A Bayesian Examines the Lady Tasting Tea SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of A Bayesian Examines the Lady Tasting Tea
This technical note accompanies the case/class on "The Lady Tasting Tea" (LTT). It describes how a Bayesian would update his or her prior probability for the probability the LTT can correctly distinguish cups of tea based on whether the milk was added first or last. This long-form note describes both a discrete model (LTT has p of 0.5 or 0.8) and a more complicated continuous model (p is beta distributed). The abridged note (UVA-QA-0768) describes only the discrete model. The case/class itself provides a very useful analogy with which students can explore the elements of statistical inference.
Swot Analysis of "A Bayesian Examines the Lady Tasting Tea" written by Phillip E. Pfeifer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ltt Tea facing as an external strategic factors. Some of the topics covered in A Bayesian Examines the Lady Tasting Tea case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the A Bayesian Examines the Lady Tasting Tea casestudy better are - – there is increasing trade war between United States & China, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of A Bayesian Examines the Lady Tasting Tea
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A Bayesian Examines the Lady Tasting Tea case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ltt Tea, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ltt Tea 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 A Bayesian Examines the Lady Tasting Tea can be done for the following purposes –
1. Strategic planning using facts provided in A Bayesian Examines the Lady Tasting Tea case study
2. Improving business portfolio management of Ltt Tea
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 Ltt Tea
Strengths A Bayesian Examines the Lady Tasting Tea | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ltt Tea in A Bayesian Examines the Lady Tasting Tea Harvard Business Review case study are -
Training and development
– Ltt Tea has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in A Bayesian Examines the Lady Tasting Tea 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.
Ability to lead change in Technology & Operations field
– Ltt Tea 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 Ltt Tea in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Ltt Tea digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ltt Tea has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Technology & Operations industry
– A Bayesian Examines the Lady Tasting Tea firm has clearly differentiated products in the market place. This has enabled Ltt Tea to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Ltt Tea to invest into research and development (R&D) and innovation.
Organizational Resilience of Ltt Tea
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ltt Tea does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Ltt Tea has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ltt Tea to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Ltt Tea is one of the leading recruiters in the industry. Managers in the A Bayesian Examines the Lady Tasting Tea are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Ltt Tea is one of the most innovative firm in sector. Manager in A Bayesian Examines the Lady Tasting Tea Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Ltt Tea 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.
Low bargaining power of suppliers
– Suppliers of Ltt Tea in the sector have low bargaining power. A Bayesian Examines the Lady Tasting Tea has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ltt Tea to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Ltt Tea has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ltt Tea 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
– Ltt Tea is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses A Bayesian Examines the Lady Tasting Tea | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A Bayesian Examines the Lady Tasting Tea are -
Low market penetration in new markets
– Outside its home market of Ltt Tea, firm in the HBR case study A Bayesian Examines the Lady Tasting Tea needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study A Bayesian Examines the Lady Tasting Tea, it seems that the employees of Ltt Tea 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.
Skills based hiring
– The stress on hiring functional specialists at Ltt Tea 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ltt Tea 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.
Lack of clear differentiation of Ltt Tea products
– To increase the profitability and margins on the products, Ltt Tea needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study A Bayesian Examines the Lady Tasting Tea 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 A Bayesian Examines the Lady Tasting Tea can leverage the sales team experience to cultivate customer relationships as Ltt Tea is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study A Bayesian Examines the Lady Tasting Tea, is just above the industry average. Ltt Tea 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, Ltt Tea 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.
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 Ltt Tea supply chain. Even after few cautionary changes mentioned in the HBR case study - A Bayesian Examines the Lady Tasting Tea, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ltt Tea vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study A Bayesian Examines the Lady Tasting Tea, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Slow decision making process
– As mentioned earlier in the report, Ltt Tea 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. Ltt Tea 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.
Opportunities A Bayesian Examines the Lady Tasting Tea | 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 A Bayesian Examines the Lady Tasting Tea are -
Loyalty marketing
– Ltt Tea 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ltt Tea 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, A Bayesian Examines the Lady Tasting Tea, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Ltt Tea 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. Ltt Tea 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.
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 Ltt Tea 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.
Buying journey improvements
– Ltt Tea can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. A Bayesian Examines the Lady Tasting Tea 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.
Better consumer reach
– The expansion of the 5G network will help Ltt Tea to increase its market reach. Ltt Tea 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.
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. Ltt Tea can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Ltt Tea in the consumer business. Now Ltt Tea can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Ltt Tea 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.
Using analytics as competitive advantage
– Ltt Tea 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 A Bayesian Examines the Lady Tasting Tea - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ltt Tea to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Ltt Tea has opened avenues for new revenue streams for the organization in the industry. This can help Ltt Tea to build a more holistic ecosystem as suggested in the A Bayesian Examines the Lady Tasting Tea case study. Ltt Tea can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Ltt Tea 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ltt Tea can use these opportunities to build new business models that can help the communities that Ltt Tea operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats A Bayesian Examines the Lady Tasting Tea External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A Bayesian Examines the Lady Tasting Tea are -
Consumer confidence and its impact on Ltt Tea 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.
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. Ltt Tea can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Ltt Tea needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ltt Tea 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ltt Tea with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A Bayesian Examines the Lady Tasting Tea, Ltt Tea 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 .
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 Ltt Tea in the Technology & Operations sector and impact the bottomline of the organization.
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 Ltt Tea.
Technology acceleration in Forth Industrial Revolution
– Ltt Tea has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Ltt Tea 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.
Environmental challenges
– Ltt Tea 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. Ltt Tea can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Shortening product life cycle
– it is one of the major threat that Ltt Tea is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ltt Tea 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 A Bayesian Examines the Lady Tasting Tea .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of A Bayesian Examines the Lady Tasting Tea 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 A Bayesian Examines the Lady Tasting Tea 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 A Bayesian Examines the Lady Tasting Tea 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 A Bayesian Examines the Lady Tasting Tea 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 A Bayesian Examines the Lady Tasting Tea 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 Ltt Tea needs to make to build a sustainable competitive advantage.