Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry
While wine tourism in the United States was booming, the majority of consumers who tasted a Cabernet Sauvignon in one of Napa Valley's tasting rooms were not permitted to ship the wine directly to their home. In 2002, direct-to-consumer shipping was either banned or overly cumbersome in 37 states. W. Reed Foster, president of the Coalition for Free Trade, was determined to remove these obstacles. Would he be able to free the grapes?
Authors :: Felix Oberholzer-Gee, Dennis Yao, Patricia Wu, Libby Cantrill
Swot Analysis of "Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry" written by Felix Oberholzer-Gee, Dennis Yao, Patricia Wu, Libby Cantrill includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wine Grapes facing as an external strategic factors. Some of the topics covered in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry case study are - Strategic Management Strategies, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry casestudy better are - – central banks are concerned over increasing inflation, wage bills are increasing, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wine Grapes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wine Grapes 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry can be done for the following purposes –
1. Strategic planning using facts provided in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry case study
2. Improving business portfolio management of Wine Grapes
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 Wine Grapes
Strengths Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wine Grapes in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Wine Grapes 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
– Wine Grapes is one of the most innovative firm in sector. Manager in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Wine Grapes 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.
Strong track record of project management
– Wine Grapes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Wine Grapes in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– Wine Grapes 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 Wine Grapes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Wine Grapes is present in almost all the verticals within the industry. This has provided firm in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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.
Training and development
– Wine Grapes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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.
Ability to recruit top talent
– Wine Grapes is one of the leading recruiters in the industry. Managers in the Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Wine Grapes 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry firm has clearly differentiated products in the market place. This has enabled Wine Grapes to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Wine Grapes to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Wine Grapes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wine Grapes 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.
Weaknesses Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry are -
Low market penetration in new markets
– Outside its home market of Wine Grapes, firm in the HBR case study Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry HBR case study mentions - Wine Grapes 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.
Need for greater diversity
– Wine Grapes 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.
Aligning sales with marketing
– It come across in the case study Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry can leverage the sales team experience to cultivate customer relationships as Wine Grapes is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Wine Grapes is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Wine Grapes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wine Grapes to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Wine Grapes 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.
Interest costs
– Compare to the competition, Wine Grapes 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry, is just above the industry average. Wine Grapes 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.
Products dominated business model
– Even though Wine Grapes has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry, it seems that the employees of Wine Grapes don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wine Grapes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry | 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry are -
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. Wine Grapes 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. Wine Grapes 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.
Loyalty marketing
– Wine Grapes 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.
Buying journey improvements
– Wine Grapes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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.
Developing new processes and practices
– Wine Grapes 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wine Grapes can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Wine Grapes 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.
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. Wine Grapes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Wine Grapes 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.
Better consumer reach
– The expansion of the 5G network will help Wine Grapes to increase its market reach. Wine Grapes 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.
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 Wine Grapes in the consumer business. Now Wine Grapes can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wine Grapes 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.
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. Wine Grapes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wine Grapes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wine Grapes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Wine Grapes needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Wine Grapes
– 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 Wine Grapes.
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.
Shortening product life cycle
– it is one of the major threat that Wine Grapes is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Wine Grapes business can come under increasing regulations regarding data privacy, data security, 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry, Wine Grapes 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wine Grapes 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry .
Environmental challenges
– Wine Grapes 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. Wine Grapes can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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. Wine Grapes 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.
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 Wine Grapes in the Strategy & Execution sector and impact the bottomline of the organization.
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 Wine Grapes.
Weighted SWOT Analysis of Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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 Free the Grapes--Direct-to-Consumer Shipping in the Wine Industry 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 Wine Grapes needs to make to build a sustainable competitive advantage.
