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 - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, increasing commodity prices, 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 -
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Cafe Cupcake 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.
Training and development
– Cafe Cupcake has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Recipe for Success: Growth and Evolution at Cafe Cupcake 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Cafe Cupcake in the sector have low bargaining power. Recipe for Success: Growth and Evolution at Cafe Cupcake has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cafe Cupcake to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Effective Research and Development (R&D)
– Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study Recipe for Success: Growth and Evolution at Cafe Cupcake 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 Cafe Cupcake 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Anthony J. Mayo, Heather Beckham suggests that, Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake, it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Cafe Cupcake 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. Cafe Cupcake 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.
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 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 Cafe Cupcake supply chain. Even after few cautionary changes mentioned in the HBR case study - Recipe for Success: Growth and Evolution at Cafe Cupcake, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cafe Cupcake vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Cafe Cupcake 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 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 -
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.
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.
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.
Using analytics as competitive advantage
– Cafe Cupcake 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 Recipe for Success: Growth and Evolution at Cafe Cupcake - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cafe Cupcake to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cafe Cupcake in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cafe Cupcake 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 Cafe Cupcake to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Cafe Cupcake 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. Cafe Cupcake can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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 -
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.
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.
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.
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 .
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.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cafe Cupcake can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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. Cafe Cupcake 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.
Regulatory challenges
– Cafe Cupcake needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
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.
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.
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.