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 - – geopolitical disruptions, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, wage bills are increasing, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, 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 -
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.
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.
Ability to lead change in Strategy & Execution field
– Nespresso Solidar 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 Nespresso Solidar in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Nespresso Solidar 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
– Nespresso Solidar has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nespresso Solidar to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Nespresso Solidar in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Diverse revenue streams
– Nespresso Solidar is present in almost all the verticals within the industry. This has provided firm in Nespresso: How to Protect Your Brand from Social Media Attacks 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.
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.
Strong track record of project management
– Nespresso Solidar is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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 -
Products dominated business model
– Even though Nespresso Solidar 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 - Nespresso: How to Protect Your Brand from Social Media Attacks should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks, it seems that the employees of Nespresso Solidar 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 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.
Interest costs
– Compare to the competition, Nespresso Solidar 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.
Low market penetration in new markets
– Outside its home market of Nespresso Solidar, firm in the HBR case study Nespresso: How to Protect Your Brand from Social Media Attacks needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Nespresso Solidar supply chain. Even after few cautionary changes mentioned in the HBR case study - Nespresso: How to Protect Your Brand from Social Media Attacks, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nespresso Solidar vulnerable to further global disruptions in South East Asia.
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.
Lack of clear differentiation of Nespresso Solidar products
– To increase the profitability and margins on the products, Nespresso Solidar needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Nespresso Solidar has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Nespresso Solidar 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.
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 -
Using analytics as competitive advantage
– Nespresso Solidar 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 Nespresso: How to Protect Your Brand from Social Media Attacks - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nespresso Solidar to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Developing new processes and practices
– Nespresso Solidar can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nespresso Solidar is facing challenges because of the dominance of functional experts in the organization. Nespresso: How to Protect Your Brand from Social Media Attacks 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.
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.
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.
Manufacturing automation
– Nespresso Solidar 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.
Building a culture of innovation
– managers at Nespresso Solidar can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Better consumer reach
– The expansion of the 5G network will help Nespresso Solidar to increase its market reach. Nespresso Solidar 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.
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.
Learning at scale
– Online learning technologies has now opened space for Nespresso Solidar 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.
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 -
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nespresso Solidar with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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 .
Consumer confidence and its impact on Nespresso Solidar 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 Nespresso Solidar business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Nespresso Solidar 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nespresso: How to Protect Your Brand from Social Media Attacks, Nespresso Solidar 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 .
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.
