Paradise Bakery & Cafe: The Challenges of Success SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Paradise Bakery & Cafe: The Challenges of Success
Paradise Bakery and CafA?: The Challenges of Success traces the journey of entrepreneur Daniel Patterson from the founding of his bakery in Southern California, through the challenges of growth, to an eventual sale, and a post-acquisition crisis. The case focuses on three key decision points for Patterson. The first centers on his decision to hire an experienced outside chief financial officer with strategic vision, succeeding the longtime and well-liked accountant the company has used for years. Patterson must figure out how to communicate this decision to his senior leadership team, addressing their concerns about her compensation and whether she will fit into the company. The second challenge focuses on how Patterson should break the news to employees (and the rest of the world) that the founders have decided to sell the company to Panera Bread, a bigger competitor with whom Patterson had stoked a vibrant rivalry. Finally, once the deal with Panera is concluded, Patterson is faced with a decision of how to steer the business just as the 2008 financial crisis is snowballing, given that he promised Panera that Paradise would open 35 new stores in two years.
Swot Analysis of "Paradise Bakery & Cafe: The Challenges of Success" written by Joel Peterson, Mark W. George includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Patterson Panera facing as an external strategic factors. Some of the topics covered in Paradise Bakery & Cafe: The Challenges of Success case study are - Strategic Management Strategies, Growth strategy, Hiring, Mergers & acquisitions, Recession, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Paradise Bakery & Cafe: The Challenges of Success casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, there is backlash against globalization, technology disruption, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Paradise Bakery & Cafe: The Challenges of Success
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paradise Bakery & Cafe: The Challenges of Success case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Patterson Panera, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success can be done for the following purposes –
1. Strategic planning using facts provided in Paradise Bakery & Cafe: The Challenges of Success case study
2. Improving business portfolio management of Patterson Panera
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Patterson Panera
Strengths Paradise Bakery & Cafe: The Challenges of Success | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Patterson Panera in Paradise Bakery & Cafe: The Challenges of Success Harvard Business Review case study are -
Highly skilled collaborators
– Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Patterson Panera is present in almost all the verticals within the industry. This has provided firm in Paradise Bakery & Cafe: The Challenges of Success 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.
Analytics focus
– Patterson Panera 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 Joel Peterson, Mark W. George 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.
Cross disciplinary teams
– Horizontal connected teams at the Patterson Panera 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.
Strong track record of project management
– Patterson Panera is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Patterson Panera is one of the leading recruiters in the industry. Managers in the Paradise Bakery & Cafe: The Challenges of Success are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Patterson Panera in the sector have low bargaining power. Paradise Bakery & Cafe: The Challenges of Success has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Patterson Panera to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Patterson Panera is one of the most innovative firm in sector. Manager in Paradise Bakery & Cafe: The Challenges of Success Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Paradise Bakery & Cafe: The Challenges of Success 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.
Ability to lead change in Strategy & Execution field
– Patterson Panera 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 Patterson Panera in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Patterson Panera digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Patterson Panera 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.
Organizational Resilience of Patterson Panera
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Patterson Panera does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Paradise Bakery & Cafe: The Challenges of Success | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paradise Bakery & Cafe: The Challenges of Success are -
No frontier risks strategy
– After analyzing the HBR case study Paradise Bakery & Cafe: The Challenges of Success, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Capital Spending Reduction
– Even during the low interest decade, Patterson Panera 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paradise Bakery & Cafe: The Challenges of Success, it seems that the employees of Patterson Panera don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Patterson Panera 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Paradise Bakery & Cafe: The Challenges of Success 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 Patterson Panera has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Patterson Panera 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.
Low market penetration in new markets
– Outside its home market of Patterson Panera, firm in the HBR case study Paradise Bakery & Cafe: The Challenges of Success needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Patterson Panera products
– To increase the profitability and margins on the products, Patterson Panera needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Patterson Panera 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.
Increasing silos among functional specialists
– The organizational structure of Patterson Panera is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Patterson Panera needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Patterson Panera to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Paradise Bakery & Cafe: The Challenges of Success HBR case study mentions - Patterson Panera 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.
Opportunities Paradise Bakery & Cafe: The Challenges of Success | 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 Paradise Bakery & Cafe: The Challenges of Success are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Patterson Panera 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. Patterson Panera 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Patterson Panera can use these opportunities to build new business models that can help the communities that Patterson Panera operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Patterson Panera 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 Patterson Panera to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Patterson Panera 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 Strategy & Execution segment.
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. Patterson Panera 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 Patterson Panera can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Patterson Panera can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Learning at scale
– Online learning technologies has now opened space for Patterson Panera 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Patterson Panera 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 Patterson Panera to increase its market reach. Patterson Panera 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
– Patterson Panera can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Paradise Bakery & Cafe: The Challenges of Success 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.
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 Patterson Panera 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 Patterson Panera in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Threats Paradise Bakery & Cafe: The Challenges of Success External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Paradise Bakery & Cafe: The Challenges of Success are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Patterson Panera in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Patterson Panera needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Patterson Panera
– 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 Patterson Panera.
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.
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.
High dependence on third party suppliers
– Patterson Panera 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.
Environmental challenges
– Patterson Panera 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. Patterson Panera can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Patterson Panera with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Patterson Panera is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Patterson Panera can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Patterson Panera 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.
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 Patterson Panera business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Patterson Panera 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 Strategy & Execution industry regulations.
Weighted SWOT Analysis of Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Patterson Panera needs to make to build a sustainable competitive advantage.