Case Study Description of Kangaroo Tail Winery Limited (B)
Supplement to case TB0499. Two Australian entrepreneurs, Anna Amphlett and Andrew Ferris decided to start a new venture to produce, market and distribute high quality premium wine in Tasmania, an island off the southern coast of Australia. Amphlett and Ferris developed a business plan for a winery business based on a new brand to be called Kangaroo Tail. Amphlett and Ferris were retired executives each with more than twenty years of experience at Constellation Brands Inc. and Treasury Wine Estates. After a year of experimentation, Amphlett and Ferris finally settled upon a blend that yielded wines with the right aroma, taste, and color. They negotiated a loan requiring them to provide the bank with a business plan and projected financial statements. They are unsure whether the wine operation will be a profitable use of their capital.
Swot Analysis of "Kangaroo Tail Winery Limited (B)" written by Graeme Rankine includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ferris Amphlett facing as an external strategic factors. Some of the topics covered in Kangaroo Tail Winery Limited (B) case study are - Strategic Management Strategies, Performance measurement and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Kangaroo Tail Winery Limited (B) casestudy better are - – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
Introduction to SWOT Analysis of Kangaroo Tail Winery Limited (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kangaroo Tail Winery Limited (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ferris Amphlett, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ferris Amphlett 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 Kangaroo Tail Winery Limited (B) can be done for the following purposes –
1. Strategic planning using facts provided in Kangaroo Tail Winery Limited (B) case study
2. Improving business portfolio management of Ferris Amphlett
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ferris Amphlett
Strengths Kangaroo Tail Winery Limited (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ferris Amphlett in Kangaroo Tail Winery Limited (B) Harvard Business Review case study are -
Highly skilled collaborators
– Ferris Amphlett 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 Kangaroo Tail Winery Limited (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Ferris Amphlett 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 Ferris Amphlett is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kangaroo Tail Winery Limited (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Ferris Amphlett has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ferris Amphlett to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Ferris Amphlett is present in almost all the verticals within the industry. This has provided firm in Kangaroo Tail Winery Limited (B) 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.
Low bargaining power of suppliers
– Suppliers of Ferris Amphlett in the sector have low bargaining power. Kangaroo Tail Winery Limited (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ferris Amphlett to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Ferris Amphlett is one of the leading recruiters in the industry. Managers in the Kangaroo Tail Winery Limited (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Ferris Amphlett 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)
– Ferris Amphlett 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 Kangaroo Tail Winery Limited (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Ferris Amphlett
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ferris Amphlett does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Ferris Amphlett digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ferris Amphlett 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 Ferris Amphlett in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Ferris Amphlett has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kangaroo Tail Winery Limited (B) 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.
Weaknesses Kangaroo Tail Winery Limited (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kangaroo Tail Winery Limited (B) are -
Aligning sales with marketing
– It come across in the case study Kangaroo Tail Winery Limited (B) 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 Kangaroo Tail Winery Limited (B) can leverage the sales team experience to cultivate customer relationships as Ferris Amphlett is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Ferris Amphlett 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kangaroo Tail Winery Limited (B), is just above the industry average. Ferris Amphlett 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Kangaroo Tail Winery Limited (B) 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 Ferris Amphlett 's lucrative customers.
Products dominated business model
– Even though Ferris Amphlett 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 - Kangaroo Tail Winery Limited (B) should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kangaroo Tail Winery Limited (B), it seems that the employees of Ferris Amphlett 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.
Slow to strategic competitive environment developments
– As Kangaroo Tail Winery Limited (B) HBR case study mentions - Ferris Amphlett 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.
Capital Spending Reduction
– Even during the low interest decade, Ferris Amphlett 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 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 Ferris Amphlett supply chain. Even after few cautionary changes mentioned in the HBR case study - Kangaroo Tail Winery Limited (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ferris Amphlett vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Ferris Amphlett 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.
Slow decision making process
– As mentioned earlier in the report, Ferris Amphlett 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. Ferris Amphlett 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.
Opportunities Kangaroo Tail Winery Limited (B) | 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 Kangaroo Tail Winery Limited (B) are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Ferris Amphlett can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ferris Amphlett 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 Ferris Amphlett to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ferris Amphlett is facing challenges because of the dominance of functional experts in the organization. Kangaroo Tail Winery Limited (B) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ferris Amphlett can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ferris Amphlett 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.
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 Ferris Amphlett 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ferris Amphlett 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, Kangaroo Tail Winery Limited (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ferris Amphlett can use these opportunities to build new business models that can help the communities that Ferris Amphlett operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Better consumer reach
– The expansion of the 5G network will help Ferris Amphlett to increase its market reach. Ferris Amphlett 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.
Leveraging digital technologies
– Ferris Amphlett can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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 Ferris Amphlett in the consumer business. Now Ferris Amphlett can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Ferris Amphlett has opened avenues for new revenue streams for the organization in the industry. This can help Ferris Amphlett to build a more holistic ecosystem as suggested in the Kangaroo Tail Winery Limited (B) case study. Ferris Amphlett can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Ferris Amphlett 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 Finance & Accounting segment.
Threats Kangaroo Tail Winery Limited (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kangaroo Tail Winery Limited (B) are -
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. Ferris Amphlett 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 Ferris Amphlett business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Ferris Amphlett
– 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 Ferris Amphlett.
High dependence on third party suppliers
– Ferris Amphlett 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ferris Amphlett can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Ferris Amphlett in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ferris Amphlett with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ferris Amphlett needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Ferris Amphlett 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
– Ferris Amphlett 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 Ferris Amphlett is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kangaroo Tail Winery Limited (B), Ferris Amphlett may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Weighted SWOT Analysis of Kangaroo Tail Winery Limited (B) 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 Kangaroo Tail Winery Limited (B) 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 Kangaroo Tail Winery Limited (B) 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 Kangaroo Tail Winery Limited (B) 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 Kangaroo Tail Winery Limited (B) 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 Ferris Amphlett needs to make to build a sustainable competitive advantage.
