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 - – cloud computing is disrupting traditional business models, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Naturesweet Naturesweet's 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.
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.
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.
Innovation driven organization
– Naturesweet Naturesweet's is one of the most innovative firm in sector. Manager in NatureSweet Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
High brand equity
– Naturesweet Naturesweet's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Naturesweet Naturesweet's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Communication industry
– NatureSweet firm has clearly differentiated products in the market place. This has enabled Naturesweet Naturesweet's to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Naturesweet Naturesweet's to invest into research and development (R&D) and innovation.
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.
Successful track record of launching new products
– Naturesweet Naturesweet's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Naturesweet Naturesweet's 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 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.
Analytics focus
– Naturesweet Naturesweet's 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 Jose B. Alvarez, Forest Reinhardt, Natalie Kindred 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.
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.
Weaknesses NatureSweet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NatureSweet are -
Slow decision making process
– As mentioned earlier in the report, Naturesweet Naturesweet's 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. Naturesweet Naturesweet's 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.
Low market penetration in new markets
– Outside its home market of Naturesweet Naturesweet's, firm in the HBR case study NatureSweet needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Naturesweet Naturesweet's supply chain. Even after few cautionary changes mentioned in the HBR case study - NatureSweet, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Naturesweet Naturesweet's vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the NatureSweet 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 Naturesweet Naturesweet's has relatively successful track record of launching new products.
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.
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.
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.
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.
Interest costs
– Compare to the competition, Naturesweet Naturesweet's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Naturesweet Naturesweet's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study NatureSweet can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study NatureSweet, in the dynamic environment Naturesweet Naturesweet's has struggled to respond to the nimble upstart competition. Naturesweet Naturesweet's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
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.
Buying journey improvements
– Naturesweet Naturesweet's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NatureSweet suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Naturesweet Naturesweet's 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 NatureSweet - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Naturesweet Naturesweet's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Naturesweet Naturesweet's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Naturesweet Naturesweet's 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.
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.
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.
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.
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.
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.
Building a culture of innovation
– managers at Naturesweet Naturesweet's 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 Communication segment.
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 Naturesweet Naturesweet's in the consumer business. Now Naturesweet Naturesweet's can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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 -
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 Naturesweet Naturesweet's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Naturesweet Naturesweet's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Naturesweet Naturesweet's 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.
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 .
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.
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.
