KITKAT in Japan (A): Sparking a Cultural Revolution SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of KITKAT in Japan (A): Sparking a Cultural Revolution
In 2008, the marketing manager for NestlA? Japan's confectionery business and his team were struggling to redefine the KITKAT brand within the Japanese market. KITKAT as a brand faced a real threat as the retail environment rapidly shifted toward increasingly powerful convenience store chains and consumer preferences shifted toward more novel consumable products. With more than 200 companies competing within Japan's crowded and relatively stable confectionery market, NestlA? Japan was facing the harsh realities of Japan's famed position as the world's toughest consumer market. To address these challenges, NestlA? Japan worked over 15 years to instill deep meaning in the KITKAT brand and then, based upon this foundation, created a comprehensive product portfolio. How can KITKAT capitalize on its past success as it moves forward? Philip Sugai is affiliated with Doshisha University.
Swot Analysis of "KITKAT in Japan (A): Sparking a Cultural Revolution" written by Philip Sugai, Adrian Sossna includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kitkat Nestla facing as an external strategic factors. Some of the topics covered in KITKAT in Japan (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy,
supply chains are disrupted by pandemic , wage bills are increasing, etc
Introduction to SWOT Analysis of KITKAT in Japan (A): Sparking a Cultural Revolution
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in KITKAT in Japan (A): Sparking a Cultural Revolution case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kitkat Nestla, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kitkat Nestla 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 (A): Sparking a Cultural Revolution can be done for the following purposes –
1. Strategic planning using facts provided in KITKAT in Japan (A): Sparking a Cultural Revolution case study
2. Improving business portfolio management of Kitkat Nestla
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 Nestla
Strengths KITKAT in Japan (A): Sparking a Cultural Revolution | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kitkat Nestla in KITKAT in Japan (A): Sparking a Cultural Revolution Harvard Business Review case study are -
Diverse revenue streams
– Kitkat Nestla is present in almost all the verticals within the industry. This has provided firm in KITKAT in Japan (A): Sparking a Cultural Revolution 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 Nestla digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kitkat Nestla 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.
Superior customer experience
– The customer experience strategy of Kitkat Nestla in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Kitkat Nestla 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 Nestla in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the KITKAT in Japan (A): Sparking a Cultural Revolution 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.
Cross disciplinary teams
– Horizontal connected teams at the Kitkat Nestla 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.
Analytics focus
– Kitkat Nestla 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, Adrian Sossna 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.
Innovation driven organization
– Kitkat Nestla is one of the most innovative firm in sector. Manager in KITKAT in Japan (A): Sparking a Cultural Revolution Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Kitkat Nestla 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 Nestla is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in KITKAT in Japan (A): Sparking a Cultural Revolution Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Kitkat Nestla has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kitkat Nestla 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 brand equity
– Kitkat Nestla has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kitkat Nestla to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Kitkat Nestla 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.
Weaknesses KITKAT in Japan (A): Sparking a Cultural Revolution | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KITKAT in Japan (A): Sparking a Cultural Revolution are -
Aligning sales with marketing
– It come across in the case study KITKAT in Japan (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution can leverage the sales team experience to cultivate customer relationships as Kitkat Nestla is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Kitkat Nestla 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.
Increasing silos among functional specialists
– The organizational structure of Kitkat Nestla is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Kitkat Nestla needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kitkat Nestla to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Kitkat Nestla 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study KITKAT in Japan (A): Sparking a Cultural Revolution, is just above the industry average. Kitkat Nestla 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kitkat Nestla is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study KITKAT in Japan (A): Sparking a Cultural Revolution can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Kitkat Nestla 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 - KITKAT in Japan (A): Sparking a Cultural Revolution should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Kitkat Nestla 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. Kitkat Nestla 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.
Capital Spending Reduction
– Even during the low interest decade, Kitkat Nestla 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.
Slow to strategic competitive environment developments
– As KITKAT in Japan (A): Sparking a Cultural Revolution HBR case study mentions - Kitkat Nestla 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study KITKAT in Japan (A): Sparking a Cultural Revolution, in the dynamic environment Kitkat Nestla has struggled to respond to the nimble upstart competition. Kitkat Nestla has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities KITKAT in Japan (A): Sparking a Cultural Revolution | 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 (A): Sparking a Cultural Revolution are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kitkat Nestla in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 Nestla in the consumer business. Now Kitkat Nestla can target international markets with far fewer capital restrictions requirements than the existing system.
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 Nestla can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kitkat Nestla can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kitkat Nestla 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 (A): Sparking a Cultural Revolution, 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 Kitkat Nestla 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 Nestla to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Kitkat Nestla has opened avenues for new revenue streams for the organization in the industry. This can help Kitkat Nestla to build a more holistic ecosystem as suggested in the KITKAT in Japan (A): Sparking a Cultural Revolution case study. Kitkat Nestla can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Kitkat Nestla can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Kitkat Nestla to increase its market reach. Kitkat Nestla 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 Nestla 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.
Manufacturing automation
– Kitkat Nestla can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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 Nestla can use these opportunities to build new business models that can help the communities that Kitkat Nestla operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Buying journey improvements
– Kitkat Nestla can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. KITKAT in Japan (A): Sparking a Cultural Revolution 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.
Threats KITKAT in Japan (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution are -
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 Nestla needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Kitkat Nestla 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.
Shortening product life cycle
– it is one of the major threat that Kitkat Nestla is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Kitkat Nestla 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kitkat Nestla with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Nestla can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Kitkat Nestla 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.
Regulatory challenges
– Kitkat Nestla 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 Sales & Marketing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kitkat Nestla 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 (A): Sparking a Cultural Revolution .
Technology acceleration in Forth Industrial Revolution
– Kitkat Nestla has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kitkat Nestla needs to keep up with the evolution of technology in the Sales & Marketing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study KITKAT in Japan (A): Sparking a Cultural Revolution, Kitkat Nestla may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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 Nestla business can come under increasing regulations regarding data privacy, data security, etc.
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 Nestla in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of KITKAT in Japan (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution 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 (A): Sparking a Cultural Revolution 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 Nestla needs to make to build a sustainable competitive advantage.