Case Study Description of Colombina S.A.: Entering the Ice Cream Market
In March 2017, the vice-president of the ice cream division at Colombina S.A. (Colombina), was in her office at the company's headquarters in Cali, Colombia. She was reviewing the growth figures for the company's ice cream business, for which she was accountable. The sales target set for the company in 2010 was US$1 billion by 2020, and the ice cream segment would play a fundamental role in reaching that target. The vice-president remembered what Colombina's chief executive officer had told employees the year before at the last strategic planning meeting: "It is simple; in order to reach the sales target, we must continue to do three things: achieve organic growth of the businesses we already have, open new markets or new businesses, and acquire companies with which we can generate synergies with our ongoing businesses." Despite having invoiced over $40 million in ice cream in 2016, a growth of 1 per cent over 2015, the vice-president was aware of the challenge this strategic guideline meant for her category, which led her to consider options for increasing sales and profits. What market opportunities should the ice cream division exploit? What channels should it grow? Should particular channels be grown more than others? Should the product portfolio be expanded? The authors Enrique Ramirez and Juanita Cajiao Saenz are affiliated with Universidad ICESI.
Swot Analysis of "Colombina S.A.: Entering the Ice Cream Market" written by Enrique Ramirez, Juanita Cajiao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cream Ice facing as an external strategic factors. Some of the topics covered in Colombina S.A.: Entering the Ice Cream Market case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Colombina S.A.: Entering the Ice Cream Market casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, geopolitical disruptions, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Colombina S.A.: Entering the Ice Cream Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Colombina S.A.: Entering the Ice Cream Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cream Ice, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cream Ice 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 Colombina S.A.: Entering the Ice Cream Market can be done for the following purposes –
1. Strategic planning using facts provided in Colombina S.A.: Entering the Ice Cream Market case study
2. Improving business portfolio management of Cream Ice
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 Cream Ice
Strengths Colombina S.A.: Entering the Ice Cream Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cream Ice in Colombina S.A.: Entering the Ice Cream Market Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Cream Ice in the sector have low bargaining power. Colombina S.A.: Entering the Ice Cream Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cream Ice to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Cream Ice in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Cream Ice has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Colombina S.A.: Entering the Ice Cream Market 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.
High switching costs
– The high switching costs that Cream Ice 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Colombina S.A.: Entering the Ice Cream Market firm has clearly differentiated products in the market place. This has enabled Cream Ice to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Cream Ice to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Cream Ice is one of the leading recruiters in the industry. Managers in the Colombina S.A.: Entering the Ice Cream Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Colombina S.A.: Entering the Ice Cream Market 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.
Effective Research and Development (R&D)
– Cream Ice 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 Colombina S.A.: Entering the Ice Cream Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Cream Ice has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cream Ice to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Cream Ice 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.
Strong track record of project management
– Cream Ice 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
– Cream Ice has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cream Ice 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.
Weaknesses Colombina S.A.: Entering the Ice Cream Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colombina S.A.: Entering the Ice Cream Market are -
Low market penetration in new markets
– Outside its home market of Cream Ice, firm in the HBR case study Colombina S.A.: Entering the Ice Cream Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Cream Ice 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.
No frontier risks strategy
– After analyzing the HBR case study Colombina S.A.: Entering the Ice Cream Market, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Colombina S.A.: Entering the Ice Cream Market, in the dynamic environment Cream Ice has struggled to respond to the nimble upstart competition. Cream Ice has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Cream Ice supply chain. Even after few cautionary changes mentioned in the HBR case study - Colombina S.A.: Entering the Ice Cream Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cream Ice vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Cream Ice 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. Cream Ice 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.
Skills based hiring
– The stress on hiring functional specialists at Cream Ice 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Colombina S.A.: Entering the Ice Cream Market 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 Cream Ice has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Colombina S.A.: Entering the Ice Cream Market 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 Colombina S.A.: Entering the Ice Cream Market can leverage the sales team experience to cultivate customer relationships as Cream Ice is planning to shift buying processes online.
Lack of clear differentiation of Cream Ice products
– To increase the profitability and margins on the products, Cream Ice needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cream Ice is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Colombina S.A.: Entering the Ice Cream Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Colombina S.A.: Entering the Ice Cream Market | 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 Colombina S.A.: Entering the Ice Cream Market are -
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. Cream Ice 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. Cream Ice 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cream Ice is facing challenges because of the dominance of functional experts in the organization. Colombina S.A.: Entering the Ice Cream Market 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cream Ice 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.
Manufacturing automation
– Cream Ice 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.
Using analytics as competitive advantage
– Cream Ice 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 Colombina S.A.: Entering the Ice Cream Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cream Ice to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cream Ice can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Cream Ice in the consumer business. Now Cream Ice can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cream Ice 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.
Learning at scale
– Online learning technologies has now opened space for Cream Ice 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.
Creating value in data economy
– The success of analytics program of Cream Ice has opened avenues for new revenue streams for the organization in the industry. This can help Cream Ice to build a more holistic ecosystem as suggested in the Colombina S.A.: Entering the Ice Cream Market case study. Cream Ice can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Cream Ice 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.
Loyalty marketing
– Cream Ice 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.
Better consumer reach
– The expansion of the 5G network will help Cream Ice to increase its market reach. Cream Ice 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.
Threats Colombina S.A.: Entering the Ice Cream Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Colombina S.A.: Entering the Ice Cream Market are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Colombina S.A.: Entering the Ice Cream Market, Cream Ice 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 .
Increasing wage structure of Cream Ice
– 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 Cream Ice.
Consumer confidence and its impact on Cream Ice demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Cream Ice 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.
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. Cream Ice can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Cream Ice is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Cream Ice 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 Sales & Marketing industry regulations.
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 Cream Ice.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cream Ice with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cream Ice 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 Colombina S.A.: Entering the Ice Cream Market .
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 Cream Ice in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Colombina S.A.: Entering the Ice Cream Market 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 Colombina S.A.: Entering the Ice Cream Market 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 Colombina S.A.: Entering the Ice Cream Market 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 Colombina S.A.: Entering the Ice Cream Market 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 Colombina S.A.: Entering the Ice Cream Market 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 Cream Ice needs to make to build a sustainable competitive advantage.
