViniBrasil: New Latitude Wines
ViniBrasil is a small wine venture in Brazil started by a top Portuguese wine company, Dao Sul. ViniBrasil grows its grapes in a novel environment (close to the equator) using innovative management practices such as controlled irrigation and year-round harvesting. ViniBrasil 'Rio Sol' wines, which have received several awards, are sold mainly in Brazil where per capita wine consumption is low and there is strong competition from inexpensive imports. Dao Sul must decide how to expand the Brazilian market and also if there is international potential for the new Brazilian wines.
Authors :: David E. Bell, Marcos Fava Neves, Luciano Thome e Castro, Mary Shelman
Swot Analysis of "ViniBrasil: New Latitude Wines" written by David E. Bell, Marcos Fava Neves, Luciano Thome e Castro, Mary Shelman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vinibrasil Wines facing as an external strategic factors. Some of the topics covered in ViniBrasil: New Latitude Wines case study are - Strategic Management Strategies, Competition, Innovation and Sales & Marketing.
Some of the macro environment factors that can be used to understand the ViniBrasil: New Latitude Wines casestudy better are - – increasing commodity prices, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, technology disruption,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of ViniBrasil: New Latitude Wines
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ViniBrasil: New Latitude Wines case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vinibrasil Wines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vinibrasil Wines 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 ViniBrasil: New Latitude Wines can be done for the following purposes –
1. Strategic planning using facts provided in ViniBrasil: New Latitude Wines case study
2. Improving business portfolio management of Vinibrasil Wines
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 Vinibrasil Wines
Strengths ViniBrasil: New Latitude Wines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vinibrasil Wines in ViniBrasil: New Latitude Wines Harvard Business Review case study are -
Organizational Resilience of Vinibrasil Wines
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vinibrasil Wines does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Vinibrasil Wines is one of the leading recruiters in the industry. Managers in the ViniBrasil: New Latitude Wines are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Vinibrasil Wines is present in almost all the verticals within the industry. This has provided firm in ViniBrasil: New Latitude Wines 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.
Innovation driven organization
– Vinibrasil Wines is one of the most innovative firm in sector. Manager in ViniBrasil: New Latitude Wines Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Vinibrasil Wines 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 ViniBrasil: New Latitude Wines - 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 Vinibrasil Wines in the sector have low bargaining power. ViniBrasil: New Latitude Wines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vinibrasil Wines to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Vinibrasil Wines 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 David E. Bell, Marcos Fava Neves, Luciano Thome e Castro, Mary Shelman 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.
High switching costs
– The high switching costs that Vinibrasil Wines 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.
High brand equity
– Vinibrasil Wines has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vinibrasil Wines to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Vinibrasil Wines digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vinibrasil Wines 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.
Operational resilience
– The operational resilience strategy in the ViniBrasil: New Latitude Wines 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.
Sustainable margins compare to other players in Sales & Marketing industry
– ViniBrasil: New Latitude Wines firm has clearly differentiated products in the market place. This has enabled Vinibrasil Wines to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Vinibrasil Wines to invest into research and development (R&D) and innovation.
Weaknesses ViniBrasil: New Latitude Wines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ViniBrasil: New Latitude Wines are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ViniBrasil: New Latitude Wines, in the dynamic environment Vinibrasil Wines has struggled to respond to the nimble upstart competition. Vinibrasil Wines 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, David E. Bell, Marcos Fava Neves, Luciano Thome e Castro, Mary Shelman suggests that, Vinibrasil Wines 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vinibrasil Wines is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ViniBrasil: New Latitude Wines can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Vinibrasil Wines is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Vinibrasil Wines needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vinibrasil Wines to focus more on services rather than just following the product oriented approach.
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 Vinibrasil Wines supply chain. Even after few cautionary changes mentioned in the HBR case study - ViniBrasil: New Latitude Wines, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vinibrasil Wines vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Vinibrasil Wines has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ViniBrasil: New Latitude Wines, it seems that the employees of Vinibrasil Wines 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the ViniBrasil: New Latitude Wines 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 Vinibrasil Wines has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As ViniBrasil: New Latitude Wines HBR case study mentions - Vinibrasil Wines 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.
Low market penetration in new markets
– Outside its home market of Vinibrasil Wines, firm in the HBR case study ViniBrasil: New Latitude Wines needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Vinibrasil Wines 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.
Opportunities ViniBrasil: New Latitude Wines | 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 ViniBrasil: New Latitude Wines are -
Learning at scale
– Online learning technologies has now opened space for Vinibrasil Wines 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vinibrasil Wines 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 Vinibrasil Wines to hire the very best people irrespective of their geographical location.
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. Vinibrasil Wines can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Vinibrasil Wines 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vinibrasil Wines 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, ViniBrasil: New Latitude Wines, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vinibrasil Wines 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, Vinibrasil Wines can use these opportunities to build new business models that can help the communities that Vinibrasil Wines operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Developing new processes and practices
– Vinibrasil Wines 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.
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 Vinibrasil Wines 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vinibrasil Wines can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Vinibrasil Wines 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. Vinibrasil Wines 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
– Vinibrasil Wines 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.
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 Vinibrasil Wines in the consumer business. Now Vinibrasil Wines can target international markets with far fewer capital restrictions requirements than the existing system.
Threats ViniBrasil: New Latitude Wines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ViniBrasil: New Latitude Wines are -
Consumer confidence and its impact on Vinibrasil Wines 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.
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. Vinibrasil Wines 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vinibrasil Wines 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.
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 Vinibrasil Wines business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Vinibrasil Wines has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Vinibrasil Wines 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.
Increasing wage structure of Vinibrasil Wines
– 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 Vinibrasil Wines.
Environmental challenges
– Vinibrasil Wines 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. Vinibrasil Wines 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 ViniBrasil: New Latitude Wines, Vinibrasil Wines 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 .
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. Vinibrasil Wines needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Vinibrasil Wines 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.
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 Vinibrasil Wines in the Sales & Marketing sector and impact the bottomline of the organization.
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. Vinibrasil Wines can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Vinibrasil Wines 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 ViniBrasil: New Latitude Wines 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 ViniBrasil: New Latitude Wines 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 ViniBrasil: New Latitude Wines 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 ViniBrasil: New Latitude Wines 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 ViniBrasil: New Latitude Wines 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 Vinibrasil Wines needs to make to build a sustainable competitive advantage.