Ready-to-Eat Breakfast Cereal Industry in 1994 (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ready-to-Eat Breakfast Cereal Industry in 1994 (A)
Ready-to-eat breakfast cereal has historically been a stable and highly profitable industry, dominated by the Big Three of Kellogg, General Mills, and Kraft General Foods (Post). In 1994, private label cereals are making significant market share gains, and promotional competition among the manufacturers of branded cereals is heating up. What steps should one of the Big Three take to prevent these trends from undermining industry profitability, especially in light of likely competitor reactions?
Swot Analysis of "Ready-to-Eat Breakfast Cereal Industry in 1994 (A)" written by Kenneth Corts includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cereals Cereal facing as an external strategic factors. Some of the topics covered in Ready-to-Eat Breakfast Cereal Industry in 1994 (A) case study are - Strategic Management Strategies, Competition, Pricing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ready-to-Eat Breakfast Cereal Industry in 1994 (A) casestudy better are - – increasing energy prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of Ready-to-Eat Breakfast Cereal Industry in 1994 (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ready-to-Eat Breakfast Cereal Industry in 1994 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cereals Cereal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cereals Cereal 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Ready-to-Eat Breakfast Cereal Industry in 1994 (A) case study
2. Improving business portfolio management of Cereals Cereal
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 Cereals Cereal
Strengths Ready-to-Eat Breakfast Cereal Industry in 1994 (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cereals Cereal in Ready-to-Eat Breakfast Cereal Industry in 1994 (A) Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Ready-to-Eat Breakfast Cereal Industry in 1994 (A) firm has clearly differentiated products in the market place. This has enabled Cereals Cereal to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cereals Cereal to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Cereals Cereal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cereals Cereal 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.
Strong track record of project management
– Cereals Cereal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Cereals Cereal 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Cereals Cereal 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.
Training and development
– Cereals Cereal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ready-to-Eat Breakfast Cereal Industry in 1994 (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.
Analytics focus
– Cereals Cereal 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 Kenneth Corts 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.
Effective Research and Development (R&D)
– Cereals Cereal 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (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.
Low bargaining power of suppliers
– Suppliers of Cereals Cereal in the sector have low bargaining power. Ready-to-Eat Breakfast Cereal Industry in 1994 (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cereals Cereal to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Cereals Cereal is present in almost all the verticals within the industry. This has provided firm in Ready-to-Eat Breakfast Cereal Industry in 1994 (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.
High brand equity
– Cereals Cereal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cereals Cereal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Cereals Cereal in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Ready-to-Eat Breakfast Cereal Industry in 1994 (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ready-to-Eat Breakfast Cereal Industry in 1994 (A) are -
Low market penetration in new markets
– Outside its home market of Cereals Cereal, firm in the HBR case study Ready-to-Eat Breakfast Cereal Industry in 1994 (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ready-to-Eat Breakfast Cereal Industry in 1994 (A) 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 Cereals Cereal has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Ready-to-Eat Breakfast Cereal Industry in 1994 (A) 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (A) can leverage the sales team experience to cultivate customer relationships as Cereals Cereal is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Cereals Cereal 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. Cereals Cereal 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ready-to-Eat Breakfast Cereal Industry in 1994 (A), it seems that the employees of Cereals Cereal 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 bargaining power of channel partners
– Because of the regulatory requirements, Kenneth Corts suggests that, Cereals Cereal 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.
Capital Spending Reduction
– Even during the low interest decade, Cereals Cereal 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.
Interest costs
– Compare to the competition, Cereals Cereal 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.
Need for greater diversity
– Cereals Cereal 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.
No frontier risks strategy
– After analyzing the HBR case study Ready-to-Eat Breakfast Cereal Industry in 1994 (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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cereals Cereal 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (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 Ready-to-Eat Breakfast Cereal Industry in 1994 (A) are -
Using analytics as competitive advantage
– Cereals Cereal 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cereals Cereal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Cereals Cereal to increase its market reach. Cereals Cereal 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
– Cereals Cereal 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.
Leveraging digital technologies
– Cereals Cereal 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.
Developing new processes and practices
– Cereals Cereal 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cereals Cereal 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.
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. Cereals Cereal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Cereals Cereal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ready-to-Eat Breakfast Cereal Industry in 1994 (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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cereals Cereal is facing challenges because of the dominance of functional experts in the organization. Ready-to-Eat Breakfast Cereal Industry in 1994 (A) 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.
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 Cereals Cereal 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.
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 Cereals Cereal in the consumer business. Now Cereals Cereal can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Cereals Cereal has opened avenues for new revenue streams for the organization in the industry. This can help Cereals Cereal to build a more holistic ecosystem as suggested in the Ready-to-Eat Breakfast Cereal Industry in 1994 (A) case study. Cereals Cereal 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. Cereals Cereal 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. Cereals Cereal 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.
Threats Ready-to-Eat Breakfast Cereal Industry in 1994 (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ready-to-Eat Breakfast Cereal Industry in 1994 (A) are -
Regulatory challenges
– Cereals Cereal 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.
Environmental challenges
– Cereals Cereal 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. Cereals Cereal can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cereals Cereal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Cereals Cereal 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.
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 Cereals Cereal in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Cereals Cereal 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cereals Cereal 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 Ready-to-Eat Breakfast Cereal Industry in 1994 (A) .
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. Cereals Cereal 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.
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 Cereals Cereal business can come under increasing regulations regarding data privacy, data security, etc.
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 Cereals Cereal.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ready-to-Eat Breakfast Cereal Industry in 1994 (A), Cereals Cereal 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cereals Cereal 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.
Weighted SWOT Analysis of Ready-to-Eat Breakfast Cereal Industry in 1994 (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 Ready-to-Eat Breakfast Cereal Industry in 1994 (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 Ready-to-Eat Breakfast Cereal Industry in 1994 (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 Ready-to-Eat Breakfast Cereal Industry in 1994 (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 Ready-to-Eat Breakfast Cereal Industry in 1994 (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 Cereals Cereal needs to make to build a sustainable competitive advantage.