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 household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing energy prices, increasing transportation and logistics costs,
there is backlash against globalization, technology disruption, 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.
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.
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.
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.
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.
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.
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 brand equity
– Mekong Golden has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mekong Golden to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to 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.
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.
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 recruit top talent
– Mekong Golden is one of the leading recruiters in the industry. Managers in the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
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.
Need for greater diversity
– Mekong Golden 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.
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.
High cash cycle compare to competitors
Mekong Golden has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as 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?, is just above the industry average. Mekong Golden 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.
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.
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 bargaining power of channel partners
– Because of the regulatory requirements, Claudia Zeisberger, Peter Goodson, Kimberly McGinnis suggests that, Mekong Golden is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Skills based hiring
– The stress on hiring functional specialists at Mekong Golden has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
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 -
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.
Learning at scale
– Online learning technologies has now opened space for Mekong Golden to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mekong Golden in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
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.
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.
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 Mekong Golden in the consumer business. Now Mekong Golden can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Mekong Golden has opened avenues for new revenue streams for the organization in the industry. This can help Mekong Golden to build a more holistic ecosystem as suggested in the PE in Emerging Markets: Can Mekong Capital's Operating Advantage Boost the Value in its Exit from Golden Gate Restaurants? case study. Mekong Golden can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Developing new processes and practices
– Mekong Golden can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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.
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 -
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.
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.
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.
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.
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 .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mekong Golden will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
Stagnating economy with rate increase
– Mekong Golden can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mekong Golden can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mekong Golden needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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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