Nespresso: How to Protect Your Brand from Social Media Attacks SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nespresso: How to Protect Your Brand from Social Media Attacks
Solidar Switzerland a Non-Government Organisation, originally created in 1936 under the name of Swiss Labour Assistance SLA launched in September 2011 a campaign against NestlA? Nespresso. A viral video, named "Fair Trade - What else?" (https://www.youtube.com/watch?v=2G8QljHVn_A), was initially launched on their web page with the objective to raise awareness of social inequality of coffee farmers in South America and to raise awareness of Fair Trade and influence the buying behaviour of the Swiss population. Solidar asked their supporters to boost their campaign against Nespresso through a viral effect. This case explains what happened after, how Nespresso protected their brand and why Solidar chose Nespresso as a target. A fast reacting crisis management was key for Nespresso to gain control of the situation. The power of social media should never be underestimated and part of this case provides ideas and insight on how to respond on social media attacks. Further, this case explains the sustainability journey of Nespresso and share the learning of the organization which is also partly driven by this incident. This paper also contains a role play which helps to strengthen the crisis management and leadership skills. Learning objective: The case could be discussed as an example for: crisis management, management of reputational risk, leadership - negotiation, sustainability, brand management in particular social media management and communication strategy.
Authors :: Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner
Topics :: Strategy & Execution
Tags :: Corporate governance, Crisis management, International business, Leadership, Social platforms, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Nespresso: How to Protect Your Brand from Social Media Attacks" written by Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nespresso Solidar facing as an external strategic factors. Some of the topics covered in Nespresso: How to Protect Your Brand from Social Media Attacks case study are - Strategic Management Strategies, Corporate governance, Crisis management, International business, Leadership, Social platforms, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Nespresso: How to Protect Your Brand from Social Media Attacks casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , technology disruption, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Nespresso: How to Protect Your Brand from Social Media Attacks
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nespresso: How to Protect Your Brand from Social Media Attacks case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nespresso Solidar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks can be done for the following purposes –
1. Strategic planning using facts provided in Nespresso: How to Protect Your Brand from Social Media Attacks case study
2. Improving business portfolio management of Nespresso Solidar
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 Nespresso Solidar
Strengths Nespresso: How to Protect Your Brand from Social Media Attacks | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nespresso Solidar in Nespresso: How to Protect Your Brand from Social Media Attacks Harvard Business Review case study are -
High brand equity
– Nespresso Solidar has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nespresso Solidar to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Nespresso Solidar 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.
Learning organization
- Nespresso Solidar 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 Nespresso Solidar is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nespresso: How to Protect Your Brand from Social Media Attacks Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Nespresso Solidar has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nespresso: How to Protect Your Brand from Social Media Attacks 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.
Analytics focus
– Nespresso Solidar 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 Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner 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.
Superior customer experience
– The customer experience strategy of Nespresso Solidar in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nespresso Solidar digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nespresso Solidar 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.
Ability to lead change in Strategy & Execution field
– Nespresso Solidar 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 Nespresso Solidar in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Nespresso Solidar 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.
Successful track record of launching new products
– Nespresso Solidar has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nespresso Solidar 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.
Highly skilled collaborators
– Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Nespresso Solidar is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Nespresso: How to Protect Your Brand from Social Media Attacks | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nespresso: How to Protect Your Brand from Social Media Attacks are -
Slow decision making process
– As mentioned earlier in the report, Nespresso Solidar 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. Nespresso Solidar 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.
No frontier risks strategy
– After analyzing the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks, 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.
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 Nespresso Solidar supply chain. Even after few cautionary changes mentioned in the HBR case study - Nespresso: How to Protect Your Brand from Social Media Attacks, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nespresso Solidar vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Nespresso Solidar 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nespresso: How to Protect Your Brand from Social Media Attacks, in the dynamic environment Nespresso Solidar has struggled to respond to the nimble upstart competition. Nespresso Solidar has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Nespresso Solidar 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.
Need for greater diversity
– Nespresso Solidar 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks, is just above the industry average. Nespresso Solidar 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.
Interest costs
– Compare to the competition, Nespresso Solidar 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner suggests that, Nespresso Solidar is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso Solidar 's lucrative customers.
Opportunities Nespresso: How to Protect Your Brand from Social Media Attacks | 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 Nespresso: How to Protect Your Brand from Social Media Attacks are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nespresso Solidar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Nespresso Solidar in the consumer business. Now Nespresso Solidar can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nespresso Solidar 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.
Buying journey improvements
– Nespresso Solidar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nespresso: How to Protect Your Brand from Social Media Attacks 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.
Using analytics as competitive advantage
– Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nespresso Solidar to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nespresso Solidar is facing challenges because of the dominance of functional experts in the organization. Nespresso: How to Protect Your Brand from Social Media Attacks case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nespresso Solidar 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 Nespresso Solidar to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Nespresso Solidar has opened avenues for new revenue streams for the organization in the industry. This can help Nespresso Solidar to build a more holistic ecosystem as suggested in the Nespresso: How to Protect Your Brand from Social Media Attacks case study. Nespresso Solidar can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nespresso Solidar 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, Nespresso: How to Protect Your Brand from Social Media Attacks, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Nespresso Solidar to increase its market reach. Nespresso Solidar 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 Nespresso Solidar 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.
Manufacturing automation
– Nespresso Solidar can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks are -
Shortening product life cycle
– it is one of the major threat that Nespresso Solidar is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Nespresso Solidar 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.
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.
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. Nespresso Solidar needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Nespresso Solidar 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.
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. Nespresso Solidar can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nespresso Solidar with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nespresso: How to Protect Your Brand from Social Media Attacks, Nespresso Solidar 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 .
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. Nespresso Solidar 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.
Regulatory challenges
– Nespresso Solidar 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.
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 Nespresso Solidar business can come under increasing regulations regarding data privacy, data security, etc.
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 Nespresso Solidar in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso Solidar needs to make to build a sustainable competitive advantage.