Paradise Bakery & Cafe: The Challenges of Success SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Paradise Bakery & Cafe: The Challenges of Success
Paradise Bakery and Cafe: The Challenges of Success traces the journey of entrepreneur Daniel Patterson from the founding of his bakery in Southern California, through the challenges of growth, to an eventual sale, and a post-acquisition crisis. The case focuses on three key decision points for Patterson. The first centers on his decision to hire an experienced outside chief financial officer with strategic vision, succeeding the longtime and well-liked accountant the company has used for years. Patterson must figure out how to communicate this decision to his senior leadership team, addressing their concerns about her compensation and whether she will fit into the company. The second challenge focuses on how Patterson should break the news to employees (and the rest of the world) that the founders have decided to sell the company to Panera Bread, a bigger competitor with whom Patterson had stoked a vibrant rivalry. Finally, once the deal with Panera is concluded, Patterson is faced with a decision of how to steer the business just as the 2008 financial crisis is snowballing, given that he promised Panera that Paradise would open 35 new stores in two years.
Swot Analysis of "Paradise Bakery & Cafe: The Challenges of Success" written by Joel Peterson, Mark W. George includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Patterson Panera facing as an external strategic factors. Some of the topics covered in Paradise Bakery & Cafe: The Challenges of Success case study are - Strategic Management Strategies, Employee retention, Growth strategy, Hiring, Mergers & acquisitions, Recession, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Paradise Bakery & Cafe: The Challenges of Success casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, increasing energy prices, etc
Introduction to SWOT Analysis of Paradise Bakery & Cafe: The Challenges of Success
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paradise Bakery & Cafe: The Challenges of Success case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Patterson Panera, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success can be done for the following purposes –
1. Strategic planning using facts provided in Paradise Bakery & Cafe: The Challenges of Success case study
2. Improving business portfolio management of Patterson Panera
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Patterson Panera
Strengths Paradise Bakery & Cafe: The Challenges of Success | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Patterson Panera in Paradise Bakery & Cafe: The Challenges of Success Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Patterson Panera 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 Patterson Panera 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 Strategy & Execution industry
– Paradise Bakery & Cafe: The Challenges of Success firm has clearly differentiated products in the market place. This has enabled Patterson Panera to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Patterson Panera to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Patterson Panera is one of the leading recruiters in the industry. Managers in the Paradise Bakery & Cafe: The Challenges of Success are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Patterson Panera 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
– Patterson Panera 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 Joel Peterson, Mark W. George 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.
Highly skilled collaborators
– Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Patterson Panera in the sector have low bargaining power. Paradise Bakery & Cafe: The Challenges of Success has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Patterson Panera to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Patterson Panera digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Patterson Panera 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.
Cross disciplinary teams
– Horizontal connected teams at the Patterson Panera 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
– Patterson Panera has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Paradise Bakery & Cafe: The Challenges of Success 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 Patterson Panera 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.
Learning organization
- Patterson Panera 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 Patterson Panera is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Paradise Bakery & Cafe: The Challenges of Success Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Paradise Bakery & Cafe: The Challenges of Success | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paradise Bakery & Cafe: The Challenges of Success are -
Workers concerns about automation
– As automation is fast increasing in the segment, Patterson Panera 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Paradise Bakery & Cafe: The Challenges of Success, in the dynamic environment Patterson Panera has struggled to respond to the nimble upstart competition. Patterson Panera has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Paradise Bakery & Cafe: The Challenges of Success, is just above the industry average. Patterson Panera needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Patterson Panera 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. Patterson Panera 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paradise Bakery & Cafe: The Challenges of Success, it seems that the employees of Patterson Panera don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Patterson Panera, firm in the HBR case study Paradise Bakery & Cafe: The Challenges of Success needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Patterson Panera products
– To increase the profitability and margins on the products, Patterson Panera needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Patterson Panera supply chain. Even after few cautionary changes mentioned in the HBR case study - Paradise Bakery & Cafe: The Challenges of Success, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Patterson Panera vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Paradise Bakery & Cafe: The Challenges of Success HBR case study mentions - Patterson Panera takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Paradise Bakery & Cafe: The Challenges of Success 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 Patterson Panera has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success | 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 Paradise Bakery & Cafe: The Challenges of Success are -
Creating value in data economy
– The success of analytics program of Patterson Panera has opened avenues for new revenue streams for the organization in the industry. This can help Patterson Panera to build a more holistic ecosystem as suggested in the Paradise Bakery & Cafe: The Challenges of Success case study. Patterson Panera can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Patterson Panera can develop new processes and procedures in Strategy & Execution 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.
Manufacturing automation
– Patterson Panera can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Patterson Panera can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Patterson Panera 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. Patterson Panera 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Patterson Panera 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 Patterson Panera to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Patterson Panera can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Patterson Panera 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, Paradise Bakery & Cafe: The Challenges of Success, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Patterson Panera 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.
Learning at scale
– Online learning technologies has now opened space for Patterson Panera 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.
Using analytics as competitive advantage
– Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Patterson Panera to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Patterson Panera can use these opportunities to build new business models that can help the communities that Patterson Panera operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Patterson Panera 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 Paradise Bakery & Cafe: The Challenges of Success External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Paradise Bakery & Cafe: The Challenges of Success are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Patterson Panera in the Strategy & Execution industry. The Strategy & Execution 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.
Regulatory challenges
– Patterson Panera 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 Strategy & Execution industry regulations.
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. Patterson Panera 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.
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.
Consumer confidence and its impact on Patterson Panera 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.
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.
Technology acceleration in Forth Industrial Revolution
– Patterson Panera has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Patterson Panera needs to keep up with the evolution of technology in the Strategy & Execution 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 Patterson Panera in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Patterson Panera 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.
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 Patterson Panera business can come under increasing regulations regarding data privacy, data security, etc.
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 Patterson Panera.
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. Patterson Panera needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Patterson Panera with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Paradise Bakery & Cafe: The Challenges of Success 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 Patterson Panera needs to make to build a sustainable competitive advantage.
