Baltic Beverages Holding: Competing in a Globalizing World (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Baltic Beverages Holding: Competing in a Globalizing World (A)
To maximize their effectiveness, color cases should be printed in color.The Finnish brewer Hartwall and the Swedish brewer Pripps had to decide how to react to the rapidly changing European political, economic, and business environment in 1989-1990.
Authors :: Juan Alcacer, Rasmus Molander, Rakeen Mabud
Swot Analysis of "Baltic Beverages Holding: Competing in a Globalizing World (A)" written by Juan Alcacer, Rasmus Molander, Rakeen Mabud includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Brewer Hartwall facing as an external strategic factors. Some of the topics covered in Baltic Beverages Holding: Competing in a Globalizing World (A) case study are - Strategic Management Strategies, Economics, Growth strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Baltic Beverages Holding: Competing in a Globalizing World (A) casestudy better are - – increasing energy prices, increasing commodity prices, there is backlash against globalization, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Baltic Beverages Holding: Competing in a Globalizing World (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Baltic Beverages Holding: Competing in a Globalizing World (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Brewer Hartwall, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Brewer Hartwall 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 Baltic Beverages Holding: Competing in a Globalizing World (A) can be done for the following purposes –
1. Strategic planning using facts provided in Baltic Beverages Holding: Competing in a Globalizing World (A) case study
2. Improving business portfolio management of Brewer Hartwall
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 Brewer Hartwall
Strengths Baltic Beverages Holding: Competing in a Globalizing World (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Brewer Hartwall in Baltic Beverages Holding: Competing in a Globalizing World (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Brewer Hartwall 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 Baltic Beverages Holding: Competing in a Globalizing World (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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Brewer Hartwall digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Brewer Hartwall has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Brewer Hartwall in the sector have low bargaining power. Baltic Beverages Holding: Competing in a Globalizing World (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Brewer Hartwall to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Baltic Beverages Holding: Competing in a Globalizing World (A) firm has clearly differentiated products in the market place. This has enabled Brewer Hartwall to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Brewer Hartwall to invest into research and development (R&D) and innovation.
Organizational Resilience of Brewer Hartwall
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Brewer Hartwall does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Brewer Hartwall 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 Baltic Beverages Holding: Competing in a Globalizing World (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Brewer Hartwall has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Baltic Beverages Holding: Competing in a Globalizing World (A) 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.
Diverse revenue streams
– Brewer Hartwall is present in almost all the verticals within the industry. This has provided firm in Baltic Beverages Holding: Competing in a Globalizing World (A) 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.
Ability to lead change in Strategy & Execution field
– Brewer Hartwall 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 Brewer Hartwall in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Brewer Hartwall is one of the most innovative firm in sector. Manager in Baltic Beverages Holding: Competing in a Globalizing World (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 Brewer Hartwall has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Brewer Hartwall has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Brewer Hartwall to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Baltic Beverages Holding: Competing in a Globalizing World (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Baltic Beverages Holding: Competing in a Globalizing World (A) are -
No frontier risks strategy
– After analyzing the HBR case study Baltic Beverages Holding: Competing in a Globalizing World (A), 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.
Lack of clear differentiation of Brewer Hartwall products
– To increase the profitability and margins on the products, Brewer Hartwall needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Brewer Hartwall 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 - Baltic Beverages Holding: Competing in a Globalizing World (A) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Brewer Hartwall is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Brewer Hartwall needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Brewer Hartwall to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Brewer Hartwall 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Baltic Beverages Holding: Competing in a Globalizing World (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 Brewer Hartwall 's lucrative customers.
Slow to strategic competitive environment developments
– As Baltic Beverages Holding: Competing in a Globalizing World (A) HBR case study mentions - Brewer Hartwall 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Brewer Hartwall 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.
Low market penetration in new markets
– Outside its home market of Brewer Hartwall, firm in the HBR case study Baltic Beverages Holding: Competing in a Globalizing World (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Baltic Beverages Holding: Competing in a Globalizing World (A), it seems that the employees of Brewer Hartwall 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.
Skills based hiring
– The stress on hiring functional specialists at Brewer Hartwall 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.
Opportunities Baltic Beverages Holding: Competing in a Globalizing World (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 Baltic Beverages Holding: Competing in a Globalizing World (A) are -
Better consumer reach
– The expansion of the 5G network will help Brewer Hartwall to increase its market reach. Brewer Hartwall 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.
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. Brewer Hartwall can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Brewer Hartwall can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Baltic Beverages Holding: Competing in a Globalizing World (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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Brewer Hartwall 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 Brewer Hartwall to hire the very best people irrespective of their geographical location.
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. Brewer Hartwall can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Brewer Hartwall has opened avenues for new revenue streams for the organization in the industry. This can help Brewer Hartwall to build a more holistic ecosystem as suggested in the Baltic Beverages Holding: Competing in a Globalizing World (A) case study. Brewer Hartwall can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Brewer Hartwall can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Brewer Hartwall 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Brewer Hartwall 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.
Learning at scale
– Online learning technologies has now opened space for Brewer Hartwall 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 Brewer Hartwall 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.
Leveraging digital technologies
– Brewer Hartwall 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.
Using analytics as competitive advantage
– Brewer Hartwall 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 Baltic Beverages Holding: Competing in a Globalizing World (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Brewer Hartwall to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Baltic Beverages Holding: Competing in a Globalizing World (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Baltic Beverages Holding: Competing in a Globalizing World (A) are -
Shortening product life cycle
– it is one of the major threat that Brewer Hartwall is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Brewer Hartwall in the Strategy & Execution sector and impact the bottomline of the organization.
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. Brewer Hartwall 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.
High dependence on third party suppliers
– Brewer Hartwall 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.
Stagnating economy with rate increase
– Brewer Hartwall 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.
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. Brewer Hartwall can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Brewer Hartwall
– 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 Brewer Hartwall.
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 Brewer Hartwall.
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 Brewer Hartwall business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Brewer Hartwall 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. Brewer Hartwall can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Baltic Beverages Holding: Competing in a Globalizing World (A), Brewer Hartwall 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 .
Consumer confidence and its impact on Brewer Hartwall 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.
Weighted SWOT Analysis of Baltic Beverages Holding: Competing in a Globalizing World (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 Baltic Beverages Holding: Competing in a Globalizing World (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 Baltic Beverages Holding: Competing in a Globalizing World (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 Baltic Beverages Holding: Competing in a Globalizing World (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 Baltic Beverages Holding: Competing in a Globalizing World (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 Brewer Hartwall needs to make to build a sustainable competitive advantage.