Beanz Versus Starbucks: Personality in a Cup! SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Beanz Versus Starbucks: Personality in a Cup!
Beanz Espresso Bar is located in downtown Charlottetown, Prince Edward Island, Canada. It is operating in a market with high rivalry (11 other coffee businesses in a two-block radius). The economy in Prince Edward Island has seen several diners, restaurants, and coffee shops close their doors within the past few years, while simultaneously drawing in large corporate businesses such as Starbucks and Running Room. Beanz has thus far survived the major environmental changes and managed to keep its clientele and the owners, Lori and Doug, feel it is time to either sell Beanz and leave the industry, or exploit their competitive advantages to grow and capture more market share. Beanz specializes in high-quality, baked-from-scratch food and specialty coffee beverages. The cafA? is known for its artistic vibe, warm atmosphere, and eccentric staff. After operating Beanz for 16 years, the couple has made few changes to the decor, menu, the set-up. Internally, the company faces several issues concerning management control systems, marketing, and strategic direction. Lori and Doug must choose between five different directions for the future of Beanz.
Authors :: Edward Gamble, Peter Moroz, Stewart Thornhill, Haley Beer
Swot Analysis of "Beanz Versus Starbucks: Personality in a Cup!" written by Edward Gamble, Peter Moroz, Stewart Thornhill, Haley Beer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beanz Lori facing as an external strategic factors. Some of the topics covered in Beanz Versus Starbucks: Personality in a Cup! case study are - Strategic Management Strategies, Leadership, Organizational culture, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Beanz Versus Starbucks: Personality in a Cup! casestudy better are - – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , wage bills are increasing, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Beanz Versus Starbucks: Personality in a Cup!
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Beanz Versus Starbucks: Personality in a Cup! case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beanz Lori, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beanz Lori 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 Beanz Versus Starbucks: Personality in a Cup! can be done for the following purposes –
1. Strategic planning using facts provided in Beanz Versus Starbucks: Personality in a Cup! case study
2. Improving business portfolio management of Beanz Lori
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 Beanz Lori
Strengths Beanz Versus Starbucks: Personality in a Cup! | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beanz Lori in Beanz Versus Starbucks: Personality in a Cup! Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Beanz Lori in the sector have low bargaining power. Beanz Versus Starbucks: Personality in a Cup! has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beanz Lori to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Beanz Lori is one of the leading recruiters in the industry. Managers in the Beanz Versus Starbucks: Personality in a Cup! are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Beanz Lori in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Beanz Lori has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beanz Lori to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Beanz Lori
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beanz Lori does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Beanz Lori 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Beanz Lori digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beanz Lori 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.
High switching costs
– The high switching costs that Beanz Lori 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.
Strong track record of project management
– Beanz Lori is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Beanz Lori 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 Beanz Versus Starbucks: Personality in a Cup! - 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
– Beanz Lori 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 Edward Gamble, Peter Moroz, Stewart Thornhill, Haley Beer 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
– Beanz Lori 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 Beanz Versus Starbucks: Personality in a Cup! HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Beanz Versus Starbucks: Personality in a Cup! | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beanz Versus Starbucks: Personality in a Cup! are -
High operating costs
– Compare to the competitors, firm in the HBR case study Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Lori 's lucrative customers.
Lack of clear differentiation of Beanz Lori products
– To increase the profitability and margins on the products, Beanz Lori needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Beanz Lori is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Beanz Versus Starbucks: Personality in a Cup! can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Beanz Lori 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.
Slow to strategic competitive environment developments
– As Beanz Versus Starbucks: Personality in a Cup! HBR case study mentions - Beanz Lori takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Versus Starbucks: Personality in a Cup! can leverage the sales team experience to cultivate customer relationships as Beanz Lori is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Beanz Versus Starbucks: Personality in a Cup!, 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 bargaining power of channel partners
– Because of the regulatory requirements, Edward Gamble, Peter Moroz, Stewart Thornhill, Haley Beer suggests that, Beanz Lori 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.
Low market penetration in new markets
– Outside its home market of Beanz Lori, firm in the HBR case study Beanz Versus Starbucks: Personality in a Cup! needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Beanz Lori is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Beanz Lori needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beanz Lori to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Beanz Versus Starbucks: Personality in a Cup!, is just above the industry average. Beanz Lori 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.
Opportunities Beanz Versus Starbucks: Personality in a Cup! | 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 Beanz Versus Starbucks: Personality in a Cup! are -
Creating value in data economy
– The success of analytics program of Beanz Lori has opened avenues for new revenue streams for the organization in the industry. This can help Beanz Lori to build a more holistic ecosystem as suggested in the Beanz Versus Starbucks: Personality in a Cup! case study. Beanz Lori can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Beanz Lori 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. Beanz Lori 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beanz Lori is facing challenges because of the dominance of functional experts in the organization. Beanz Versus Starbucks: Personality in a Cup! 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.
Using analytics as competitive advantage
– Beanz Lori 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 Beanz Versus Starbucks: Personality in a Cup! - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beanz Lori to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Beanz Lori can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Beanz Versus Starbucks: Personality in a Cup! 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.
Better consumer reach
– The expansion of the 5G network will help Beanz Lori to increase its market reach. Beanz Lori 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.
Loyalty marketing
– Beanz Lori has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beanz Lori 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.
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. Beanz Lori can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Beanz Lori 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beanz Lori 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 Beanz Lori to hire the very best people irrespective of their geographical location.
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 Beanz Lori in the consumer business. Now Beanz Lori 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 Beanz Lori 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.
Threats Beanz Versus Starbucks: Personality in a Cup! External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Beanz Versus Starbucks: Personality in a Cup! are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Beanz Lori can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Beanz Lori.
Technology acceleration in Forth Industrial Revolution
– Beanz Lori has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Beanz Lori 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beanz Lori 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.
Environmental challenges
– Beanz Lori 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. Beanz Lori can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Beanz Lori 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 Beanz Versus Starbucks: Personality in a Cup!, Beanz Lori 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 .
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 Beanz Lori in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Beanz Lori needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beanz Lori 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 Beanz Versus Starbucks: Personality in a Cup! .
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 Beanz Lori
– 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 Beanz Lori.
Weighted SWOT Analysis of Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Versus Starbucks: Personality in a Cup! 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 Beanz Lori needs to make to build a sustainable competitive advantage.