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 - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, technology disruption,
increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, 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 -
Training and development
– Vinibrasil Wines has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ViniBrasil: New Latitude Wines 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 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.
Ability to lead change in Sales & Marketing field
– Vinibrasil Wines 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 Vinibrasil Wines in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Highly skilled collaborators
– Vinibrasil Wines has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in ViniBrasil: New Latitude Wines HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Cross disciplinary teams
– Horizontal connected teams at the Vinibrasil Wines 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.
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.
Strong track record of project management
– Vinibrasil Wines is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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 -
Products dominated business model
– Even though Vinibrasil Wines 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 - ViniBrasil: New Latitude Wines should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study ViniBrasil: New Latitude Wines, 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.
High operating costs
– Compare to the competitors, firm in the HBR case study ViniBrasil: New Latitude Wines 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 Vinibrasil Wines 's lucrative customers.
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.
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 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ViniBrasil: New Latitude Wines, is just above the industry average. Vinibrasil Wines 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Vinibrasil Wines needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 -
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. Vinibrasil Wines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Vinibrasil Wines can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ViniBrasil: New Latitude Wines 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vinibrasil Wines is facing challenges because of the dominance of functional experts in the organization. ViniBrasil: New Latitude Wines 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.
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.
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.
Using analytics as competitive advantage
– Vinibrasil Wines 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 ViniBrasil: New Latitude Wines - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vinibrasil Wines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vinibrasil Wines 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.
Building a culture of innovation
– managers at Vinibrasil Wines 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.
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.
Creating value in data economy
– The success of analytics program of Vinibrasil Wines has opened avenues for new revenue streams for the organization in the industry. This can help Vinibrasil Wines to build a more holistic ecosystem as suggested in the ViniBrasil: New Latitude Wines case study. Vinibrasil Wines can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 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.
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.
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 -
High dependence on third party suppliers
– Vinibrasil Wines 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vinibrasil Wines 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 ViniBrasil: New Latitude Wines .
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.