PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?
Mekong Capital, a private equity firm based in Vietnam, is considering exiting its stake in restaurant chain operator Golden Gate. Despite robust growth, Golden Gate's profitability is lagging. Students are asked to evaluate the best means of exit and whether operational improvements are required to attract buyers or create the foundation for a successful IPO. Please visit the dedicated case website http://cases.insead.edu/mekong-capital to access supplementary material.
Authors :: Claudia Zeisberger, Peter Goodson, Kimberly McGinnis
Swot Analysis of "PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?" written by Claudia Zeisberger, Peter Goodson, Kimberly McGinnis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mekong Golden facing as an external strategic factors. Some of the topics covered in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? case study are - Strategic Management Strategies, Entrepreneurial finance, Financial management, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? casestudy better are - – geopolitical disruptions, technology disruption, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, there is backlash against globalization, increasing energy prices, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mekong Golden, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mekong Golden 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? can be done for the following purposes –
1. Strategic planning using facts provided in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? case study
2. Improving business portfolio management of Mekong Golden
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 Mekong Golden
Strengths PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mekong Golden in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Mekong Golden in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Mekong Golden has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mekong Golden 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.
Analytics focus
– Mekong Golden 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 Claudia Zeisberger, Peter Goodson, Kimberly McGinnis 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.
Learning organization
- Mekong Golden 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 Mekong Golden is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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.
Ability to lead change in Strategy & Execution field
– Mekong Golden 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 Mekong Golden in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Mekong Golden is present in almost all the verticals within the industry. This has provided firm in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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.
Organizational Resilience of Mekong Golden
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mekong Golden does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Mekong Golden has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mekong Golden to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Mekong Golden is one of the leading recruiters in the industry. Managers in the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Mekong Golden has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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.
Low bargaining power of suppliers
– Suppliers of Mekong Golden in the sector have low bargaining power. PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mekong Golden to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? are -
Slow to strategic competitive environment developments
– As PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? HBR case study mentions - Mekong Golden 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.
Products dominated business model
– Even though Mekong Golden 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 - PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Mekong Golden is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Mekong Golden needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mekong Golden to focus more on services rather than just following the product oriented approach.
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 Mekong Golden supply chain. Even after few cautionary changes mentioned in the HBR case study - PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mekong Golden vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Mekong Golden has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?, 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.
Interest costs
– Compare to the competition, Mekong Golden 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 operating costs
– Compare to the competitors, firm in the HBR case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 Mekong Golden 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Mekong Golden, firm in the HBR case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 Mekong Golden has relatively successful track record of launching new products.
Lack of clear differentiation of Mekong Golden products
– To increase the profitability and margins on the products, Mekong Golden needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? | 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? are -
Creating value in data economy
– The success of analytics program of Mekong Golden has opened avenues for new revenue streams for the organization in the industry. This can help Mekong Golden to build a more holistic ecosystem as suggested in the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? case study. Mekong Golden can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Mekong Golden 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.
Developing new processes and practices
– Mekong Golden 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.
Learning at scale
– Online learning technologies has now opened space for Mekong Golden 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mekong Golden 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mekong Golden is facing challenges because of the dominance of functional experts in the organization. PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 Mekong Golden 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 Mekong Golden to hire the very best people irrespective of their geographical location.
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. Mekong Golden can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mekong Golden can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Mekong Golden 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.
Building a culture of innovation
– managers at Mekong Golden 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.
Buying journey improvements
– Mekong Golden can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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.
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. Mekong Golden 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. Mekong Golden 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mekong Golden with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Mekong Golden business can come under increasing regulations regarding data privacy, data security, etc.
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. Mekong Golden 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mekong Golden 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.
High dependence on third party suppliers
– Mekong Golden 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.
Consumer confidence and its impact on Mekong Golden 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.
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 Mekong Golden in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mekong Golden 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? .
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 Mekong Golden.
Environmental challenges
– Mekong Golden 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. Mekong Golden can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Mekong Golden 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.
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. Mekong Golden can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Mekong Golden needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 Mekong Golden needs to make to build a sustainable competitive advantage.
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