BMB Group: A Dubai Confectioner Sweetening the World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BMB Group: A Dubai Confectioner Sweetening the World
By 2016, the BMB Group (BMB) had become the biggest producer of gourmet chocolates and Middle Eastern confectionery in the United Arab Emirates. Making private-label, highly customized confectionery for other brands had proven to be a winning strategy for the company; however, BMB's leaders felt it was time to transition to a business-to-consumer model. Establishing BMB brands was essential to continued growth because management believed the private-label space would soon fill up with competitors. Which market should BMB enter? There were three possible options: (1) go where Middle Eastern sweets were already popular but compete with many producers; (2) target Middle Eastern expatriate populations that might embrace the products and partner with local distributors; or (3) focus on markets where the population showed a preference for sweets but had relatively limited exposure to, or preference for, Middle Eastern sweets, and use BMB brands to set the standard. Would BMB's own brands aid the company's ambitious plans for expansion, or was the firm biting off "more than it could chew?" The authors Yusaf Akbar and Dileepa Peiris are affiliated with Central European University.
Authors :: Alexander Urquhart, Amit Dahiwadkar, Yusaf Akbar, Dileepa Peiris
Swot Analysis of "BMB Group: A Dubai Confectioner Sweetening the World" written by Alexander Urquhart, Amit Dahiwadkar, Yusaf Akbar, Dileepa Peiris includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bmb Sweets facing as an external strategic factors. Some of the topics covered in BMB Group: A Dubai Confectioner Sweetening the World case study are - Strategic Management Strategies, Entrepreneurship and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the BMB Group: A Dubai Confectioner Sweetening the World casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, increasing transportation and logistics costs, increasing household debt because of falling income levels, wage bills are increasing, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of BMB Group: A Dubai Confectioner Sweetening the World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BMB Group: A Dubai Confectioner Sweetening the World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bmb Sweets, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bmb Sweets 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 BMB Group: A Dubai Confectioner Sweetening the World can be done for the following purposes –
1. Strategic planning using facts provided in BMB Group: A Dubai Confectioner Sweetening the World case study
2. Improving business portfolio management of Bmb Sweets
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bmb Sweets
Strengths BMB Group: A Dubai Confectioner Sweetening the World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bmb Sweets in BMB Group: A Dubai Confectioner Sweetening the World Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– BMB Group: A Dubai Confectioner Sweetening the World firm has clearly differentiated products in the market place. This has enabled Bmb Sweets to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Bmb Sweets to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Bmb Sweets has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in BMB Group: A Dubai Confectioner Sweetening the World HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the BMB Group: A Dubai Confectioner Sweetening the World 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Bmb Sweets digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bmb Sweets 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.
Ability to lead change in Innovation & Entrepreneurship field
– Bmb Sweets 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 Bmb Sweets in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Bmb Sweets 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 BMB Group: A Dubai Confectioner Sweetening the World - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Bmb Sweets
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bmb Sweets does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Bmb Sweets in the sector have low bargaining power. BMB Group: A Dubai Confectioner Sweetening the World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bmb Sweets to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Bmb Sweets has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in BMB Group: A Dubai Confectioner Sweetening the World 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.
Successful track record of launching new products
– Bmb Sweets has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bmb Sweets 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 Bmb Sweets 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.
Analytics focus
– Bmb Sweets 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 Alexander Urquhart, Amit Dahiwadkar, Yusaf Akbar, Dileepa Peiris 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.
Weaknesses BMB Group: A Dubai Confectioner Sweetening the World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BMB Group: A Dubai Confectioner Sweetening the World are -
No frontier risks strategy
– After analyzing the HBR case study BMB Group: A Dubai Confectioner Sweetening the World, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study BMB Group: A Dubai Confectioner Sweetening the World, in the dynamic environment Bmb Sweets has struggled to respond to the nimble upstart competition. Bmb Sweets has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Bmb Sweets 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.
Interest costs
– Compare to the competition, Bmb Sweets 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.
Increasing silos among functional specialists
– The organizational structure of Bmb Sweets is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Bmb Sweets needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bmb Sweets to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As BMB Group: A Dubai Confectioner Sweetening the World HBR case study mentions - Bmb Sweets 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.
Low market penetration in new markets
– Outside its home market of Bmb Sweets, firm in the HBR case study BMB Group: A Dubai Confectioner Sweetening the World needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bmb Sweets is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BMB Group: A Dubai Confectioner Sweetening the World can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the BMB Group: A Dubai Confectioner Sweetening the World 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 Bmb Sweets has relatively successful track record of launching new products.
Lack of clear differentiation of Bmb Sweets products
– To increase the profitability and margins on the products, Bmb Sweets needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Bmb Sweets needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities BMB Group: A Dubai Confectioner Sweetening the World | 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 BMB Group: A Dubai Confectioner Sweetening the World 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 Bmb Sweets in the consumer business. Now Bmb Sweets can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Bmb Sweets to increase its market reach. Bmb Sweets 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 Bmb Sweets in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship 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, Bmb Sweets can use these opportunities to build new business models that can help the communities that Bmb Sweets operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Developing new processes and practices
– Bmb Sweets can develop new processes and procedures in Innovation & Entrepreneurship 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 Bmb Sweets 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bmb Sweets is facing challenges because of the dominance of functional experts in the organization. BMB Group: A Dubai Confectioner Sweetening the World 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.
Creating value in data economy
– The success of analytics program of Bmb Sweets has opened avenues for new revenue streams for the organization in the industry. This can help Bmb Sweets to build a more holistic ecosystem as suggested in the BMB Group: A Dubai Confectioner Sweetening the World case study. Bmb Sweets can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bmb Sweets 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bmb Sweets 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, BMB Group: A Dubai Confectioner Sweetening the World, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bmb Sweets 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 Bmb Sweets to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bmb Sweets can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Bmb Sweets 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.
Threats BMB Group: A Dubai Confectioner Sweetening the World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BMB Group: A Dubai Confectioner Sweetening the World are -
Regulatory challenges
– Bmb Sweets 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 Innovation & Entrepreneurship industry regulations.
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 Bmb Sweets.
Increasing wage structure of Bmb Sweets
– 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 Bmb Sweets.
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.
Consumer confidence and its impact on Bmb Sweets 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bmb Sweets in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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 Bmb Sweets 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 BMB Group: A Dubai Confectioner Sweetening the World, Bmb Sweets may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Technology acceleration in Forth Industrial Revolution
– Bmb Sweets has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Bmb Sweets needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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
– Bmb Sweets 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. Bmb Sweets can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Stagnating economy with rate increase
– Bmb Sweets 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 Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bmb Sweets can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Bmb Sweets 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.
Weighted SWOT Analysis of BMB Group: A Dubai Confectioner Sweetening the World 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 BMB Group: A Dubai Confectioner Sweetening the World 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 BMB Group: A Dubai Confectioner Sweetening the World 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 BMB Group: A Dubai Confectioner Sweetening the World 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 BMB Group: A Dubai Confectioner Sweetening the World 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 Bmb Sweets needs to make to build a sustainable competitive advantage.
