Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A)
Describes the retailer-supplier negotiations of Frey Farms Produce in its growth from a small local produce supplier to becoming a supplier for Wal-Mart, the world's largest retailer. The (A) case sets up three negotiations led by Sarah Talley of Frey Farms Produce in order to sell produce to Wal-Mart, manage price expectations during a difficult growing season, and deal with issues of co-management. The (B) case describes strategies, tactics, and the results of these negotiations, along with broader insights from the protagonist into a general approach to retailer-supplier negotiations.
Swot Analysis of "Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A)" written by James K. Sebenius, Ellen Knebel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Frey Produce facing as an external strategic factors. Some of the topics covered in Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) case study are - Strategic Management Strategies, Entrepreneurship, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) casestudy better are - – talent flight as more people leaving formal jobs, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, wage bills are increasing, 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,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Frey Produce, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Frey Produce 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) can be done for the following purposes –
1. Strategic planning using facts provided in Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) case study
2. Improving business portfolio management of Frey Produce
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 Frey Produce
Strengths Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Frey Produce in Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) Harvard Business Review case study are -
Innovation driven organization
– Frey Produce is one of the most innovative firm in sector. Manager in Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Frey Produce 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.
Highly skilled collaborators
– Frey Produce 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Frey Produce is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Frey Produce has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Frey Produce to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Frey Produce has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Frey Produce 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.
Low bargaining power of suppliers
– Suppliers of Frey Produce in the sector have low bargaining power. Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Frey Produce to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Frey Produce in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Frey Produce 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Frey Produce 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 James K. Sebenius, Ellen Knebel 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.
Operational resilience
– The operational resilience strategy in the Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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
– Frey Produce 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 Frey Produce in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Frey Produce has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) HBR case study mentions - Frey Produce 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A), it seems that the employees of Frey Produce 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A), is just above the industry average. Frey Produce needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Frey Produce 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.
Interest costs
– Compare to the competition, Frey Produce 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, Frey Produce 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.
Products dominated business model
– Even though Frey Produce 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 - Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Frey Produce, firm in the HBR case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) can leverage the sales team experience to cultivate customer relationships as Frey Produce is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Frey Produce 's lucrative customers.
Opportunities Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) | 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Frey Produce 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 Frey Produce to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Frey Produce 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.
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 Frey Produce in the consumer business. Now Frey Produce can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Frey Produce can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Frey Produce can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Frey Produce can use these opportunities to build new business models that can help the communities that Frey Produce operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Frey Produce 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Frey Produce to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Frey Produce 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Frey Produce is facing challenges because of the dominance of functional experts in the organization. Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Frey Produce to increase its market reach. Frey Produce 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Frey Produce can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Frey Produce 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. Frey Produce 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.
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. Frey Produce can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) are -
Stagnating economy with rate increase
– Frey Produce 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Frey Produce with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing wage structure of Frey Produce
– 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 Frey Produce.
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. Frey Produce 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.
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 Frey Produce.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Frey Produce 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) .
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. Frey Produce needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Frey Produce in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A), Frey Produce 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 .
Shortening product life cycle
– it is one of the major threat that Frey Produce is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Frey Produce 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. Frey Produce can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Frey Produce can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Sarah Talley and Frey Farms Produce: Negotiating with Wal-Mart (A) 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 Frey Produce needs to make to build a sustainable competitive advantage.
