The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying?
Rey Holdings Corp. was one of the two leading supermarket chains in Panama, with an estimated 30% market share,39 stores and a five-year aggressive expansion plan. In addition, Rey Holdings held a lower market share in the pharmaceutical and food industries. In 2011, the company was evaluating growth options through: a) point-of-sales and geographical growth; b) expanding product mix and store layout; and c) a strong market entry into the pharmaceutical industry through the acquisition of Metro Corporation. CLADEA's case collection
Authors :: Sergio Andres Olavarrieta, Fatima Alves Ribeiro, Eloisa Aravena
Swot Analysis of "The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying?" written by Sergio Andres Olavarrieta, Fatima Alves Ribeiro, Eloisa Aravena includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rey Panama facing as an external strategic factors. Some of the topics covered in The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? casestudy better are - – increasing energy prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, geopolitical disruptions, technology disruption, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rey Panama, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rey Panama 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? can be done for the following purposes –
1. Strategic planning using facts provided in The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? case study
2. Improving business portfolio management of Rey Panama
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 Rey Panama
Strengths The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rey Panama in The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Rey Panama are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Rey Panama is one of the leading recruiters in the industry. Managers in the The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Rey Panama has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rey Panama 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.
High switching costs
– The high switching costs that Rey Panama 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.
Innovation driven organization
– Rey Panama is one of the most innovative firm in sector. Manager in The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Rey Panama 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 Rey Panama is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Rey Panama 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 Sergio Andres Olavarrieta, Fatima Alves Ribeiro, Eloisa Aravena 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.
Strong track record of project management
– Rey Panama is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Rey Panama 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 Rey Panama in the sector have low bargaining power. The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rey Panama to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? firm has clearly differentiated products in the market place. This has enabled Rey Panama to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Rey Panama to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Rey Panama 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 Rey Panama in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? are -
Slow decision making process
– As mentioned earlier in the report, Rey Panama 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. Rey Panama 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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 Rey Panama has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Rey Panama is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Rey Panama needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rey Panama to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Rey Panama 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.
Slow to strategic competitive environment developments
– As The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? HBR case study mentions - Rey Panama 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Sergio Andres Olavarrieta, Fatima Alves Ribeiro, Eloisa Aravena suggests that, Rey Panama 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Rey Panama 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 Rey Panama, firm in the HBR case study The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Rey Panama products
– To increase the profitability and margins on the products, Rey Panama needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Rey Panama 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.
Capital Spending Reduction
– Even during the low interest decade, Rey Panama 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.
Opportunities The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? | 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? are -
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 Rey Panama in the consumer business. Now Rey Panama can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Rey Panama 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.
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 Rey Panama 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.
Better consumer reach
– The expansion of the 5G network will help Rey Panama to increase its market reach. Rey Panama 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rey Panama 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rey Panama can use these opportunities to build new business models that can help the communities that Rey Panama operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Rey Panama 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. Rey Panama 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.
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. Rey Panama can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Rey Panama 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.
Buying journey improvements
– Rey Panama can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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.
Building a culture of innovation
– managers at Rey Panama 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.
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. Rey Panama can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rey Panama is facing challenges because of the dominance of functional experts in the organization. The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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.
Threats The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? are -
Stagnating economy with rate increase
– Rey Panama 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.
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. Rey Panama can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Rey Panama
– 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 Rey Panama.
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 Rey Panama in the Strategy & Execution sector and impact the bottomline of the organization.
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 Rey Panama business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Rey Panama 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying?, Rey Panama 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 .
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 Rey Panama.
Regulatory challenges
– Rey Panama 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
– Rey Panama 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. Rey Panama can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rey Panama 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? .
Shortening product life cycle
– it is one of the major threat that Rey Panama is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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 The Future of Rey Holdings Corp. in Panama: Focusing or Diversifying? 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 Rey Panama needs to make to build a sustainable competitive advantage.
