Case Study Description of WineMaster.com (A1): Confidential Instructions for WineMaster
A two-person negotiation exercise involving the potential sale of a small e-commerce company to a large company. The parties need to negotiate four issues: the number of shares in the deal, the vesting period for the shares, whether the seller will get a seat on the buyer's board, and the ownership of a potential liability against the seller.
Swot Analysis of "WineMaster.com (A1): Confidential Instructions for WineMaster" written by Guhan Subramanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Seller Winemaster facing as an external strategic factors. Some of the topics covered in WineMaster.com (A1): Confidential Instructions for WineMaster case study are - Strategic Management Strategies, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the WineMaster.com (A1): Confidential Instructions for WineMaster casestudy better are - – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, wage bills are increasing,
increasing commodity prices, technology disruption, etc
Introduction to SWOT Analysis of WineMaster.com (A1): Confidential Instructions for WineMaster
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in WineMaster.com (A1): Confidential Instructions for WineMaster case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seller Winemaster, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seller Winemaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster can be done for the following purposes –
1. Strategic planning using facts provided in WineMaster.com (A1): Confidential Instructions for WineMaster case study
2. Improving business portfolio management of Seller Winemaster
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 Seller Winemaster
Strengths WineMaster.com (A1): Confidential Instructions for WineMaster | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seller Winemaster in WineMaster.com (A1): Confidential Instructions for WineMaster Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– WineMaster.com (A1): Confidential Instructions for WineMaster firm has clearly differentiated products in the market place. This has enabled Seller Winemaster to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Seller Winemaster to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Seller Winemaster has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Seller Winemaster 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.
Operational resilience
– The operational resilience strategy in the WineMaster.com (A1): Confidential Instructions for WineMaster 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.
High switching costs
– The high switching costs that Seller Winemaster 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 Seller Winemaster in the sector have low bargaining power. WineMaster.com (A1): Confidential Instructions for WineMaster has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seller Winemaster to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Seller Winemaster 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.
Innovation driven organization
– Seller Winemaster is one of the most innovative firm in sector. Manager in WineMaster.com (A1): Confidential Instructions for WineMaster Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Seller Winemaster is one of the leading recruiters in the industry. Managers in the WineMaster.com (A1): Confidential Instructions for WineMaster are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Seller Winemaster digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Seller Winemaster 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.
Learning organization
- Seller Winemaster 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 Seller Winemaster is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in WineMaster.com (A1): Confidential Instructions for WineMaster Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Seller Winemaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Seller Winemaster 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 Guhan Subramanian 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.
Weaknesses WineMaster.com (A1): Confidential Instructions for WineMaster | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of WineMaster.com (A1): Confidential Instructions for WineMaster are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study WineMaster.com (A1): Confidential Instructions for WineMaster, in the dynamic environment Seller Winemaster has struggled to respond to the nimble upstart competition. Seller Winemaster has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Seller Winemaster is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study WineMaster.com (A1): Confidential Instructions for WineMaster can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Seller Winemaster 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. Seller Winemaster 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Seller Winemaster 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.
Aligning sales with marketing
– It come across in the case study WineMaster.com (A1): Confidential Instructions for WineMaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster can leverage the sales team experience to cultivate customer relationships as Seller Winemaster is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Guhan Subramanian suggests that, Seller Winemaster 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.
Interest costs
– Compare to the competition, Seller Winemaster 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.
No frontier risks strategy
– After analyzing the HBR case study WineMaster.com (A1): Confidential Instructions for WineMaster, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study WineMaster.com (A1): Confidential Instructions for WineMaster, is just above the industry average. Seller Winemaster 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 Seller Winemaster products
– To increase the profitability and margins on the products, Seller Winemaster needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Seller Winemaster 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.
Opportunities WineMaster.com (A1): Confidential Instructions for WineMaster | 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 WineMaster.com (A1): Confidential Instructions for WineMaster are -
Building a culture of innovation
– managers at Seller Winemaster 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Seller Winemaster in the consumer business. Now Seller Winemaster can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Seller Winemaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Seller Winemaster to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Seller Winemaster 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seller Winemaster 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Seller Winemaster 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, WineMaster.com (A1): Confidential Instructions for WineMaster, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Seller Winemaster can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. WineMaster.com (A1): Confidential Instructions for WineMaster 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.
Better consumer reach
– The expansion of the 5G network will help Seller Winemaster to increase its market reach. Seller Winemaster 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.
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. Seller Winemaster can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Seller Winemaster 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.
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. Seller Winemaster 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. Seller Winemaster 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Seller Winemaster can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Seller Winemaster 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.
Threats WineMaster.com (A1): Confidential Instructions for WineMaster External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study WineMaster.com (A1): Confidential Instructions for WineMaster are -
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.
Regulatory challenges
– Seller Winemaster 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.
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. Seller Winemaster 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 Seller Winemaster is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study WineMaster.com (A1): Confidential Instructions for WineMaster, Seller Winemaster 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 .
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
– Seller Winemaster 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.
Increasing wage structure of Seller Winemaster
– 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 Seller Winemaster.
High dependence on third party suppliers
– Seller Winemaster 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Seller Winemaster with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Seller Winemaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Seller Winemaster 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.
Consumer confidence and its impact on Seller Winemaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster 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 WineMaster.com (A1): Confidential Instructions for WineMaster 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 Seller Winemaster needs to make to build a sustainable competitive advantage.
