Case Study Description of Gino SA: Distribution Channel Management
Gino SA is a manufacturer of burner units that are sold through exclusive contracts with distributors. As a result, the three distributors have significant bargaining power with Gino. A leading boiler manufacturer, who is currently purchasing through a distributor, has approached Gino to receive OEM treatment (a further discount by purchasing the burners direct from the manufacturer in return for a commitment to purchase a percentage of their burners from Gino). In deciding whether to pursue the company's first direct OEM relationship, the marketing manager must consider the impact of his decision on the distributors, the competition, and the company's corporate management.
Swot Analysis of "Gino SA: Distribution Channel Management" written by Terry H. Deutscher, Alan Wenchu Yang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gino Burners facing as an external strategic factors. Some of the topics covered in Gino SA: Distribution Channel Management case study are - Strategic Management Strategies, Emerging markets, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Gino SA: Distribution Channel Management casestudy better are - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
there is backlash against globalization, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Gino SA: Distribution Channel Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gino SA: Distribution Channel Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gino Burners, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gino Burners 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 Gino SA: Distribution Channel Management can be done for the following purposes –
1. Strategic planning using facts provided in Gino SA: Distribution Channel Management case study
2. Improving business portfolio management of Gino Burners
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 Gino Burners
Strengths Gino SA: Distribution Channel Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gino Burners in Gino SA: Distribution Channel Management Harvard Business Review case study are -
Learning organization
- Gino Burners 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 Gino Burners is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gino SA: Distribution Channel Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Gino Burners 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.
High brand equity
– Gino Burners has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gino Burners to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Gino Burners is present in almost all the verticals within the industry. This has provided firm in Gino SA: Distribution Channel Management 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.
Cross disciplinary teams
– Horizontal connected teams at the Gino Burners are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Gino Burners has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gino Burners 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Gino Burners digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gino Burners 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.
Low bargaining power of suppliers
– Suppliers of Gino Burners in the sector have low bargaining power. Gino SA: Distribution Channel Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gino Burners to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Gino Burners 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 Terry H. Deutscher, Alan Wenchu Yang 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
– Gino Burners is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Gino SA: Distribution Channel Management firm has clearly differentiated products in the market place. This has enabled Gino Burners to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Gino Burners to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Gino SA: Distribution Channel Management 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.
Weaknesses Gino SA: Distribution Channel Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gino SA: Distribution Channel Management are -
No frontier risks strategy
– After analyzing the HBR case study Gino SA: Distribution Channel Management, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Gino Burners supply chain. Even after few cautionary changes mentioned in the HBR case study - Gino SA: Distribution Channel Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gino Burners vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Gino Burners 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.
Low market penetration in new markets
– Outside its home market of Gino Burners, firm in the HBR case study Gino SA: Distribution Channel Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Gino Burners is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Gino Burners needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gino Burners to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Gino SA: Distribution Channel Management 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 Gino Burners has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Gino SA: Distribution Channel Management HBR case study mentions - Gino Burners 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.
Need for greater diversity
– Gino Burners 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Gino SA: Distribution Channel Management 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 Gino Burners 's lucrative customers.
Lack of clear differentiation of Gino Burners products
– To increase the profitability and margins on the products, Gino Burners needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Gino SA: Distribution Channel Management 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 Gino SA: Distribution Channel Management can leverage the sales team experience to cultivate customer relationships as Gino Burners is planning to shift buying processes online.
Opportunities Gino SA: Distribution Channel Management | 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 Gino SA: Distribution Channel Management are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gino Burners 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, Gino SA: Distribution Channel Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Gino Burners 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.
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. Gino Burners can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gino Burners is facing challenges because of the dominance of functional experts in the organization. Gino SA: Distribution Channel Management 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.
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 Gino Burners in the consumer business. Now Gino Burners can target international markets with far fewer capital restrictions requirements than the existing system.
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 Gino Burners 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. Gino Burners 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. Gino Burners 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gino Burners can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Gino Burners 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 Gino SA: Distribution Channel Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gino Burners to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Gino Burners 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.
Creating value in data economy
– The success of analytics program of Gino Burners has opened avenues for new revenue streams for the organization in the industry. This can help Gino Burners to build a more holistic ecosystem as suggested in the Gino SA: Distribution Channel Management case study. Gino Burners can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Gino Burners to increase its market reach. Gino Burners 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.
Buying journey improvements
– Gino Burners can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gino SA: Distribution Channel Management 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.
Threats Gino SA: Distribution Channel Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gino SA: Distribution Channel Management are -
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 Gino Burners business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Gino Burners 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.
Increasing wage structure of Gino Burners
– 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 Gino Burners.
Shortening product life cycle
– it is one of the major threat that Gino Burners is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Gino Burners can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Gino Burners 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. Gino Burners can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Gino Burners needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Gino Burners has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Gino Burners 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.
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 Gino Burners.
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. Gino Burners 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.
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.
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 Gino Burners in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Gino SA: Distribution Channel Management 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 Gino SA: Distribution Channel Management 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 Gino SA: Distribution Channel Management 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 Gino SA: Distribution Channel Management 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 Gino SA: Distribution Channel Management 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 Gino Burners needs to make to build a sustainable competitive advantage.
