Nespresso: How to Protect Your Brand from Social Media Attacks SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nespresso: How to Protect Your Brand from Social Media Attacks
Solidar Switzerland a Non-Government Organisation, originally created in 1936 under the name of Swiss Labour Assistance SLA launched in September 2011 a campaign against NestlA? Nespresso. A viral video, named "Fair Trade - What else?" (https://www.youtube.com/watch?v=2G8QljHVn_A), was initially launched on their web page with the objective to raise awareness of social inequality of coffee farmers in South America and to raise awareness of Fair Trade and influence the buying behaviour of the Swiss population. Solidar asked their supporters to boost their campaign against Nespresso through a viral effect. This case explains what happened after, how Nespresso protected their brand and why Solidar chose Nespresso as a target. A fast reacting crisis management was key for Nespresso to gain control of the situation. The power of social media should never be underestimated and part of this case provides ideas and insight on how to respond on social media attacks. Further, this case explains the sustainability journey of Nespresso and share the learning of the organization which is also partly driven by this incident. This paper also contains a role play which helps to strengthen the crisis management and leadership skills. Learning objective: The case could be discussed as an example for: crisis management, management of reputational risk, leadership - negotiation, sustainability, brand management in particular social media management and communication strategy.
Authors :: Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner
Topics :: Strategy & Execution
Tags :: Corporate governance, Crisis management, International business, Leadership, Social platforms, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Nespresso: How to Protect Your Brand from Social Media Attacks" written by Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nespresso Solidar facing as an external strategic factors. Some of the topics covered in Nespresso: How to Protect Your Brand from Social Media Attacks case study are - Strategic Management Strategies, Corporate governance, Crisis management, International business, Leadership, Social platforms, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Nespresso: How to Protect Your Brand from Social Media Attacks casestudy better are - – there is backlash against globalization, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Nespresso: How to Protect Your Brand from Social Media Attacks
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nespresso: How to Protect Your Brand from Social Media Attacks case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nespresso Solidar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks can be done for the following purposes –
1. Strategic planning using facts provided in Nespresso: How to Protect Your Brand from Social Media Attacks case study
2. Improving business portfolio management of Nespresso Solidar
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 Nespresso Solidar
Strengths Nespresso: How to Protect Your Brand from Social Media Attacks | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nespresso Solidar in Nespresso: How to Protect Your Brand from Social Media Attacks Harvard Business Review case study are -
Organizational Resilience of Nespresso Solidar
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nespresso Solidar does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Nespresso Solidar is one of the leading recruiters in the industry. Managers in the Nespresso: How to Protect Your Brand from Social Media Attacks are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Nespresso: How to Protect Your Brand from Social Media Attacks Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Nespresso Solidar has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nespresso: How to Protect Your Brand from Social Media Attacks 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.
Learning organization
- Nespresso Solidar 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 Nespresso Solidar is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nespresso: How to Protect Your Brand from Social Media Attacks Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Nespresso Solidar 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 Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner 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.
Low bargaining power of suppliers
– Suppliers of Nespresso Solidar in the sector have low bargaining power. Nespresso: How to Protect Your Brand from Social Media Attacks has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nespresso Solidar to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Nespresso: How to Protect Your Brand from Social Media Attacks firm has clearly differentiated products in the market place. This has enabled Nespresso Solidar to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nespresso Solidar to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nespresso Solidar digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nespresso Solidar 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.
Successful track record of launching new products
– Nespresso Solidar has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nespresso Solidar has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Nespresso: How to Protect Your Brand from Social Media Attacks | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nespresso: How to Protect Your Brand from Social Media Attacks are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nespresso: How to Protect Your Brand from Social Media Attacks, in the dynamic environment Nespresso Solidar has struggled to respond to the nimble upstart competition. Nespresso Solidar has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Nespresso Solidar 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso Solidar has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Nespresso Solidar 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. Nespresso Solidar 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.
Increasing silos among functional specialists
– The organizational structure of Nespresso Solidar is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nespresso Solidar needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nespresso Solidar to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Stefan Michel, Anne Irigoyen, Karsten Ranitzsch, Philipp Lehner suggests that, Nespresso Solidar 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.
Aligning sales with marketing
– It come across in the case study Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks can leverage the sales team experience to cultivate customer relationships as Nespresso Solidar is planning to shift buying processes online.
High cash cycle compare to competitors
Nespresso Solidar 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nespresso Solidar is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nespresso: How to Protect Your Brand from Social Media Attacks 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 operating costs
– Compare to the competitors, firm in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso Solidar 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks, 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.
Opportunities Nespresso: How to Protect Your Brand from Social Media Attacks | 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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. Nespresso Solidar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Nespresso Solidar 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 Nespresso Solidar in the consumer business. Now Nespresso Solidar 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 Nespresso Solidar 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.
Buying journey improvements
– Nespresso Solidar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nespresso: How to Protect Your Brand from Social Media Attacks 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nespresso Solidar 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.
Creating value in data economy
– The success of analytics program of Nespresso Solidar has opened avenues for new revenue streams for the organization in the industry. This can help Nespresso Solidar to build a more holistic ecosystem as suggested in the Nespresso: How to Protect Your Brand from Social Media Attacks case study. Nespresso Solidar can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Nespresso Solidar can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nespresso Solidar can use these opportunities to build new business models that can help the communities that Nespresso Solidar operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Nespresso Solidar 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 Nespresso Solidar 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nespresso Solidar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nespresso Solidar 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 Nespresso Solidar to hire the very best people irrespective of their geographical location.
Threats Nespresso: How to Protect Your Brand from Social Media Attacks External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks are -
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. Nespresso Solidar 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.
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks .
Environmental challenges
– Nespresso Solidar 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. Nespresso Solidar can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nespresso Solidar 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.
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.
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 Nespresso Solidar in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Nespresso Solidar has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nespresso Solidar 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.
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. Nespresso Solidar needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Nespresso Solidar business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Nespresso Solidar 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.
Shortening product life cycle
– it is one of the major threat that Nespresso Solidar is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Nespresso Solidar
– 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 Nespresso Solidar.
Weighted SWOT Analysis of Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso: How to Protect Your Brand from Social Media Attacks 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 Nespresso Solidar needs to make to build a sustainable competitive advantage.