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 - – increasing commodity prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
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.
Strong track record of project management
– Mekong Golden is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Mekong Golden digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mekong Golden 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.
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.
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.
Effective Research and Development (R&D)
– Mekong Golden 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Mekong Golden 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? firm has clearly differentiated products in the market place. This has enabled Mekong Golden to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mekong Golden to invest into research and development (R&D) and innovation.
Innovation driven organization
– Mekong Golden is one of the most innovative firm in sector. Manager 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 can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 -
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.
Aligning sales with marketing
– It come across in the case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? can leverage the sales team experience to cultivate customer relationships as Mekong Golden is planning to shift buying processes online.
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.
Slow decision making process
– As mentioned earlier in the report, Mekong Golden 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. Mekong Golden 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Mekong Golden 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.
Employees’ incomplete understanding of strategy
– From the instances 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 seems that the employees of Mekong Golden don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Mekong Golden 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.
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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mekong Golden 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, PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Loyalty marketing
– Mekong Golden 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Mekong Golden to increase its market reach. Mekong Golden 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mekong Golden can use these opportunities to build new business models that can help the communities that Mekong Golden 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, Mekong Golden 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.
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.
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.
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 -
Regulatory challenges
– Mekong Golden 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.
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
– 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.
Technology acceleration in Forth Industrial Revolution
– Mekong Golden has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mekong Golden 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.
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? .
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.
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.
Shortening product life cycle
– it is one of the major threat that Mekong Golden 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 Mekong Golden with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
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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