Parker Biscuits, Inc.: Venturing into China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Parker Biscuits, Inc.: Venturing into China
Carol Wittenberg's first major task as president of the Asia/Pacific business for Parker's Biscuits is to set up a joint venture to manufacture biscuits in China. The team that Wittenberg has put together to find a joint venture partner has narrowed the choice down to two quite different Chinese enterprises. One partner is larger, has broader product lines, and offers a better estimated financial payback on the investment. The other appears to be much more open to Parker's manufacturing management methods. Either choice will represent the company's largest single investment in a joint venture to date.
Swot Analysis of "Parker Biscuits, Inc.: Venturing into China" written by Ann E. Gray includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Biscuits Parker's facing as an external strategic factors. Some of the topics covered in Parker Biscuits, Inc.: Venturing into China case study are - Strategic Management Strategies, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Parker Biscuits, Inc.: Venturing into China casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing commodity prices, there is increasing trade war between United States & China, increasing energy prices, technology disruption, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Parker Biscuits, Inc.: Venturing into China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Parker Biscuits, Inc.: Venturing into China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Biscuits Parker's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Biscuits Parker's 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 Parker Biscuits, Inc.: Venturing into China can be done for the following purposes –
1. Strategic planning using facts provided in Parker Biscuits, Inc.: Venturing into China case study
2. Improving business portfolio management of Biscuits Parker's
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Biscuits Parker's
Strengths Parker Biscuits, Inc.: Venturing into China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Biscuits Parker's in Parker Biscuits, Inc.: Venturing into China Harvard Business Review case study are -
High brand equity
– Biscuits Parker's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Biscuits Parker's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Biscuits Parker's is present in almost all the verticals within the industry. This has provided firm in Parker Biscuits, Inc.: Venturing into China 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.
Strong track record of project management
– Biscuits Parker's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Technology & Operations field
– Biscuits Parker's 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 Biscuits Parker's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Biscuits Parker's 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.
Effective Research and Development (R&D)
– Biscuits Parker's 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 Parker Biscuits, Inc.: Venturing into China - 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
– Biscuits Parker's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Parker Biscuits, Inc.: Venturing into China 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.
Sustainable margins compare to other players in Technology & Operations industry
– Parker Biscuits, Inc.: Venturing into China firm has clearly differentiated products in the market place. This has enabled Biscuits Parker's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Biscuits Parker's to invest into research and development (R&D) and innovation.
Organizational Resilience of Biscuits Parker's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Biscuits Parker's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Biscuits Parker's is one of the leading recruiters in the industry. Managers in the Parker Biscuits, Inc.: Venturing into China are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Biscuits Parker's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Biscuits Parker's 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 Biscuits Parker's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Parker Biscuits, Inc.: Venturing into China Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Parker Biscuits, Inc.: Venturing into China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Parker Biscuits, Inc.: Venturing into China are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Parker Biscuits, Inc.: Venturing into China 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 Biscuits Parker's has relatively successful track record of launching new products.
High cash cycle compare to competitors
Biscuits Parker's 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 strategic competitive environment developments
– As Parker Biscuits, Inc.: Venturing into China HBR case study mentions - Biscuits Parker's 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.
Skills based hiring
– The stress on hiring functional specialists at Biscuits Parker's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Biscuits Parker's 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 Parker Biscuits, Inc.: Venturing into China 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 Parker Biscuits, Inc.: Venturing into China can leverage the sales team experience to cultivate customer relationships as Biscuits Parker's is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Parker Biscuits, Inc.: Venturing into China, in the dynamic environment Biscuits Parker's has struggled to respond to the nimble upstart competition. Biscuits Parker's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Parker Biscuits, Inc.: Venturing into China, is just above the industry average. Biscuits Parker's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Biscuits Parker's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Parker Biscuits, Inc.: Venturing into China, it seems that the employees of Biscuits Parker's 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.
Capital Spending Reduction
– Even during the low interest decade, Biscuits Parker's 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 Parker Biscuits, Inc.: Venturing into China | 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 Parker Biscuits, Inc.: Venturing into China are -
Developing new processes and practices
– Biscuits Parker's can develop new processes and procedures in Technology & Operations 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.
Learning at scale
– Online learning technologies has now opened space for Biscuits Parker's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Biscuits Parker's can use these opportunities to build new business models that can help the communities that Biscuits Parker's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Manufacturing automation
– Biscuits Parker's can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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. Biscuits Parker's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Biscuits Parker's 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 Biscuits Parker's to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Biscuits Parker's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Biscuits Parker's 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 Technology & Operations segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Biscuits Parker's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Biscuits Parker's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Parker Biscuits, Inc.: Venturing into China 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.
Loyalty marketing
– Biscuits Parker's 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.
Better consumer reach
– The expansion of the 5G network will help Biscuits Parker's to increase its market reach. Biscuits Parker's 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.
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 Biscuits Parker's in the consumer business. Now Biscuits Parker's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Parker Biscuits, Inc.: Venturing into China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Parker Biscuits, Inc.: Venturing into China 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. Biscuits Parker's 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.
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 Biscuits Parker's.
Increasing wage structure of Biscuits Parker's
– 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 Biscuits Parker's.
Technology acceleration in Forth Industrial Revolution
– Biscuits Parker's has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Biscuits Parker's needs to keep up with the evolution of technology in the Technology & Operations 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.
Stagnating economy with rate increase
– Biscuits Parker's 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.
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 Biscuits Parker's business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Parker Biscuits, Inc.: Venturing into China, Biscuits Parker's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
High dependence on third party suppliers
– Biscuits Parker's 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.
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. Biscuits Parker's needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Biscuits Parker's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Biscuits Parker's is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Biscuits Parker's 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. Biscuits Parker's can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Parker Biscuits, Inc.: Venturing into China 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 Parker Biscuits, Inc.: Venturing into China 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 Parker Biscuits, Inc.: Venturing into China 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 Parker Biscuits, Inc.: Venturing into China 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 Parker Biscuits, Inc.: Venturing into China 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 Biscuits Parker's needs to make to build a sustainable competitive advantage.