In 2006, Alpina had processing facilities in Colombia, Ecuador and Venezuela and its products were distributed in 34 countries. With annual sales of nearly $275 million, it was one of the largest private dairy companies in the Andean region. Alpina's social initiatives began early in the organization's history. The founders of the company and the families that were involved in its operations created a work environment in which the needs of stakeholders were a priority. As the company grew, there were changes in its ownership structure. Yet, in 2006, the owners of Alpina, Inc. were still a relatively small number of family investors. With growth there was also an expansion of social initiatives, which were carried out in different areas. Between 2002 and 2006, the Human Resources Department initiated a series of actions to consolidate social responsibility (SR) activities and to achieve greater impact. These efforts fell short when, in 2006, upon implementing a new corporate model, the Executive Committee began to question the purpose and scope of these social activities. The case puts the students in the place of Juan Pablo FernA?ndez who, after three years in the company, was named Vice-President of Marketing. The Executive Committee gave his office the task of preparing a proposal to increase Alpina's social impact and established a limit on the amount of resources available for these activities. The information provided in the case allows the student to study and analyze two paths. One possibility was to expand the activities carried out by the company up until that point, which were aligned to varying degrees with the commercial activities of the company but were generally incorporated into the value chain. This was the path chosen by others in the industry and it would allow the company to tackle different risks and inefficiencies that affected the company's overall performance. On the other hand, there was the possibility of creating the Alpina for Nutrition Foundation, which would help avoid the criticism of benefiting from the unsatisfied nutritional needs of the poorest part of the population. In the role of Fernandez, the student must decide which of these two directions the company should take and to propose how best to make it happen.
Swot Analysis of "Alpina Inc." written by Diana M. Trujillo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alpina Alpina's facing as an external strategic factors. Some of the topics covered in Alpina Inc. case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Alpina Inc. casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alpina Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alpina Alpina's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alpina Alpina's 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 Alpina Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Alpina Inc. case study
2. Improving business portfolio management of Alpina Alpina's
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 Alpina Alpina's
Strengths Alpina Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alpina Alpina's in Alpina Inc. Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Alpina Alpina's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alpina Alpina's 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
– Alpina Alpina's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alpina Alpina's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Alpina Alpina's is one of the most innovative firm in sector. Manager in Alpina Inc. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Alpina Alpina's 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 Alpina Inc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Alpina Alpina's in the sector have low bargaining power. Alpina Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alpina Alpina's to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Alpina Inc. 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
– Alpina Inc. firm has clearly differentiated products in the market place. This has enabled Alpina Alpina's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Alpina Alpina's to invest into research and development (R&D) and innovation.
Analytics focus
– Alpina Alpina's 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 Diana M. Trujillo 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.
Effective Research and Development (R&D)
– Alpina Alpina's 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 Alpina Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Alpina Alpina's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alpina Alpina's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Alpina Alpina's 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 Alpina Alpina's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alpina Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Alpina Alpina's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Alpina Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alpina Inc. are -
Lack of clear differentiation of Alpina Alpina's products
– To increase the profitability and margins on the products, Alpina Alpina's needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Alpina Alpina's 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Diana M. Trujillo suggests that, Alpina Alpina's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Alpina Alpina's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alpina Alpina's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alpina Inc. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Alpina Alpina's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Alpina Inc. 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 Alpina Alpina's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Alpina Inc. 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 Alpina Inc. can leverage the sales team experience to cultivate customer relationships as Alpina Alpina's is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Alpina Alpina's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Alpina Inc., in the dynamic environment Alpina Alpina's has struggled to respond to the nimble upstart competition. Alpina Alpina's 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, Alpina Alpina's 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. Alpina Alpina's 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.
Opportunities Alpina Inc. | 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 Alpina Inc. are -
Developing new processes and practices
– Alpina Alpina's 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.
Manufacturing automation
– Alpina Alpina's 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. Alpina Alpina's 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. Alpina Alpina's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alpina Alpina's is facing challenges because of the dominance of functional experts in the organization. Alpina Inc. 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.
Using analytics as competitive advantage
– Alpina Alpina's 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 Alpina Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alpina Alpina's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Alpina Alpina's to increase its market reach. Alpina Alpina's 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.
Creating value in data economy
– The success of analytics program of Alpina Alpina's has opened avenues for new revenue streams for the organization in the industry. This can help Alpina Alpina's to build a more holistic ecosystem as suggested in the Alpina Inc. case study. Alpina Alpina's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Alpina Alpina's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Alpina Inc. 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Alpina Alpina's 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, Alpina Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Alpina Alpina's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alpina Alpina's 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 Alpina Alpina's to hire the very best people irrespective of their geographical location.
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 Alpina Alpina's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alpina Alpina's can use these opportunities to build new business models that can help the communities that Alpina Alpina's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Alpina Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alpina Inc. are -
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. Alpina Alpina's 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.
Shortening product life cycle
– it is one of the major threat that Alpina Alpina's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Alpina Alpina's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alpina Inc., Alpina Alpina's 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 .
Increasing wage structure of Alpina Alpina's
– 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 Alpina Alpina's.
Stagnating economy with rate increase
– Alpina Alpina's 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.
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. Alpina Alpina's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Alpina Alpina's in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Alpina Alpina's 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.
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 Alpina Alpina's.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alpina Alpina's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alpina Alpina's 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 Alpina Inc. .
Technology acceleration in Forth Industrial Revolution
– Alpina Alpina's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Alpina Alpina's 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.
Weighted SWOT Analysis of Alpina Inc. 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 Alpina Inc. 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 Alpina Inc. 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 Alpina Inc. 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 Alpina Inc. 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 Alpina Alpina's needs to make to build a sustainable competitive advantage.
