NestlA? Ice Cream in Cuba SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of NestlA? Ice Cream in Cuba
In 1996, as the Castro regime began welcoming limited international investment back to Cuba, NestlA? signed a letter of intent with the Cuban government to build an ice cream factory in Havana's El Cotorro neighborhood. The plant, a joint venture between the Cuban government and NestlA?, would produce high-quality ice cream products for tourists and affluent Cubans. Nearly twenty years after this decision to enter the Cuban market, it is not clear how successful the investment has been and what the future might hold for NestlA? on the island. NestlA? has faced important challenges in Cuba-such as supply shortages, entrenched domestic competitors, and risk of government interference-but there has been evidence of some marketing and financial success. The 2015 normalization of diplomatic relations may bring new strategic threats and opportunities as American companies begin to eye the Cuban market and current competitors prepare for market changes. In the case, students will evaluate Nestle's investment and strategy for future growth in the Cuban market and consider the company's market entry strategy, operations, and finances.
Swot Analysis of "NestlA? Ice Cream in Cuba" written by Russell Walker, Kyle Bell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cuban Nestla facing as an external strategic factors. Some of the topics covered in NestlA? Ice Cream in Cuba case study are - Strategic Management Strategies, Globalization, Marketing, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the NestlA? Ice Cream in Cuba casestudy better are - – there is backlash against globalization, central banks are concerned over increasing inflation, wage bills are increasing, increasing commodity prices, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of NestlA? Ice Cream in Cuba
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NestlA? Ice Cream in Cuba case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cuban Nestla, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cuban Nestla 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 NestlA? Ice Cream in Cuba can be done for the following purposes –
1. Strategic planning using facts provided in NestlA? Ice Cream in Cuba case study
2. Improving business portfolio management of Cuban Nestla
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 Cuban Nestla
Strengths NestlA? Ice Cream in Cuba | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cuban Nestla in NestlA? Ice Cream in Cuba Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Cuban Nestla 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.
High brand equity
– Cuban Nestla has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cuban Nestla to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Cuban Nestla is one of the most innovative firm in sector. Manager in NestlA? Ice Cream in Cuba Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Cuban Nestla 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 NestlA? Ice Cream in Cuba - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Cuban Nestla in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Cuban Nestla is present in almost all the verticals within the industry. This has provided firm in NestlA? Ice Cream in Cuba 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.
Low bargaining power of suppliers
– Suppliers of Cuban Nestla in the sector have low bargaining power. NestlA? Ice Cream in Cuba has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cuban Nestla to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Cuban Nestla has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in NestlA? Ice Cream in Cuba 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.
Strong track record of project management
– Cuban Nestla is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Cuban Nestla
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cuban Nestla does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Cuban Nestla 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 Russell Walker, Kyle Bell 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.
Highly skilled collaborators
– Cuban Nestla 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 NestlA? Ice Cream in Cuba HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses NestlA? Ice Cream in Cuba | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NestlA? Ice Cream in Cuba are -
Slow decision making process
– As mentioned earlier in the report, Cuban Nestla 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. Cuban Nestla 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cuban Nestla is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study NestlA? Ice Cream in Cuba 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
Cuban Nestla 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.
Aligning sales with marketing
– It come across in the case study NestlA? Ice Cream in Cuba 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 NestlA? Ice Cream in Cuba can leverage the sales team experience to cultivate customer relationships as Cuban Nestla is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Cuban Nestla 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.
Interest costs
– Compare to the competition, Cuban Nestla 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, Cuban Nestla 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 NestlA? Ice Cream in Cuba, it seems that the employees of Cuban Nestla 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 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 Cuban Nestla supply chain. Even after few cautionary changes mentioned in the HBR case study - NestlA? Ice Cream in Cuba, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cuban Nestla vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As NestlA? Ice Cream in Cuba HBR case study mentions - Cuban Nestla 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.
Products dominated business model
– Even though Cuban Nestla 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 - NestlA? Ice Cream in Cuba should strive to include more intangible value offerings along with its core products and services.
Opportunities NestlA? Ice Cream in Cuba | 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 NestlA? Ice Cream in Cuba are -
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 Cuban Nestla 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.
Using analytics as competitive advantage
– Cuban Nestla 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 NestlA? Ice Cream in Cuba - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cuban Nestla 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, Cuban Nestla is facing challenges because of the dominance of functional experts in the organization. NestlA? Ice Cream in Cuba 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.
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. Cuban Nestla can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Cuban Nestla 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.
Buying journey improvements
– Cuban Nestla can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NestlA? Ice Cream in Cuba 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. Cuban Nestla can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Cuban Nestla in the consumer business. Now Cuban Nestla can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Cuban Nestla 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cuban Nestla can use these opportunities to build new business models that can help the communities that Cuban Nestla operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cuban Nestla 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, NestlA? Ice Cream in Cuba, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cuban Nestla 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 Cuban Nestla to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cuban Nestla can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats NestlA? Ice Cream in Cuba External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NestlA? Ice Cream in Cuba are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cuban Nestla in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cuban Nestla 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 Cuban Nestla is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Cuban Nestla 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
– Cuban Nestla has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Cuban Nestla 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.
Environmental challenges
– Cuban Nestla 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. Cuban Nestla can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Cuban Nestla.
High dependence on third party suppliers
– Cuban Nestla 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study NestlA? Ice Cream in Cuba, Cuban Nestla 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 .
Increasing wage structure of Cuban Nestla
– 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 Cuban Nestla.
Consumer confidence and its impact on Cuban Nestla demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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 Cuban Nestla business can come under increasing regulations regarding data privacy, data security, etc.
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. Cuban Nestla 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 NestlA? Ice Cream in Cuba 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 NestlA? Ice Cream in Cuba 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 NestlA? Ice Cream in Cuba 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 NestlA? Ice Cream in Cuba 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 NestlA? Ice Cream in Cuba 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 Cuban Nestla needs to make to build a sustainable competitive advantage.
