Case Study Description of Uni-President: Crisis Management Strategy
On January 16, 2015, the director of the public affairs division of Uni-President Enterprises Corp. (Uni-President) reflected on growing safety concerns in the food industry. At the time, organizations operated in an uncertain environment, marked by varied suppliers of raw materials, changing government policies and regulations, and shifting consumption choices. As business environments grew ever more uncertain, the likelihood of a product crisis increased. The food industry was especially vulnerable, and large food manufacturers confronted difficult situations in which their hard-won reputations could be destroyed by a single crisis. Even with its strong track record and reputation, Uni-President could not have avoided the consequences of a 2014 food scandal. Although Uni-President had survived the recent spate of food safety crises, more would be likely to come. Was Uni-President's crisis management approach sufficient, appropriate, and effective? What should Uni-President do going forward? Ting Yu is affiliated with University of New South Wales.
Authors :: Huei-Mei Liang, Ting Yu, Chung-Cheng Tu
Swot Analysis of "Uni-President: Crisis Management Strategy" written by Huei-Mei Liang, Ting Yu, Chung-Cheng Tu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uni Food facing as an external strategic factors. Some of the topics covered in Uni-President: Crisis Management Strategy case study are - Strategic Management Strategies, Manufacturing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Uni-President: Crisis Management Strategy casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation, technology disruption, geopolitical disruptions, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Uni-President: Crisis Management Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uni-President: Crisis Management Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uni Food, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uni Food 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 Uni-President: Crisis Management Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Uni-President: Crisis Management Strategy case study
2. Improving business portfolio management of Uni Food
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 Uni Food
Strengths Uni-President: Crisis Management Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uni Food in Uni-President: Crisis Management Strategy Harvard Business Review case study are -
Successful track record of launching new products
– Uni Food has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Uni Food has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Uni Food has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Uni Food to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Uni Food 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 Huei-Mei Liang, Ting Yu, Chung-Cheng Tu 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Uni Food digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Uni Food 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 Uni Food in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Uni Food 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 Uni-President: Crisis Management Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Uni Food is present in almost all the verticals within the industry. This has provided firm in Uni-President: Crisis Management Strategy 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.
Training and development
– Uni Food has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Uni-President: Crisis Management Strategy 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.
Low bargaining power of suppliers
– Suppliers of Uni Food in the sector have low bargaining power. Uni-President: Crisis Management Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Uni Food to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Uni-President: Crisis Management Strategy 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Uni-President: Crisis Management Strategy firm has clearly differentiated products in the market place. This has enabled Uni Food to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Uni Food to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Uni Food 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.
Weaknesses Uni-President: Crisis Management Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uni-President: Crisis Management Strategy are -
High operating costs
– Compare to the competitors, firm in the HBR case study Uni-President: Crisis Management Strategy 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 Uni Food 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Uni Food is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Uni Food needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Uni Food to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Uni Food 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Uni-President: Crisis Management Strategy, is just above the industry average. Uni Food needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Uni-President: Crisis Management Strategy HBR case study mentions - Uni Food 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, Uni Food 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 bargaining power of channel partners
– Because of the regulatory requirements, Huei-Mei Liang, Ting Yu, Chung-Cheng Tu suggests that, Uni Food 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Uni-President: Crisis Management Strategy, in the dynamic environment Uni Food has struggled to respond to the nimble upstart competition. Uni Food has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Uni Food 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Uni-President: Crisis Management Strategy, it seems that the employees of Uni Food 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.
Skills based hiring
– The stress on hiring functional specialists at Uni Food 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.
Opportunities Uni-President: Crisis Management Strategy | 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 Uni-President: Crisis Management Strategy are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Uni Food can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Uni Food has opened avenues for new revenue streams for the organization in the industry. This can help Uni Food to build a more holistic ecosystem as suggested in the Uni-President: Crisis Management Strategy case study. Uni Food can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Uni Food 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.
Manufacturing automation
– Uni Food can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Uni Food can use these opportunities to build new business models that can help the communities that Uni Food operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Learning at scale
– Online learning technologies has now opened space for Uni Food 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.
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. Uni Food can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Uni Food 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.
Buying journey improvements
– Uni Food can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Uni-President: Crisis Management Strategy 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Uni Food 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Uni Food 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 Uni Food to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Uni Food is facing challenges because of the dominance of functional experts in the organization. Uni-President: Crisis Management Strategy 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.
Using analytics as competitive advantage
– Uni Food 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 Uni-President: Crisis Management Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Uni Food to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Uni-President: Crisis Management Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uni-President: Crisis Management Strategy are -
High dependence on third party suppliers
– Uni Food 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 Uni Food.
Stagnating economy with rate increase
– Uni Food 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Uni-President: Crisis Management Strategy, Uni Food may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Uni Food 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. Uni Food needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
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. Uni Food 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.
Environmental challenges
– Uni Food 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. Uni Food can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology acceleration in Forth Industrial Revolution
– Uni Food has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Uni Food 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.
Consumer confidence and its impact on Uni Food 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.
Increasing wage structure of Uni Food
– 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 Uni Food.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Uni Food can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Uni-President: Crisis Management Strategy 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 Uni-President: Crisis Management Strategy 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 Uni-President: Crisis Management Strategy 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 Uni-President: Crisis Management Strategy 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 Uni-President: Crisis Management Strategy 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 Uni Food needs to make to build a sustainable competitive advantage.