The Munich Oktoberfest: From Local Tradition to Global Capitalism SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Munich Oktoberfest: From Local Tradition to Global Capitalism
Oktoberfest, an annual festival held in Munich (Germany) for more than 200 years, has grown in recent decades into a hugely popular event that attracts 7 million visitors annually, a large proportion of which are foreign. In fact, Oktoberfest's global appeal is so strong that hundreds of copycat Oktoberfest events exist in cities as diverse as Cincinnati (U.S.), Bangalore (India), Beijing (China), and Blumenau (Brazil). The case provides information about the economic value Oktoberfest generates for its main players: the city of Munich, the breweries, the souvenir and merchandise stands, and the firms that provide rides. It then asks whether there are unexploited opportunities to capture more value from Oktoberfest globally.
Authors :: Juan Alcacer, Christian Bettinger, Andreas Philippi
Swot Analysis of "The Munich Oktoberfest: From Local Tradition to Global Capitalism" written by Juan Alcacer, Christian Bettinger, Andreas Philippi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oktoberfest Munich facing as an external strategic factors. Some of the topics covered in The Munich Oktoberfest: From Local Tradition to Global Capitalism case study are - Strategic Management Strategies, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Munich Oktoberfest: From Local Tradition to Global Capitalism casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels,
increasing transportation and logistics costs, wage bills are increasing, etc
Introduction to SWOT Analysis of The Munich Oktoberfest: From Local Tradition to Global Capitalism
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Munich Oktoberfest: From Local Tradition to Global Capitalism case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oktoberfest Munich, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oktoberfest Munich 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism can be done for the following purposes –
1. Strategic planning using facts provided in The Munich Oktoberfest: From Local Tradition to Global Capitalism case study
2. Improving business portfolio management of Oktoberfest Munich
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oktoberfest Munich
Strengths The Munich Oktoberfest: From Local Tradition to Global Capitalism | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oktoberfest Munich in The Munich Oktoberfest: From Local Tradition to Global Capitalism Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Oktoberfest Munich in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Oktoberfest Munich has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oktoberfest Munich 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.
Ability to lead change in Strategy & Execution field
– Oktoberfest Munich 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 Oktoberfest Munich in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Oktoberfest Munich in the sector have low bargaining power. The Munich Oktoberfest: From Local Tradition to Global Capitalism has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oktoberfest Munich to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Oktoberfest Munich 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 Juan Alcacer, Christian Bettinger, Andreas Philippi 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.
Operational resilience
– The operational resilience strategy in the The Munich Oktoberfest: From Local Tradition to Global Capitalism 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.
Cross disciplinary teams
– Horizontal connected teams at the Oktoberfest Munich 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.
Effective Research and Development (R&D)
– Oktoberfest Munich 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Oktoberfest Munich 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.
Training and development
– Oktoberfest Munich has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Munich Oktoberfest: From Local Tradition to Global Capitalism 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.
Highly skilled collaborators
– Oktoberfest Munich 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Oktoberfest Munich is one of the most innovative firm in sector. Manager in The Munich Oktoberfest: From Local Tradition to Global Capitalism Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses The Munich Oktoberfest: From Local Tradition to Global Capitalism | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Munich Oktoberfest: From Local Tradition to Global Capitalism are -
No frontier risks strategy
– After analyzing the HBR case study The Munich Oktoberfest: From Local Tradition to Global Capitalism, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism, it seems that the employees of Oktoberfest Munich 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.
Increasing silos among functional specialists
– The organizational structure of Oktoberfest Munich is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Oktoberfest Munich needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oktoberfest Munich to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Oktoberfest Munich 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 - The Munich Oktoberfest: From Local Tradition to Global Capitalism should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Oktoberfest Munich has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Oktoberfest Munich 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. Oktoberfest Munich 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.
Lack of clear differentiation of Oktoberfest Munich products
– To increase the profitability and margins on the products, Oktoberfest Munich needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Oktoberfest Munich, firm in the HBR case study The Munich Oktoberfest: From Local Tradition to Global Capitalism needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Oktoberfest Munich has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Munich Oktoberfest: From Local Tradition to Global Capitalism, in the dynamic environment Oktoberfest Munich has struggled to respond to the nimble upstart competition. Oktoberfest Munich has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Oktoberfest Munich is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Munich Oktoberfest: From Local Tradition to Global Capitalism can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities The Munich Oktoberfest: From Local Tradition to Global Capitalism | 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism are -
Loyalty marketing
– Oktoberfest Munich 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oktoberfest Munich 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, The Munich Oktoberfest: From Local Tradition to Global Capitalism, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Oktoberfest Munich in the consumer business. Now Oktoberfest Munich can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Oktoberfest Munich can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Oktoberfest Munich can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Creating value in data economy
– The success of analytics program of Oktoberfest Munich has opened avenues for new revenue streams for the organization in the industry. This can help Oktoberfest Munich to build a more holistic ecosystem as suggested in the The Munich Oktoberfest: From Local Tradition to Global Capitalism case study. Oktoberfest Munich can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Oktoberfest Munich can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Oktoberfest Munich can use these opportunities to build new business models that can help the communities that Oktoberfest Munich operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oktoberfest Munich 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. Oktoberfest Munich 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.
Better consumer reach
– The expansion of the 5G network will help Oktoberfest Munich to increase its market reach. Oktoberfest Munich 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
– Oktoberfest Munich can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Munich Oktoberfest: From Local Tradition to Global Capitalism 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.
Developing new processes and practices
– Oktoberfest Munich can develop new processes and procedures in Strategy & Execution 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.
Leveraging digital technologies
– Oktoberfest Munich 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Munich Oktoberfest: From Local Tradition to Global Capitalism are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oktoberfest Munich 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism .
Stagnating economy with rate increase
– Oktoberfest Munich 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.
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. Oktoberfest Munich 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 Oktoberfest Munich 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.
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.
Environmental challenges
– Oktoberfest Munich 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. Oktoberfest Munich can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Oktoberfest Munich 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
– Oktoberfest Munich has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Oktoberfest Munich needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Oktoberfest Munich business can come under increasing regulations regarding data privacy, data security, 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 Oktoberfest Munich in the Strategy & Execution sector and impact the bottomline of the organization.
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. Oktoberfest Munich needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oktoberfest Munich can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Oktoberfest Munich.
Weighted SWOT Analysis of The Munich Oktoberfest: From Local Tradition to Global Capitalism 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism 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 The Munich Oktoberfest: From Local Tradition to Global Capitalism 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 Oktoberfest Munich needs to make to build a sustainable competitive advantage.