KITKAT in Japan (B): The Roots of Premiumization SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of KITKAT in Japan (B): The Roots of Premiumization
Supplement to case W17424. The KITKAT team had experienced great success over the past few years by building a powerful and resonating brand and enhancing their production capabilities to enable them to adapt to changing demands from their channel partners. However, the harsh realities of a changing market demographic, and increasingly powerful convenience store chains, created a clear sense of urgency for creative solutions to continue their growth. The KITKAT team leaders felt that the ideas that had been generated in the closing months of 2007 held enormous potential to create growth through a previously overlooked retail channel. As they sat down to review the strategies, they wondered: Had they overlooked any important details that could affect their 2008 year? Philip Sugai is affiliated with Doshisha University.
Swot Analysis of "KITKAT in Japan (B): The Roots of Premiumization" written by Philip Sugai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kitkat Overlooked facing as an external strategic factors. Some of the topics covered in KITKAT in Japan (B): The Roots of Premiumization case study are - Strategic Management Strategies, Customers, Growth strategy, Innovation and Sales & Marketing.
Some of the macro environment factors that can be used to understand the KITKAT in Japan (B): The Roots of Premiumization casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of KITKAT in Japan (B): The Roots of Premiumization
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in KITKAT in Japan (B): The Roots of Premiumization case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kitkat Overlooked, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kitkat Overlooked 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 KITKAT in Japan (B): The Roots of Premiumization can be done for the following purposes –
1. Strategic planning using facts provided in KITKAT in Japan (B): The Roots of Premiumization case study
2. Improving business portfolio management of Kitkat Overlooked
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kitkat Overlooked
Strengths KITKAT in Japan (B): The Roots of Premiumization | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kitkat Overlooked in KITKAT in Japan (B): The Roots of Premiumization Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– KITKAT in Japan (B): The Roots of Premiumization firm has clearly differentiated products in the market place. This has enabled Kitkat Overlooked to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Kitkat Overlooked to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Kitkat Overlooked is present in almost all the verticals within the industry. This has provided firm in KITKAT in Japan (B): The Roots of Premiumization 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Kitkat Overlooked digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kitkat Overlooked 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.
Strong track record of project management
– Kitkat Overlooked is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Kitkat Overlooked 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 Philip Sugai 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.
Low bargaining power of suppliers
– Suppliers of Kitkat Overlooked in the sector have low bargaining power. KITKAT in Japan (B): The Roots of Premiumization has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kitkat Overlooked to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Kitkat Overlooked are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Sales & Marketing field
– Kitkat Overlooked 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 Kitkat Overlooked in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Kitkat Overlooked is one of the leading recruiters in the industry. Managers in the KITKAT in Japan (B): The Roots of Premiumization are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Kitkat Overlooked 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.
Learning organization
- Kitkat Overlooked 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 Kitkat Overlooked is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in KITKAT in Japan (B): The Roots of Premiumization Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the KITKAT in Japan (B): The Roots of Premiumization 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.
Weaknesses KITKAT in Japan (B): The Roots of Premiumization | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KITKAT in Japan (B): The Roots of Premiumization are -
Interest costs
– Compare to the competition, Kitkat Overlooked has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kitkat Overlooked is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study KITKAT in Japan (B): The Roots of Premiumization can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Kitkat Overlooked 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.
High cash cycle compare to competitors
Kitkat Overlooked 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 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 Kitkat Overlooked supply chain. Even after few cautionary changes mentioned in the HBR case study - KITKAT in Japan (B): The Roots of Premiumization, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kitkat Overlooked vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study KITKAT in Japan (B): The Roots of Premiumization, in the dynamic environment Kitkat Overlooked has struggled to respond to the nimble upstart competition. Kitkat Overlooked has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Philip Sugai suggests that, Kitkat Overlooked is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study KITKAT in Japan (B): The Roots of Premiumization, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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 to strategic competitive environment developments
– As KITKAT in Japan (B): The Roots of Premiumization HBR case study mentions - Kitkat Overlooked 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.
Aligning sales with marketing
– It come across in the case study KITKAT in Japan (B): The Roots of Premiumization 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 KITKAT in Japan (B): The Roots of Premiumization can leverage the sales team experience to cultivate customer relationships as Kitkat Overlooked is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Kitkat Overlooked 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 KITKAT in Japan (B): The Roots of Premiumization | 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 KITKAT in Japan (B): The Roots of Premiumization 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 Kitkat Overlooked in the consumer business. Now Kitkat Overlooked can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kitkat Overlooked 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 Kitkat Overlooked to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Kitkat Overlooked can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Kitkat Overlooked 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kitkat Overlooked 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. Kitkat Overlooked can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Kitkat Overlooked can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kitkat Overlooked 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, KITKAT in Japan (B): The Roots of Premiumization, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Kitkat Overlooked to increase its market reach. Kitkat Overlooked 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.
Developing new processes and practices
– Kitkat Overlooked can develop new processes and procedures in Sales & Marketing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kitkat Overlooked is facing challenges because of the dominance of functional experts in the organization. KITKAT in Japan (B): The Roots of Premiumization 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kitkat Overlooked 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.
Loyalty marketing
– Kitkat Overlooked 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kitkat Overlooked can use these opportunities to build new business models that can help the communities that Kitkat Overlooked operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats KITKAT in Japan (B): The Roots of Premiumization External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study KITKAT in Japan (B): The Roots of Premiumization are -
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.
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 Kitkat Overlooked business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Kitkat Overlooked 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kitkat Overlooked 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 KITKAT in Japan (B): The Roots of Premiumization .
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 Kitkat Overlooked in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Kitkat Overlooked
– 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 Kitkat Overlooked.
Environmental challenges
– Kitkat Overlooked 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. Kitkat Overlooked can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kitkat Overlooked can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Kitkat Overlooked.
Shortening product life cycle
– it is one of the major threat that Kitkat Overlooked is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Kitkat Overlooked 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.
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. Kitkat Overlooked needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of KITKAT in Japan (B): The Roots of Premiumization 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 KITKAT in Japan (B): The Roots of Premiumization 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 KITKAT in Japan (B): The Roots of Premiumization 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 KITKAT in Japan (B): The Roots of Premiumization 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 KITKAT in Japan (B): The Roots of Premiumization 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 Kitkat Overlooked needs to make to build a sustainable competitive advantage.