Note on the U.S. Chocolate Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Note on the U.S. Chocolate Market
In 2000, 81% of U.S. adults consumed chocolate. Despite the popularity of chocolate in the United States, many analysts believed that the market was far from saturated, noting that European per capita consumption of chocolate remained considerably higher than that of American consumers. Indeed, retail sales of chocolate in the United States had experienced a steady increase in recent years. The total retail value of the U.S. market for chocolate was estimated at $13.7 billion in 2002, a 10.2% increase from 1998. U.S. retail chocolate sales were forecast to grow to $14.5 billion in 2007. Much of this gain in retail value could be attributed to a shift of U.S. consumers toward higher priced chocolates. In 2002, growth in receipts outpaced volume gains for chocolate candy by 8.7 percentage points over the previous year. The gourmet category was expected to grow as consumers incorporated more expensive gourmet foods into their diets, a trend beginning with the beer, wine, coffee, cheese, and ice cream industries. Two giants dominated: Hershey's controlled 32.6% of the market and Mars had 29.6%. Market share was divided among mass-market, gourmet, and cause-related manufacturers. Mass-market chocolatiers were defined as those selling chocolate at less than $10 per pound retail, whereas gourmet chocolatiers were defined as those selling chocolate at or more than $10 per pound retail.
Swot Analysis of "Note on the U.S. Chocolate Market" written by Glenn Carroll, Greg Powell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chocolate Gourmet facing as an external strategic factors. Some of the topics covered in Note on the U.S. Chocolate Market case study are - Strategic Management Strategies, Entrepreneurship, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Note on the U.S. Chocolate Market casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, technology disruption, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Note on the U.S. Chocolate Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Note on the U.S. Chocolate Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chocolate Gourmet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chocolate Gourmet 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 Note on the U.S. Chocolate Market can be done for the following purposes –
1. Strategic planning using facts provided in Note on the U.S. Chocolate Market case study
2. Improving business portfolio management of Chocolate Gourmet
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 Chocolate Gourmet
Strengths Note on the U.S. Chocolate Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chocolate Gourmet in Note on the U.S. Chocolate Market Harvard Business Review case study are -
Strong track record of project management
– Chocolate Gourmet is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Chocolate Gourmet is one of the most innovative firm in sector. Manager in Note on the U.S. Chocolate Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Chocolate Gourmet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chocolate Gourmet 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.
Organizational Resilience of Chocolate Gourmet
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chocolate Gourmet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Chocolate Gourmet in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Chocolate Gourmet 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 Note on the U.S. Chocolate Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Chocolate Gourmet has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Note on the U.S. Chocolate Market 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.
Diverse revenue streams
– Chocolate Gourmet is present in almost all the verticals within the industry. This has provided firm in Note on the U.S. Chocolate Market 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Note on the U.S. Chocolate Market firm has clearly differentiated products in the market place. This has enabled Chocolate Gourmet to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Chocolate Gourmet to invest into research and development (R&D) and innovation.
High brand equity
– Chocolate Gourmet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chocolate Gourmet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Chocolate Gourmet has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Strategy & Execution field
– Chocolate Gourmet 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 Chocolate Gourmet in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Note on the U.S. Chocolate Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Note on the U.S. Chocolate Market are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chocolate Gourmet is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Note on the U.S. Chocolate Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Note on the U.S. Chocolate Market, is just above the industry average. Chocolate Gourmet 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.
Increasing silos among functional specialists
– The organizational structure of Chocolate Gourmet is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Chocolate Gourmet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chocolate Gourmet to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Chocolate Gourmet products
– To increase the profitability and margins on the products, Chocolate Gourmet needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Chocolate Gourmet 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.
Aligning sales with marketing
– It come across in the case study Note on the U.S. Chocolate Market 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 Note on the U.S. Chocolate Market can leverage the sales team experience to cultivate customer relationships as Chocolate Gourmet is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Chocolate Gourmet supply chain. Even after few cautionary changes mentioned in the HBR case study - Note on the U.S. Chocolate Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chocolate Gourmet vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Chocolate Gourmet 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. Chocolate Gourmet 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.
Need for greater diversity
– Chocolate Gourmet 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 Note on the U.S. Chocolate Market, in the dynamic environment Chocolate Gourmet has struggled to respond to the nimble upstart competition. Chocolate Gourmet has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Chocolate Gourmet needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Note on the U.S. Chocolate Market | 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 Note on the U.S. Chocolate Market are -
Better consumer reach
– The expansion of the 5G network will help Chocolate Gourmet to increase its market reach. Chocolate Gourmet 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.
Building a culture of innovation
– managers at Chocolate Gourmet 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chocolate Gourmet 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 Chocolate Gourmet to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Chocolate Gourmet 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chocolate Gourmet 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.
Leveraging digital technologies
– Chocolate Gourmet 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chocolate Gourmet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Chocolate Gourmet can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Note on the U.S. Chocolate Market 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.
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. Chocolate Gourmet can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Chocolate Gourmet has opened avenues for new revenue streams for the organization in the industry. This can help Chocolate Gourmet to build a more holistic ecosystem as suggested in the Note on the U.S. Chocolate Market case study. Chocolate Gourmet 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. Chocolate Gourmet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Chocolate Gourmet 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. Chocolate Gourmet 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chocolate Gourmet 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, Note on the U.S. Chocolate Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Note on the U.S. Chocolate Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Note on the U.S. Chocolate Market are -
Shortening product life cycle
– it is one of the major threat that Chocolate Gourmet is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Chocolate Gourmet in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Chocolate Gourmet
– 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 Chocolate Gourmet.
High dependence on third party suppliers
– Chocolate Gourmet 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chocolate Gourmet 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 Note on the U.S. Chocolate Market .
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. Chocolate Gourmet can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Chocolate Gourmet business can come under increasing regulations regarding data privacy, data security, etc.
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. Chocolate Gourmet needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Chocolate Gourmet has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Chocolate Gourmet 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.
Regulatory challenges
– Chocolate Gourmet 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.
Consumer confidence and its impact on Chocolate Gourmet 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.
Weighted SWOT Analysis of Note on the U.S. Chocolate Market 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 Note on the U.S. Chocolate Market 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 Note on the U.S. Chocolate Market 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 Note on the U.S. Chocolate Market 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 Note on the U.S. Chocolate Market 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 Chocolate Gourmet needs to make to build a sustainable competitive advantage.
