Recipe for Success: Growth and Evolution at Cafe Cupcake SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Recipe for Success: Growth and Evolution at Cafe Cupcake
Cafe Cupcake (CC) is a fast-casual restaurant chain that offers artisan cupcakes and light fare throughout the southeastern United States and Texas. This case chronicles the growth and evolution of Cafe Cupcake. It also considers the specific human resource challenges the company's leaders face at the end of the case as they attempt to scale CC's business concept. By 2018, Cafe Cupcake had achieved several significant milestones. It operated 35 cafes with almost 700 employees. Its unique restaurant concept and distinctive cupcakes fueled rapid growth, which led to a more complex, vertically-integrated organization. The original founding team of Emma Bisset and Aneisha Davis recently added Dr. Jonathan Patel, an expert in organizational behavior and human-resource management, who turned down a partnership offer at a leading consulting firm to become Cafe Cupcake's chief operating officer. The case looks at the organization from the partners' point of view. Anticipating continued rapid growth, the partners question how Cafe Cupcake should respond to strategic, human resource, and organizational challenges that lie ahead. What will best position the company for future success? What organizational practices should the partners sustain, drop, or add to enable this success? The Cafe Cupcake case highlights the organizational challenges that companies face as they grow and evolve. It can be used in an introductory undergraduate or MBA course to illustrate how to manage organizational change and scale new ventures. It is also appropriate for advanced electives in Organizational Behavior, Leading Change, Strategic Human Resource Management, and Entrepreneurial Management or in an Executive MBA program.
Swot Analysis of "Recipe for Success: Growth and Evolution at Cafe Cupcake" written by Anthony J. Mayo, Heather Beckham includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cafe Cupcake facing as an external strategic factors. Some of the topics covered in Recipe for Success: Growth and Evolution at Cafe Cupcake case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Human resource management, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the Recipe for Success: Growth and Evolution at Cafe Cupcake casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing energy prices,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
Introduction to SWOT Analysis of Recipe for Success: Growth and Evolution at Cafe Cupcake
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Recipe for Success: Growth and Evolution at Cafe Cupcake case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cafe Cupcake, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake can be done for the following purposes –
1. Strategic planning using facts provided in Recipe for Success: Growth and Evolution at Cafe Cupcake case study
2. Improving business portfolio management of Cafe Cupcake
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cafe Cupcake
Strengths Recipe for Success: Growth and Evolution at Cafe Cupcake | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cafe Cupcake in Recipe for Success: Growth and Evolution at Cafe Cupcake Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Recipe for Success: Growth and Evolution at Cafe Cupcake 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.
Successful track record of launching new products
– Cafe Cupcake has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cafe Cupcake 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.
Organizational Resilience of Cafe Cupcake
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cafe Cupcake does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Cafe Cupcake has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cafe Cupcake to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Cafe Cupcake is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Cafe Cupcake 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 Anthony J. Mayo, Heather Beckham 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.
High switching costs
– The high switching costs that Cafe Cupcake 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.
Ability to lead change in Organizational Development field
– Cafe Cupcake 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 Cafe Cupcake in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Cafe Cupcake is present in almost all the verticals within the industry. This has provided firm in Recipe for Success: Growth and Evolution at Cafe Cupcake 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.
Superior customer experience
– The customer experience strategy of Cafe Cupcake in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Cafe Cupcake digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cafe Cupcake 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.
Weaknesses Recipe for Success: Growth and Evolution at Cafe Cupcake | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Recipe for Success: Growth and Evolution at Cafe Cupcake are -
Skills based hiring
– The stress on hiring functional specialists at Cafe Cupcake 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.
Products dominated business model
– Even though Cafe Cupcake 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 - Recipe for Success: Growth and Evolution at Cafe Cupcake should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Cafe Cupcake 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.
Aligning sales with marketing
– It come across in the case study Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake can leverage the sales team experience to cultivate customer relationships as Cafe Cupcake is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Cafe Cupcake 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.
Low market penetration in new markets
– Outside its home market of Cafe Cupcake, firm in the HBR case study Recipe for Success: Growth and Evolution at Cafe Cupcake needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Cafe Cupcake 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cafe Cupcake is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Recipe for Success: Growth and Evolution at Cafe Cupcake can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Cafe Cupcake has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Recipe for Success: Growth and Evolution at Cafe Cupcake, in the dynamic environment Cafe Cupcake has struggled to respond to the nimble upstart competition. Cafe Cupcake has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Cafe Cupcake is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Cafe Cupcake needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cafe Cupcake to focus more on services rather than just following the product oriented approach.
Opportunities Recipe for Success: Growth and Evolution at Cafe Cupcake | 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 Recipe for Success: Growth and Evolution at Cafe Cupcake are -
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 Cafe Cupcake 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cafe Cupcake can use these opportunities to build new business models that can help the communities that Cafe Cupcake operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Creating value in data economy
– The success of analytics program of Cafe Cupcake has opened avenues for new revenue streams for the organization in the industry. This can help Cafe Cupcake to build a more holistic ecosystem as suggested in the Recipe for Success: Growth and Evolution at Cafe Cupcake case study. Cafe Cupcake can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cafe Cupcake can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Cafe Cupcake can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Cafe Cupcake can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing 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 Cafe Cupcake in the consumer business. Now Cafe Cupcake can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cafe Cupcake 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cafe Cupcake 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. Cafe Cupcake can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Cafe Cupcake to increase its market reach. Cafe Cupcake 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.
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. Cafe Cupcake can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Cafe Cupcake can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Loyalty marketing
– Cafe Cupcake 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.
Threats Recipe for Success: Growth and Evolution at Cafe Cupcake External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Recipe for Success: Growth and Evolution at Cafe Cupcake are -
High dependence on third party suppliers
– Cafe Cupcake 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cafe Cupcake in the Organizational Development industry. The Organizational Development 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.
Increasing wage structure of Cafe Cupcake
– 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 Cafe Cupcake.
Shortening product life cycle
– it is one of the major threat that Cafe Cupcake is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Cafe Cupcake 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. Cafe Cupcake can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Stagnating economy with rate increase
– Cafe Cupcake 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.
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 Cafe Cupcake.
Consumer confidence and its impact on Cafe Cupcake 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.
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. Cafe Cupcake needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Recipe for Success: Growth and Evolution at Cafe Cupcake, Cafe Cupcake may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake .
Technology acceleration in Forth Industrial Revolution
– Cafe Cupcake has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Cafe Cupcake needs to keep up with the evolution of technology in the Organizational Development 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.
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 Cafe Cupcake in the Organizational Development sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Cafe Cupcake needs to make to build a sustainable competitive advantage.
