This case describes the business model and workplace philosophy of NatureSweet, a privately owned, vertically integrated greenhouse grower and marketer of fresh tomatoes with sales across the U.S. and $329 million in 2016 revenues. CEO Bryant Ambelang treated NatureSweet more like a consumer-packaged goods manufacturer than an agricultural producer, with a focus on consistency, branding, margin and price stability, and a frontline-worker-centric production model inspired by the Toyota Production System. Workers-who, because of NatureSweet's year-round greenhouse production model, were employed full time-were empowered with training and productivity incentives, allowing them to earn well above the minimum wage and advance their careers within the company. Indeed, improving the lives of workers was the explicit purpose of NatureSweet's operations. Through its financial incentives, personal and professional development initiatives, and worker-appreciation programs, NatureSweet had cultivated a truly unique, uplifting workplace culture in its Mexico operations. Ambelang aspired to replicate the model in the U.S. as a way of demonstrating the potential to "transform the lives of agricultural workers in North America." But in late 2017, the Arizona-based production operations that NatureSweet had acquired in 2014 were still struggling to attain the successes achieved in Mexico. This case describes NatureSweet's history, achievements in Mexico, and challenges in Arizona, inviting students to evaluate the keys to NatureSweet's success in Mexico and analyze their potential for replication in the U.S. Will Ambelang succeed in Arizona, and in doing so demonstrate that it is possible to transform the lives of agricultural workers in North America?
Authors :: Jose B. Alvarez, Forest Reinhardt, Natalie Kindred
Swot Analysis of "NatureSweet" written by Jose B. Alvarez, Forest Reinhardt, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Naturesweet Naturesweet's facing as an external strategic factors. Some of the topics covered in NatureSweet case study are - Strategic Management Strategies, Business models, Change management, Ethics, Labor, Leadership, Manufacturing, Motivating people, Workspaces and Communication.
Some of the macro environment factors that can be used to understand the NatureSweet casestudy better are - – there is backlash against globalization, wage bills are increasing, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
technology disruption, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NatureSweet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Naturesweet Naturesweet's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Naturesweet Naturesweet's 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 NatureSweet can be done for the following purposes –
1. Strategic planning using facts provided in NatureSweet case study
2. Improving business portfolio management of Naturesweet Naturesweet's
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Naturesweet Naturesweet's
Strengths NatureSweet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Naturesweet Naturesweet's in NatureSweet Harvard Business Review case study are -
Training and development
– Naturesweet Naturesweet's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in NatureSweet 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.
Ability to lead change in Communication field
– Naturesweet Naturesweet's 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 Naturesweet Naturesweet's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Naturesweet Naturesweet's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Naturesweet Naturesweet's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Naturesweet Naturesweet's 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 NatureSweet HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Naturesweet Naturesweet's is present in almost all the verticals within the industry. This has provided firm in NatureSweet 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.
High switching costs
– The high switching costs that Naturesweet Naturesweet's 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.
Superior customer experience
– The customer experience strategy of Naturesweet Naturesweet's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Naturesweet Naturesweet's is one of the leading recruiters in the industry. Managers in the NatureSweet 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 NatureSweet 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.
Learning organization
- Naturesweet Naturesweet's 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 Naturesweet Naturesweet's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NatureSweet Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Naturesweet Naturesweet's 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 NatureSweet - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Naturesweet Naturesweet's in the sector have low bargaining power. NatureSweet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Naturesweet Naturesweet's to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses NatureSweet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NatureSweet are -
Lack of clear differentiation of Naturesweet Naturesweet's products
– To increase the profitability and margins on the products, Naturesweet Naturesweet's needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Naturesweet Naturesweet's is dominated by functional specialists. It is not different from other players in the Communication segment. Naturesweet Naturesweet's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Naturesweet Naturesweet's to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Jose B. Alvarez, Forest Reinhardt, Natalie Kindred suggests that, Naturesweet Naturesweet's 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.
Capital Spending Reduction
– Even during the low interest decade, Naturesweet Naturesweet's 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.
No frontier risks strategy
– After analyzing the HBR case study NatureSweet, it seems that company is thinking about the frontier risks that can impact Communication strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NatureSweet, is just above the industry average. Naturesweet Naturesweet's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study NatureSweet, it seems that the employees of Naturesweet Naturesweet's 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.
Need for greater diversity
– Naturesweet Naturesweet's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study NatureSweet 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 Naturesweet Naturesweet's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study NatureSweet 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 NatureSweet can leverage the sales team experience to cultivate customer relationships as Naturesweet Naturesweet's is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Naturesweet Naturesweet's 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.
Opportunities NatureSweet | 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 NatureSweet are -
Loyalty marketing
– Naturesweet Naturesweet's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Naturesweet Naturesweet's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Naturesweet Naturesweet's can use these opportunities to build new business models that can help the communities that Naturesweet Naturesweet's operates in. Secondly it can use opportunities from government spending in Communication sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Naturesweet Naturesweet's 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, NatureSweet, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Naturesweet Naturesweet's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Naturesweet Naturesweet's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Naturesweet Naturesweet's 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. Naturesweet Naturesweet's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communication industry, but it has also influenced the consumer preferences. Naturesweet Naturesweet's 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
– Naturesweet Naturesweet's can develop new processes and procedures in Communication 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
– Naturesweet Naturesweet's can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Naturesweet Naturesweet's 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 Naturesweet Naturesweet's to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Naturesweet Naturesweet's has opened avenues for new revenue streams for the organization in the industry. This can help Naturesweet Naturesweet's to build a more holistic ecosystem as suggested in the NatureSweet case study. Naturesweet Naturesweet's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Naturesweet Naturesweet's 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.
Threats NatureSweet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NatureSweet are -
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. Naturesweet Naturesweet's needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Naturesweet Naturesweet's in the Communication industry. The Communication 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.
Consumer confidence and its impact on Naturesweet Naturesweet's 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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Naturesweet Naturesweet's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Naturesweet Naturesweet's 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 Communication industry regulations.
Increasing wage structure of Naturesweet Naturesweet's
– 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 Naturesweet Naturesweet's.
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 Naturesweet Naturesweet's in the Communication sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Naturesweet Naturesweet's has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Naturesweet Naturesweet's needs to keep up with the evolution of technology in the Communication 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.
Stagnating economy with rate increase
– Naturesweet Naturesweet's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study NatureSweet, Naturesweet Naturesweet's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
High dependence on third party suppliers
– Naturesweet Naturesweet's 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, Naturesweet Naturesweet's 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 NatureSweet .
Weighted SWOT Analysis of NatureSweet 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 NatureSweet 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 NatureSweet 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 NatureSweet 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 NatureSweet 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 Naturesweet Naturesweet's needs to make to build a sustainable competitive advantage.