AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale
AmBev, the merger of the two largest Brazilian beverage companies (Brahma and Antarctica) wants to become a strong South American multinational, able to compete with the main global players in this sector. AmBev creation process raised an important polemic. Competitors said AmBev would have a monopolistic power (controls about 70% of the Brazilian beer market). The Brazilian Government had to intervene and, finally, AmBev was authorized only with some minor restrictions.
Swot Analysis of "AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale" written by Lourdes Casanova, Fernando Rodrigues includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ambev Brazilian facing as an external strategic factors. Some of the topics covered in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale casestudy better are - – wage bills are increasing, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ambev Brazilian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ambev Brazilian 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale can be done for the following purposes –
1. Strategic planning using facts provided in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale case study
2. Improving business portfolio management of Ambev Brazilian
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 Ambev Brazilian
Strengths AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ambev Brazilian in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale Harvard Business Review case study are -
Strong track record of project management
– Ambev Brazilian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Ambev Brazilian has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ambev Brazilian to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Ambev Brazilian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 Ambev Brazilian 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.
Low bargaining power of suppliers
– Suppliers of Ambev Brazilian in the sector have low bargaining power. AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ambev Brazilian to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Ambev Brazilian 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Ambev Brazilian in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Ambev Brazilian is one of the most innovative firm in sector. Manager in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Ambev Brazilian is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ambev Brazilian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Ambev Brazilian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ambev Brazilian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ambev Brazilian digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ambev Brazilian 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.
Ability to lead change in Strategy & Execution field
– Ambev Brazilian 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 Ambev Brazilian in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale are -
High operating costs
– Compare to the competitors, firm in the HBR case study AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 Ambev Brazilian 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale, 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.
Interest costs
– Compare to the competition, Ambev Brazilian 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.
Increasing silos among functional specialists
– The organizational structure of Ambev Brazilian is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ambev Brazilian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ambev Brazilian to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 Ambev Brazilian has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale, in the dynamic environment Ambev Brazilian has struggled to respond to the nimble upstart competition. Ambev Brazilian has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Ambev Brazilian 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. Ambev Brazilian 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.
Slow to strategic competitive environment developments
– As AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale HBR case study mentions - Ambev Brazilian takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Ambev Brazilian 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.
Capital Spending Reduction
– Even during the low interest decade, Ambev Brazilian 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale, is just above the industry average. Ambev Brazilian 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.
Opportunities AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale | 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale are -
Loyalty marketing
– Ambev Brazilian 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ambev Brazilian can use these opportunities to build new business models that can help the communities that Ambev Brazilian operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Ambev Brazilian 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.
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. Ambev Brazilian 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. Ambev Brazilian 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.
Building a culture of innovation
– managers at Ambev Brazilian 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 Strategy & Execution segment.
Using analytics as competitive advantage
– Ambev Brazilian 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ambev Brazilian to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ambev Brazilian is facing challenges because of the dominance of functional experts in the organization. AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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.
Leveraging digital technologies
– Ambev Brazilian 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.
Learning at scale
– Online learning technologies has now opened space for Ambev Brazilian 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ambev Brazilian 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, AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ambev Brazilian can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Ambev Brazilian 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.
Developing new processes and practices
– Ambev Brazilian 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.
Threats AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ambev Brazilian 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale .
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.
Stagnating economy with rate increase
– Ambev Brazilian 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale, Ambev Brazilian 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 .
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 Ambev Brazilian.
Regulatory challenges
– Ambev Brazilian 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.
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. Ambev Brazilian needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Ambev Brazilian 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 acceleration in Forth Industrial Revolution
– Ambev Brazilian has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ambev Brazilian 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 Ambev Brazilian business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Ambev Brazilian 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. Ambev Brazilian can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ambev Brazilian in the Strategy & Execution industry. The Strategy & Execution 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. Ambev Brazilian 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.
Weighted SWOT Analysis of AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 AmBev, The Dream Project (A): A Brazilian-Based Multinational Beverage Company with Global Scale 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 Ambev Brazilian needs to make to build a sustainable competitive advantage.
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