KITKAT in Japan (C): Power of the Postal Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of KITKAT in Japan (C): Power of the Postal Service
Supplement to case W17424. In the spring of 2009, the KITKAT team was fresh from a successful marketing campaign targeting students. After reviewing recent figures however, they realized that they had a critical decision to make regarding the fate of the overall KITKAT brand portfolio: was KITKAT too sweet for some of their older customers? How could they address this issue of taste without undermining the overall brand that they had worked so hard to create through their recent postal service campaign? Philip Sugai is affiliated with Doshisha University.
Swot Analysis of "KITKAT in Japan (C): Power of the Postal Service" written by Philip Sugai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kitkat Postal facing as an external strategic factors. Some of the topics covered in KITKAT in Japan (C): Power of the Postal Service 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 (C): Power of the Postal Service casestudy better are - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of KITKAT in Japan (C): Power of the Postal Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in KITKAT in Japan (C): Power of the Postal Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kitkat Postal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kitkat Postal 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 (C): Power of the Postal Service can be done for the following purposes –
1. Strategic planning using facts provided in KITKAT in Japan (C): Power of the Postal Service case study
2. Improving business portfolio management of Kitkat Postal
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 Postal
Strengths KITKAT in Japan (C): Power of the Postal Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kitkat Postal in KITKAT in Japan (C): Power of the Postal Service Harvard Business Review case study are -
Highly skilled collaborators
– Kitkat Postal 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 KITKAT in Japan (C): Power of the Postal Service HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Kitkat Postal 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.
Effective Research and Development (R&D)
– Kitkat Postal 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 KITKAT in Japan (C): Power of the Postal Service - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Kitkat Postal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kitkat Postal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Sales & Marketing field
– Kitkat Postal 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 Postal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Kitkat Postal 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 Postal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in KITKAT in Japan (C): Power of the Postal Service Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the KITKAT in Japan (C): Power of the Postal Service 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.
Diverse revenue streams
– Kitkat Postal is present in almost all the verticals within the industry. This has provided firm in KITKAT in Japan (C): Power of the Postal Service 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.
Ability to recruit top talent
– Kitkat Postal is one of the leading recruiters in the industry. Managers in the KITKAT in Japan (C): Power of the Postal Service are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Kitkat Postal in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Kitkat Postal 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.
Successful track record of launching new products
– Kitkat Postal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kitkat Postal 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.
Weaknesses KITKAT in Japan (C): Power of the Postal Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KITKAT in Japan (C): Power of the Postal Service are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the KITKAT in Japan (C): Power of the Postal Service 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 Kitkat Postal has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Kitkat Postal 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Philip Sugai suggests that, Kitkat Postal 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.
Need for greater diversity
– Kitkat Postal 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.
Capital Spending Reduction
– Even during the low interest decade, Kitkat Postal 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.
High operating costs
– Compare to the competitors, firm in the HBR case study KITKAT in Japan (C): Power of the Postal Service 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 Kitkat Postal 's lucrative customers.
Slow to strategic competitive environment developments
– As KITKAT in Japan (C): Power of the Postal Service HBR case study mentions - Kitkat Postal 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 (C): Power of the Postal Service, in the dynamic environment Kitkat Postal has struggled to respond to the nimble upstart competition. Kitkat Postal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study KITKAT in Japan (C): Power of the Postal Service, is just above the industry average. Kitkat Postal 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.
Aligning sales with marketing
– It come across in the case study KITKAT in Japan (C): Power of the Postal Service 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 (C): Power of the Postal Service can leverage the sales team experience to cultivate customer relationships as Kitkat Postal is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Kitkat Postal, firm in the HBR case study KITKAT in Japan (C): Power of the Postal Service needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities KITKAT in Japan (C): Power of the Postal Service | 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 (C): Power of the Postal Service are -
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 Postal 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 Postal 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.
Better consumer reach
– The expansion of the 5G network will help Kitkat Postal to increase its market reach. Kitkat Postal 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.
Buying journey improvements
– Kitkat Postal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. KITKAT in Japan (C): Power of the Postal Service 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.
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 Postal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Kitkat Postal 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.
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 Postal 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kitkat Postal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kitkat Postal 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 Postal to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Kitkat Postal can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kitkat Postal can use these opportunities to build new business models that can help the communities that Kitkat Postal operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Creating value in data economy
– The success of analytics program of Kitkat Postal has opened avenues for new revenue streams for the organization in the industry. This can help Kitkat Postal to build a more holistic ecosystem as suggested in the KITKAT in Japan (C): Power of the Postal Service case study. Kitkat Postal can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kitkat Postal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Kitkat Postal 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 KITKAT in Japan (C): Power of the Postal Service - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kitkat Postal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats KITKAT in Japan (C): Power of the Postal Service 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 (C): Power of the Postal Service are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kitkat Postal 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 (C): Power of the Postal Service .
Regulatory challenges
– Kitkat Postal 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.
Environmental challenges
– Kitkat Postal 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 Postal can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Postal.
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 Postal needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Kitkat Postal
– 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 Postal.
Shortening product life cycle
– it is one of the major threat that Kitkat Postal is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Kitkat Postal 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.
Stagnating economy with rate increase
– Kitkat Postal 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kitkat Postal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Kitkat Postal has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kitkat Postal 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.
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 Postal business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of KITKAT in Japan (C): Power of the Postal Service 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 (C): Power of the Postal Service 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 (C): Power of the Postal Service 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 (C): Power of the Postal Service 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 (C): Power of the Postal Service 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 Postal needs to make to build a sustainable competitive advantage.
