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Finding the Perfect Recipe: KKR's Buyout of WMF SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Finding the Perfect Recipe: KKR's Buyout of WMF


In May 2012, private equity firm KKR is considering the buyout of WMF group (WMF), a diversified kitchenware and professional coffee machine manufacturer headquartered in Geislingen, Germany. The deal seems a potentially compelling investment opportunity, with various options for value creation - expanding WMF's well-established brand to other geographies as well as reducing costs. Priorities must be set, however, to generate an attractive return by the end of the investment period. The deal team has to decide which business segments are worth putting more resources into and which to divest, which brands should be kept and which to trim off, and how to take up any operational slack without affecting the overall strategy.

Authors :: Vikas A. Aggarwal, Claudia Zeisberger, Jean Wee

Topics :: Innovation & Entrepreneurship

Tags :: Growth strategy, Mergers & acquisitions, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Finding the Perfect Recipe: KKR's Buyout of WMF" written by Vikas A. Aggarwal, Claudia Zeisberger, Jean Wee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wmf Buyout facing as an external strategic factors. Some of the topics covered in Finding the Perfect Recipe: KKR's Buyout of WMF case study are - Strategic Management Strategies, Growth strategy, Mergers & acquisitions and Innovation & Entrepreneurship.


Some of the macro environment factors that can be used to understand the Finding the Perfect Recipe: KKR's Buyout of WMF casestudy better are - – increasing commodity prices, cloud computing is disrupting traditional business models, technology disruption, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc



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Introduction to SWOT Analysis of Finding the Perfect Recipe: KKR's Buyout of WMF


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Finding the Perfect Recipe: KKR's Buyout of WMF case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wmf Buyout, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wmf Buyout 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 Finding the Perfect Recipe: KKR's Buyout of WMF can be done for the following purposes –
1. Strategic planning using facts provided in Finding the Perfect Recipe: KKR's Buyout of WMF case study
2. Improving business portfolio management of Wmf Buyout
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 Wmf Buyout




Strengths Finding the Perfect Recipe: KKR's Buyout of WMF | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Wmf Buyout in Finding the Perfect Recipe: KKR's Buyout of WMF Harvard Business Review case study are -

Learning organization

- Wmf Buyout 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 Wmf Buyout is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Finding the Perfect Recipe: KKR's Buyout of WMF Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Analytics focus

– Wmf Buyout 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 Vikas A. Aggarwal, Claudia Zeisberger, Jean Wee 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.

High switching costs

– The high switching costs that Wmf Buyout 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.

Sustainable margins compare to other players in Innovation & Entrepreneurship industry

– Finding the Perfect Recipe: KKR's Buyout of WMF firm has clearly differentiated products in the market place. This has enabled Wmf Buyout to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Wmf Buyout to invest into research and development (R&D) and innovation.

Organizational Resilience of Wmf Buyout

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wmf Buyout does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Training and development

– Wmf Buyout has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Finding the Perfect Recipe: KKR's Buyout of WMF 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.

Effective Research and Development (R&D)

– Wmf Buyout 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 Finding the Perfect Recipe: KKR's Buyout of WMF - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to recruit top talent

– Wmf Buyout is one of the leading recruiters in the industry. Managers in the Finding the Perfect Recipe: KKR's Buyout of WMF are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Cross disciplinary teams

– Horizontal connected teams at the Wmf Buyout 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.

Highly skilled collaborators

– Wmf Buyout 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 Finding the Perfect Recipe: KKR's Buyout of WMF HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Innovation driven organization

– Wmf Buyout is one of the most innovative firm in sector. Manager in Finding the Perfect Recipe: KKR's Buyout of WMF Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Diverse revenue streams

– Wmf Buyout is present in almost all the verticals within the industry. This has provided firm in Finding the Perfect Recipe: KKR's Buyout of WMF 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.






Weaknesses Finding the Perfect Recipe: KKR's Buyout of WMF | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Finding the Perfect Recipe: KKR's Buyout of WMF are -

Slow to strategic competitive environment developments

– As Finding the Perfect Recipe: KKR's Buyout of WMF HBR case study mentions - Wmf Buyout 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.

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 Wmf Buyout supply chain. Even after few cautionary changes mentioned in the HBR case study - Finding the Perfect Recipe: KKR's Buyout of WMF, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wmf Buyout vulnerable to further global disruptions in South East Asia.

Aligning sales with marketing

– It come across in the case study Finding the Perfect Recipe: KKR's Buyout of WMF 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 Finding the Perfect Recipe: KKR's Buyout of WMF can leverage the sales team experience to cultivate customer relationships as Wmf Buyout is planning to shift buying processes online.

Skills based hiring

– The stress on hiring functional specialists at Wmf Buyout 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.

Slow decision making process

– As mentioned earlier in the report, Wmf Buyout 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. Wmf Buyout 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Finding the Perfect Recipe: KKR's Buyout of WMF, in the dynamic environment Wmf Buyout has struggled to respond to the nimble upstart competition. Wmf Buyout 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

Wmf Buyout 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.

Need for greater diversity

– Wmf Buyout has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High operating costs

– Compare to the competitors, firm in the HBR case study Finding the Perfect Recipe: KKR's Buyout of WMF has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Wmf Buyout 's lucrative customers.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Finding the Perfect Recipe: KKR's Buyout of WMF 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 Wmf Buyout has relatively successful track record of launching new products.

Products dominated business model

– Even though Wmf Buyout 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 - Finding the Perfect Recipe: KKR's Buyout of WMF should strive to include more intangible value offerings along with its core products and services.




Opportunities Finding the Perfect Recipe: KKR's Buyout of WMF | 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 Finding the Perfect Recipe: KKR's Buyout of WMF are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Wmf Buyout 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.

Using analytics as competitive advantage

– Wmf Buyout 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 Finding the Perfect Recipe: KKR's Buyout of WMF - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wmf Buyout to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. Wmf Buyout can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Better consumer reach

– The expansion of the 5G network will help Wmf Buyout to increase its market reach. Wmf Buyout 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Wmf Buyout is facing challenges because of the dominance of functional experts in the organization. Finding the Perfect Recipe: KKR's Buyout of WMF 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.

Learning at scale

– Online learning technologies has now opened space for Wmf Buyout 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.

Loyalty marketing

– Wmf Buyout 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Wmf Buyout 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.

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 Wmf Buyout in the consumer business. Now Wmf Buyout can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– Wmf Buyout 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wmf Buyout 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 Wmf Buyout to hire the very best people irrespective of their geographical location.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wmf Buyout can use these opportunities to build new business models that can help the communities that Wmf Buyout operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Wmf Buyout 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, Finding the Perfect Recipe: KKR's Buyout of WMF, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.




Threats Finding the Perfect Recipe: KKR's Buyout of WMF External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Finding the Perfect Recipe: KKR's Buyout of WMF are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Wmf Buyout 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 Finding the Perfect Recipe: KKR's Buyout of WMF .

Environmental challenges

– Wmf Buyout 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. Wmf Buyout can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.

High dependence on third party suppliers

– Wmf Buyout 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.

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 Wmf Buyout.

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. Wmf Buyout 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Finding the Perfect Recipe: KKR's Buyout of WMF, Wmf Buyout 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 .

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. Wmf Buyout needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.

Regulatory challenges

– Wmf Buyout 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.

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.

Shortening product life cycle

– it is one of the major threat that Wmf Buyout is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

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 Wmf Buyout 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 Wmf Buyout in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.




Weighted SWOT Analysis of Finding the Perfect Recipe: KKR's Buyout of WMF 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 Finding the Perfect Recipe: KKR's Buyout of WMF 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 Finding the Perfect Recipe: KKR's Buyout of WMF 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 Finding the Perfect Recipe: KKR's Buyout of WMF 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 Finding the Perfect Recipe: KKR's Buyout of WMF 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 Wmf Buyout needs to make to build a sustainable competitive advantage.



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