Case Study Description of Kookie Kutter Bakery: Crunch Time
In January 2017, the owner of Kookie Kutter Bakery in Sackville, New Brunswick, Canada, needed to make some challenging decisions about the future of his bakery. He enlisted a small marketing firm to help him determine the marketing options available to him, including introducing new cookie flavours, and reaching out to new markets. Because of the bakery's precarious financial situation, the owner needed to decide how to move forward to ensure that his bakery would succeed in the long run. What should the bakery owner do to keep Kookie Kutter Bakery alive? Ailsa McBride is affiliated with Mount Allison University.
Swot Analysis of "Kookie Kutter Bakery: Crunch Time" written by Ailsa McBride includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bakery Kookie facing as an external strategic factors. Some of the topics covered in Kookie Kutter Bakery: Crunch Time case study are - Strategic Management Strategies, Manufacturing, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Kookie Kutter Bakery: Crunch Time casestudy better are - – increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Kookie Kutter Bakery: Crunch Time
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kookie Kutter Bakery: Crunch Time case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bakery Kookie, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bakery Kookie 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 Kookie Kutter Bakery: Crunch Time can be done for the following purposes –
1. Strategic planning using facts provided in Kookie Kutter Bakery: Crunch Time case study
2. Improving business portfolio management of Bakery Kookie
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 Bakery Kookie
Strengths Kookie Kutter Bakery: Crunch Time | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bakery Kookie in Kookie Kutter Bakery: Crunch Time Harvard Business Review case study are -
Diverse revenue streams
– Bakery Kookie is present in almost all the verticals within the industry. This has provided firm in Kookie Kutter Bakery: Crunch Time 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 lead change in Sales & Marketing field
– Bakery Kookie 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 Bakery Kookie in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Sales & Marketing industry
– Kookie Kutter Bakery: Crunch Time firm has clearly differentiated products in the market place. This has enabled Bakery Kookie to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Bakery Kookie to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Bakery Kookie 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.
Successful track record of launching new products
– Bakery Kookie has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bakery Kookie 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.
Learning organization
- Bakery Kookie 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 Bakery Kookie is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kookie Kutter Bakery: Crunch Time Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Bakery Kookie digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bakery Kookie 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.
Effective Research and Development (R&D)
– Bakery Kookie 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 Kookie Kutter Bakery: Crunch Time - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Bakery Kookie are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Bakery Kookie 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 Kookie Kutter Bakery: Crunch Time HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Bakery Kookie has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kookie Kutter Bakery: Crunch Time 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.
Analytics focus
– Bakery Kookie 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 Ailsa McBride 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.
Weaknesses Kookie Kutter Bakery: Crunch Time | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kookie Kutter Bakery: Crunch Time are -
Aligning sales with marketing
– It come across in the case study Kookie Kutter Bakery: Crunch Time 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 Kookie Kutter Bakery: Crunch Time can leverage the sales team experience to cultivate customer relationships as Bakery Kookie is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Kookie Kutter Bakery: Crunch Time 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 Bakery Kookie 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kookie Kutter Bakery: Crunch Time, in the dynamic environment Bakery Kookie has struggled to respond to the nimble upstart competition. Bakery Kookie has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Bakery Kookie 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.
Interest costs
– Compare to the competition, Bakery Kookie 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ailsa McBride suggests that, Bakery Kookie 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.
No frontier risks strategy
– After analyzing the HBR case study Kookie Kutter Bakery: Crunch Time, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kookie Kutter Bakery: Crunch Time, is just above the industry average. Bakery Kookie 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.
Lack of clear differentiation of Bakery Kookie products
– To increase the profitability and margins on the products, Bakery Kookie needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kookie Kutter Bakery: Crunch Time 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 Bakery Kookie has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Bakery Kookie 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.
Opportunities Kookie Kutter Bakery: Crunch Time | 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 Kookie Kutter Bakery: Crunch Time are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bakery Kookie 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, Kookie Kutter Bakery: Crunch Time, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Bakery Kookie 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.
Building a culture of innovation
– managers at Bakery Kookie 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.
Leveraging digital technologies
– Bakery Kookie 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.
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. Bakery Kookie 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. Bakery Kookie 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bakery Kookie 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.
Using analytics as competitive advantage
– Bakery Kookie 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 Kookie Kutter Bakery: Crunch Time - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bakery Kookie to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Bakery Kookie to increase its market reach. Bakery Kookie will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bakery Kookie is facing challenges because of the dominance of functional experts in the organization. Kookie Kutter Bakery: Crunch Time 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 Bakery Kookie can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Bakery Kookie can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kookie Kutter Bakery: Crunch Time 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.
Creating value in data economy
– The success of analytics program of Bakery Kookie has opened avenues for new revenue streams for the organization in the industry. This can help Bakery Kookie to build a more holistic ecosystem as suggested in the Kookie Kutter Bakery: Crunch Time case study. Bakery Kookie can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Bakery Kookie in the consumer business. Now Bakery Kookie can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Kookie Kutter Bakery: Crunch Time External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kookie Kutter Bakery: Crunch Time are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bakery Kookie with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Bakery Kookie can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Bakery Kookie 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.
Consumer confidence and its impact on Bakery Kookie 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 Bakery Kookie
– 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 Bakery Kookie.
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 Bakery Kookie in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bakery Kookie 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 Kookie Kutter Bakery: Crunch Time .
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. Bakery Kookie needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Bakery Kookie business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Bakery Kookie is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Bakery Kookie 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. Bakery Kookie 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.
Stagnating economy with rate increase
– Bakery Kookie 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.
Weighted SWOT Analysis of Kookie Kutter Bakery: Crunch Time 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 Kookie Kutter Bakery: Crunch Time 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 Kookie Kutter Bakery: Crunch Time 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 Kookie Kutter Bakery: Crunch Time 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 Kookie Kutter Bakery: Crunch Time 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 Bakery Kookie needs to make to build a sustainable competitive advantage.