The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down?
In early February 2009, executives from a U.S. wine importer, W. J. Deutsch & Sons (Deutsch), met in White Plains, New York, to try and reach a consensus on how to respond to changes in the marketplace. Wine consumers had begun purchasing less expensive wines, or "trading down," amidst a global recession in 2008-2009, reversing a five-year "trading up" trend. Inventories ballooned in the wine industry supply chain. Some producers and importers, unable to sell stocks, went into default. After an initial failure in the late 1990s to create an import brand with Casella Wines in Australia, Deutsch found success with the [ yellow tail ] brand - the number one Australian wine export and U.S. import from 2003-2008. John Casella, Managing Director of Casella Wines, suggested repositioning the [ yellow tail ] brand, priced at $4.99 - $5.99 per 750ml bottle, while Deutsch's founder, Bill Deutsch, and his son, Peter (CEO), could not agree on a strategy.
Swot Analysis of "The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down?" written by Armand Gilinsky Jr., Raymond H. Lopez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Deutsch Casella facing as an external strategic factors. Some of the topics covered in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? case study are - Strategic Management Strategies, Pricing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? casestudy better are - – increasing energy prices, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Deutsch Casella, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Deutsch Casella 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? can be done for the following purposes –
1. Strategic planning using facts provided in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? case study
2. Improving business portfolio management of Deutsch Casella
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 Deutsch Casella
Strengths The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Deutsch Casella in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? Harvard Business Review case study are -
Organizational Resilience of Deutsch Casella
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Deutsch Casella does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Deutsch Casella in the sector have low bargaining power. The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Deutsch Casella to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Deutsch Casella 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 Deutsch Casella in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Deutsch Casella 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Deutsch Casella has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Deutsch Casella digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Deutsch Casella 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 switching costs
– The high switching costs that Deutsch Casella 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.
Innovation driven organization
– Deutsch Casella is one of the most innovative firm in sector. Manager in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Deutsch Casella is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? firm has clearly differentiated products in the market place. This has enabled Deutsch Casella to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Deutsch Casella to invest into research and development (R&D) and innovation.
High brand equity
– Deutsch Casella has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Deutsch Casella to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Deutsch Casella 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 Deutsch Casella is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? are -
Need for greater diversity
– Deutsch Casella 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.
Products dominated business model
– Even though Deutsch Casella 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 - The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Deutsch Casella is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 Deutsch Casella 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Deutsch Casella is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Deutsch Casella needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Deutsch Casella to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Deutsch Casella 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? can leverage the sales team experience to cultivate customer relationships as Deutsch Casella is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Deutsch Casella has relatively successful track record of launching new products.
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 Deutsch Casella supply chain. Even after few cautionary changes mentioned in the HBR case study - The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Deutsch Casella vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down?, in the dynamic environment Deutsch Casella has struggled to respond to the nimble upstart competition. Deutsch Casella has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Deutsch Casella 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.
Opportunities The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? | 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Deutsch Casella 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
– Deutsch Casella can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 Deutsch Casella to increase its market reach. Deutsch Casella 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.
Leveraging digital technologies
– Deutsch Casella 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Deutsch Casella 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, The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Deutsch Casella 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.
Using analytics as competitive advantage
– Deutsch Casella 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Deutsch Casella to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Deutsch Casella 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 Deutsch Casella to hire the very best people irrespective of their geographical location.
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. Deutsch Casella can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Deutsch Casella can use these opportunities to build new business models that can help the communities that Deutsch Casella operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Deutsch Casella 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.
Learning at scale
– Online learning technologies has now opened space for Deutsch Casella 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.
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 Deutsch Casella in the consumer business. Now Deutsch Casella can target international markets with far fewer capital restrictions requirements than the existing system.
Threats The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? are -
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. Deutsch Casella 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
– Deutsch Casella has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Deutsch Casella 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.
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 Deutsch Casella in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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. Deutsch Casella can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Environmental challenges
– Deutsch Casella 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. Deutsch Casella can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Deutsch Casella 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.
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 Deutsch Casella.
Consumer confidence and its impact on Deutsch Casella 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.
Regulatory challenges
– Deutsch Casella 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.
Shortening product life cycle
– it is one of the major threat that Deutsch Casella is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Deutsch Casella with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 The Deutsch-Casella Joint Venture and [Yellow Tail]A? Wines: Trading Up or Trading Down? 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 Deutsch Casella needs to make to build a sustainable competitive advantage.
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