Case Study Description of What's Your Beef? Babbitt Ranches' Grass-fed Beef
Billy Cordasco, as President of Babbitt Ranches, was looking for alternatives to his current business model, where calves were born on the ranch, kept on the range for over a year, and then sold on the hoof at the market price. Interest in alternatives to the grain-fed beef offerings of supermarkets was growing. Health and sustainability issues had increased the popularity of grass-fed beef. Beef production and sales were generally low margin businesses, but if consumers were willing to pay a premium price for sustainable grass-fed beef, it might be possible for Babbitt Ranches to respond to the consumer need and increase the firm's bottom line at the same time. Because of Babbitt Ranches' financial resources, size, and reputation, numerous business model options existed. Billy needed to brainstorm which business models made sense for Babbitt Ranches. Presented with information necessary to understand the complex beef value chain, financial data on different value chain functions, and several options that were previously considered by Babbitt Ranches, Billy was able to both quantitatively and qualitatively the evaluate taking over one or more of the following functions: slaughter, hanging, processing, distribution, wholesale and/or retail sales. Under consideration was Babbitt Ranches' ability to acquire or develop the necessary resources for a new business model. Recognizing the opportunity presented by the increasing demand for grass-fed beef and the challenge of a complex beef value chain, Billy's goal was to limit the number of business model options to those that were feasible so he could put additional resources toward due diligence on a reasonable set of models.
Authors :: Chris Scherpereel, Kathryn S Savage, Lisa F Majure
Swot Analysis of "What's Your Beef? Babbitt Ranches' Grass-fed Beef" written by Chris Scherpereel, Kathryn S Savage, Lisa F Majure includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Babbitt Ranches facing as an external strategic factors. Some of the topics covered in What's Your Beef? Babbitt Ranches' Grass-fed Beef case study are - Strategic Management Strategies, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the What's Your Beef? Babbitt Ranches' Grass-fed Beef casestudy better are - – technology disruption, increasing energy prices, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of What's Your Beef? Babbitt Ranches' Grass-fed Beef
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in What's Your Beef? Babbitt Ranches' Grass-fed Beef case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Babbitt Ranches, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Babbitt Ranches 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef can be done for the following purposes –
1. Strategic planning using facts provided in What's Your Beef? Babbitt Ranches' Grass-fed Beef case study
2. Improving business portfolio management of Babbitt Ranches
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 Babbitt Ranches
Strengths What's Your Beef? Babbitt Ranches' Grass-fed Beef | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Babbitt Ranches in What's Your Beef? Babbitt Ranches' Grass-fed Beef Harvard Business Review case study are -
High switching costs
– The high switching costs that Babbitt Ranches 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.
Effective Research and Development (R&D)
– Babbitt Ranches 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef - 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
– What's Your Beef? Babbitt Ranches' Grass-fed Beef firm has clearly differentiated products in the market place. This has enabled Babbitt Ranches to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Babbitt Ranches to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Babbitt Ranches 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 Babbitt Ranches in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the What's Your Beef? Babbitt Ranches' Grass-fed Beef 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.
Low bargaining power of suppliers
– Suppliers of Babbitt Ranches in the sector have low bargaining power. What's Your Beef? Babbitt Ranches' Grass-fed Beef has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Babbitt Ranches to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Babbitt Ranches digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Babbitt Ranches 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.
Diverse revenue streams
– Babbitt Ranches is present in almost all the verticals within the industry. This has provided firm in What's Your Beef? Babbitt Ranches' Grass-fed Beef 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.
Ability to recruit top talent
– Babbitt Ranches is one of the leading recruiters in the industry. Managers in the What's Your Beef? Babbitt Ranches' Grass-fed Beef are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Babbitt Ranches is one of the most innovative firm in sector. Manager in What's Your Beef? Babbitt Ranches' Grass-fed Beef Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Babbitt Ranches 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.
Learning organization
- Babbitt Ranches 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 Babbitt Ranches is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in What's Your Beef? Babbitt Ranches' Grass-fed Beef Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses What's Your Beef? Babbitt Ranches' Grass-fed Beef | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of What's Your Beef? Babbitt Ranches' Grass-fed Beef are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study What's Your Beef? Babbitt Ranches' Grass-fed Beef, is just above the industry average. Babbitt Ranches 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Babbitt Ranches 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.
Need for greater diversity
– Babbitt Ranches 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.
Capital Spending Reduction
– Even during the low interest decade, Babbitt Ranches 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.
High cash cycle compare to competitors
Babbitt Ranches 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.
Increasing silos among functional specialists
– The organizational structure of Babbitt Ranches is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Babbitt Ranches needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Babbitt Ranches to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Babbitt Ranches, firm in the HBR case study What's Your Beef? Babbitt Ranches' Grass-fed Beef needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Babbitt Ranches supply chain. Even after few cautionary changes mentioned in the HBR case study - What's Your Beef? Babbitt Ranches' Grass-fed Beef, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Babbitt Ranches vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 Babbitt Ranches 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Babbitt Ranches 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. Babbitt Ranches 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.
Aligning sales with marketing
– It come across in the case study What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef can leverage the sales team experience to cultivate customer relationships as Babbitt Ranches is planning to shift buying processes online.
Opportunities What's Your Beef? Babbitt Ranches' Grass-fed Beef | 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Babbitt Ranches 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, What's Your Beef? Babbitt Ranches' Grass-fed Beef, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Babbitt Ranches has opened avenues for new revenue streams for the organization in the industry. This can help Babbitt Ranches to build a more holistic ecosystem as suggested in the What's Your Beef? Babbitt Ranches' Grass-fed Beef case study. Babbitt Ranches can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Babbitt Ranches can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Babbitt Ranches 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.
Loyalty marketing
– Babbitt Ranches 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.
Better consumer reach
– The expansion of the 5G network will help Babbitt Ranches to increase its market reach. Babbitt Ranches 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Babbitt Ranches is facing challenges because of the dominance of functional experts in the organization. What's Your Beef? Babbitt Ranches' Grass-fed Beef 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Babbitt Ranches can use these opportunities to build new business models that can help the communities that Babbitt Ranches operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Babbitt Ranches in the consumer business. Now Babbitt Ranches can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Babbitt Ranches 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 Babbitt Ranches to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Babbitt Ranches 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.
Using analytics as competitive advantage
– Babbitt Ranches 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Babbitt Ranches to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Babbitt Ranches 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. Babbitt Ranches 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.
Threats What's Your Beef? Babbitt Ranches' Grass-fed Beef External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study What's Your Beef? Babbitt Ranches' Grass-fed Beef are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Babbitt Ranches 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 Babbitt Ranches 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study What's Your Beef? Babbitt Ranches' Grass-fed Beef, Babbitt Ranches 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, Babbitt Ranches 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef .
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. Babbitt Ranches needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Babbitt Ranches 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.
Environmental challenges
– Babbitt Ranches 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. Babbitt Ranches can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Babbitt Ranches.
Increasing wage structure of Babbitt Ranches
– 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 Babbitt Ranches.
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. Babbitt Ranches 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.
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 Babbitt Ranches 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 Babbitt Ranches in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 What's Your Beef? Babbitt Ranches' Grass-fed Beef 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 Babbitt Ranches needs to make to build a sustainable competitive advantage.