Tea and Sustainability at Unilever: Turning Over a New Leaf (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tea and Sustainability at Unilever: Turning Over a New Leaf (A)
Michiel Leijnse, global brand development director of Lipton Tea, faces a very important meeting with Unilever CEO Patrick Cescau in a few short hours, during which he will recommend strategies on how Lipton can become credible with consumers, obtain sustainable certification, integrate sustainable practices into its entire supply chain, and tell customers about it. He has to consider the financial implications of the decision and demonstrate a reasonable return on investment. Would there be a first-mover advantage for Unilever or would the company be paving the way for its competitors to sustainably source tea without the investment? He would also have to recommend a certification agency and craft a plan for implementation of the change.
Swot Analysis of "Tea and Sustainability at Unilever: Turning Over a New Leaf (A)" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tea Unilever facing as an external strategic factors. Some of the topics covered in Tea and Sustainability at Unilever: Turning Over a New Leaf (A) case study are - Strategic Management Strategies, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tea and Sustainability at Unilever: Turning Over a New Leaf (A) casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, wage bills are increasing,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Tea and Sustainability at Unilever: Turning Over a New Leaf (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tea and Sustainability at Unilever: Turning Over a New Leaf (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tea Unilever, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tea Unilever 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 Tea and Sustainability at Unilever: Turning Over a New Leaf (A) can be done for the following purposes –
1. Strategic planning using facts provided in Tea and Sustainability at Unilever: Turning Over a New Leaf (A) case study
2. Improving business portfolio management of Tea Unilever
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 Tea Unilever
Strengths Tea and Sustainability at Unilever: Turning Over a New Leaf (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tea Unilever in Tea and Sustainability at Unilever: Turning Over a New Leaf (A) Harvard Business Review case study are -
High switching costs
– The high switching costs that Tea Unilever 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.
Innovation driven organization
– Tea Unilever is one of the most innovative firm in sector. Manager in Tea and Sustainability at Unilever: Turning Over a New Leaf (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Tea and Sustainability at Unilever: Turning Over a New Leaf (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Strategy & Execution industry
– Tea and Sustainability at Unilever: Turning Over a New Leaf (A) firm has clearly differentiated products in the market place. This has enabled Tea Unilever to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tea Unilever to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Tea Unilever 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 Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Strategy & Execution segment
- digital transformation varies from industry to industry. For Tea Unilever digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tea Unilever 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.
High brand equity
– Tea Unilever has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tea Unilever to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Tea Unilever 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 Tea Unilever in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Tea Unilever has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tea Unilever 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.
Diverse revenue streams
– Tea Unilever is present in almost all the verticals within the industry. This has provided firm in Tea and Sustainability at Unilever: Turning Over a New Leaf (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.
Cross disciplinary teams
– Horizontal connected teams at the Tea Unilever 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.
Strong track record of project management
– Tea Unilever is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Tea and Sustainability at Unilever: Turning Over a New Leaf (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tea and Sustainability at Unilever: Turning Over a New Leaf (A) are -
Aligning sales with marketing
– It come across in the case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Tea and Sustainability at Unilever: Turning Over a New Leaf (A) can leverage the sales team experience to cultivate customer relationships as Tea Unilever is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Tea Unilever 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. Tea Unilever 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.
Skills based hiring
– The stress on hiring functional specialists at Tea Unilever 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.
No frontier risks strategy
– After analyzing the HBR case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A), 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea Unilever 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A), in the dynamic environment Tea Unilever has struggled to respond to the nimble upstart competition. Tea Unilever has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A), it seems that the employees of Tea Unilever 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 Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea Unilever has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A), is just above the industry average. Tea Unilever 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.
Lack of clear differentiation of Tea Unilever products
– To increase the profitability and margins on the products, Tea Unilever needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Tea Unilever is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tea Unilever needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tea Unilever to focus more on services rather than just following the product oriented approach.
Opportunities Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea and Sustainability at Unilever: Turning Over a New Leaf (A) are -
Creating value in data economy
– The success of analytics program of Tea Unilever has opened avenues for new revenue streams for the organization in the industry. This can help Tea Unilever to build a more holistic ecosystem as suggested in the Tea and Sustainability at Unilever: Turning Over a New Leaf (A) case study. Tea Unilever can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Tea Unilever 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 Tea Unilever in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution 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, Tea Unilever can use these opportunities to build new business models that can help the communities that Tea Unilever operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Tea Unilever 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.
Better consumer reach
– The expansion of the 5G network will help Tea Unilever to increase its market reach. Tea Unilever 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.
Leveraging digital technologies
– Tea Unilever 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.
Manufacturing automation
– Tea Unilever 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.
Buying journey improvements
– Tea Unilever can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tea and Sustainability at Unilever: Turning Over a New Leaf (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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tea Unilever 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.
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. Tea Unilever can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Tea Unilever 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tea Unilever 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 Tea Unilever to hire the very best people irrespective of their geographical location.
Threats Tea and Sustainability at Unilever: Turning Over a New Leaf (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tea Unilever with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Tea Unilever 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.
Consumer confidence and its impact on Tea Unilever 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tea and Sustainability at Unilever: Turning Over a New Leaf (A), Tea Unilever may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Regulatory challenges
– Tea Unilever 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 Strategy & Execution industry regulations.
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. Tea Unilever 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 Tea Unilever.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tea Unilever 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 Tea and Sustainability at Unilever: Turning Over a New Leaf (A) .
Technology acceleration in Forth Industrial Revolution
– Tea Unilever has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tea Unilever 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.
Shortening product life cycle
– it is one of the major threat that Tea Unilever is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Tea Unilever 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.
Increasing wage structure of Tea Unilever
– 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 Tea Unilever.
Environmental challenges
– Tea Unilever 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. Tea Unilever can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea and Sustainability at Unilever: Turning Over a New Leaf (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 Tea Unilever needs to make to build a sustainable competitive advantage.