Case Study Description of Frito-Lay, Inc.: A Strategic Transition--1990-92
Describes the changes in structure, management systems, people, and processes instituted by the company. Provides students with an opportunity to explore the nature of "IT-enabled" organizational change and the process through which it is implemented. Also enables a more general discussion of the challenges that companies face in organizing and managing in the 1990s and the actions that they are taking to meet those challenges. Affords an opportunity to confront the rhetoric of the emergence of a "new organization paradigm" with the reality.
Swot Analysis of "Frito-Lay, Inc.: A Strategic Transition--1990-92" written by Lynda M. Applegate includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rhetoric 92 facing as an external strategic factors. Some of the topics covered in Frito-Lay, Inc.: A Strategic Transition--1990-92 case study are - Strategic Management Strategies, IT, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the Frito-Lay, Inc.: A Strategic Transition--1990-92 casestudy better are - – there is backlash against globalization, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Frito-Lay, Inc.: A Strategic Transition--1990-92
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Frito-Lay, Inc.: A Strategic Transition--1990-92 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rhetoric 92, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rhetoric 92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 can be done for the following purposes –
1. Strategic planning using facts provided in Frito-Lay, Inc.: A Strategic Transition--1990-92 case study
2. Improving business portfolio management of Rhetoric 92
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 Rhetoric 92
Strengths Frito-Lay, Inc.: A Strategic Transition--1990-92 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rhetoric 92 in Frito-Lay, Inc.: A Strategic Transition--1990-92 Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Frito-Lay, Inc.: A Strategic Transition--1990-92 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Rhetoric 92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 - 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 Rhetoric 92 in the sector have low bargaining power. Frito-Lay, Inc.: A Strategic Transition--1990-92 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rhetoric 92 to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Rhetoric 92 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rhetoric 92 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.
Innovation driven organization
– Rhetoric 92 is one of the most innovative firm in sector. Manager in Frito-Lay, Inc.: A Strategic Transition--1990-92 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– Frito-Lay, Inc.: A Strategic Transition--1990-92 firm has clearly differentiated products in the market place. This has enabled Rhetoric 92 to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Rhetoric 92 to invest into research and development (R&D) and innovation.
Learning organization
- Rhetoric 92 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 Rhetoric 92 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Frito-Lay, Inc.: A Strategic Transition--1990-92 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Rhetoric 92 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.
Cross disciplinary teams
– Horizontal connected teams at the Rhetoric 92 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.
Training and development
– Rhetoric 92 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Frito-Lay, Inc.: A Strategic Transition--1990-92 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.
Organizational Resilience of Rhetoric 92
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rhetoric 92 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Rhetoric 92 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Frito-Lay, Inc.: A Strategic Transition--1990-92 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Frito-Lay, Inc.: A Strategic Transition--1990-92 are -
High cash cycle compare to competitors
Rhetoric 92 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Frito-Lay, Inc.: A Strategic Transition--1990-92 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 Rhetoric 92 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Rhetoric 92 is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Rhetoric 92 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rhetoric 92 to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Rhetoric 92 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 - Frito-Lay, Inc.: A Strategic Transition--1990-92 should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Frito-Lay, Inc.: A Strategic Transition--1990-92, is just above the industry average. Rhetoric 92 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.
Need for greater diversity
– Rhetoric 92 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Rhetoric 92 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.
Interest costs
– Compare to the competition, Rhetoric 92 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.
Skills based hiring
– The stress on hiring functional specialists at Rhetoric 92 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.
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 Rhetoric 92 supply chain. Even after few cautionary changes mentioned in the HBR case study - Frito-Lay, Inc.: A Strategic Transition--1990-92, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rhetoric 92 vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Frito-Lay, Inc.: A Strategic Transition--1990-92 HBR case study mentions - Rhetoric 92 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.
Opportunities Frito-Lay, Inc.: A Strategic Transition--1990-92 | 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rhetoric 92 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 Rhetoric 92 to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Rhetoric 92 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.
Creating value in data economy
– The success of analytics program of Rhetoric 92 has opened avenues for new revenue streams for the organization in the industry. This can help Rhetoric 92 to build a more holistic ecosystem as suggested in the Frito-Lay, Inc.: A Strategic Transition--1990-92 case study. Rhetoric 92 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rhetoric 92 can use these opportunities to build new business models that can help the communities that Rhetoric 92 operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rhetoric 92 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. Rhetoric 92 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rhetoric 92 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.
Building a culture of innovation
– managers at Rhetoric 92 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.
Better consumer reach
– The expansion of the 5G network will help Rhetoric 92 to increase its market reach. Rhetoric 92 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 Rhetoric 92 in the consumer business. Now Rhetoric 92 can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rhetoric 92 can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Frito-Lay, Inc.: A Strategic Transition--1990-92, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Rhetoric 92 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.
Developing new processes and practices
– Rhetoric 92 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rhetoric 92 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Frito-Lay, Inc.: A Strategic Transition--1990-92 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Frito-Lay, Inc.: A Strategic Transition--1990-92 are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Frito-Lay, Inc.: A Strategic Transition--1990-92, Rhetoric 92 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 .
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rhetoric 92 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Rhetoric 92 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.
Regulatory challenges
– Rhetoric 92 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 Technology & Operations industry regulations.
Shortening product life cycle
– it is one of the major threat that Rhetoric 92 is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rhetoric 92 in the Technology & Operations industry. The Technology & Operations 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.
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 Rhetoric 92 business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Rhetoric 92 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. Rhetoric 92 can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Rhetoric 92 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.
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 Rhetoric 92.
High dependence on third party suppliers
– Rhetoric 92 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, Rhetoric 92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 .
Stagnating economy with rate increase
– Rhetoric 92 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.
Weighted SWOT Analysis of Frito-Lay, Inc.: A Strategic Transition--1990-92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 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 Frito-Lay, Inc.: A Strategic Transition--1990-92 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 Rhetoric 92 needs to make to build a sustainable competitive advantage.