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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Mekong Golden 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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Mekong Golden 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.
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.
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.
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.
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 -
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.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mekong Golden is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?, in the dynamic environment Mekong Golden has struggled to respond to the nimble upstart competition. Mekong Golden has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
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.
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.
Using analytics as competitive advantage
– Mekong Golden 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 PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mekong Golden 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, 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.
Leveraging digital technologies
– Mekong Golden can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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 wage structure of Mekong Golden
– 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 Mekong Golden.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. 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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants?, Mekong Golden 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 .
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.
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.
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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