Case Study Description of Intercontinental Breweries (Abridged)
A senior executive of a U.S. multinational is attempting to develop a set of financial, operating, and ownership arrangements that will be acceptable to the management and employees of a major Polish company and to the Ministry of Privatization. The arrangements must also be consistent with the financial and strategic objectives of the U.S. multinational. A rewritten version of two earlier cases.
Swot Analysis of "Intercontinental Breweries (Abridged)" written by Thomas R. Piper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Arrangements Intercontinental facing as an external strategic factors. Some of the topics covered in Intercontinental Breweries (Abridged) case study are - Strategic Management Strategies, Financial analysis, International business, Joint ventures, Negotiations and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Intercontinental Breweries (Abridged) casestudy better are - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is backlash against globalization, cloud computing is disrupting traditional business models, geopolitical disruptions,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Intercontinental Breweries (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Intercontinental Breweries (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Arrangements Intercontinental, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Arrangements Intercontinental 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 Intercontinental Breweries (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Intercontinental Breweries (Abridged) case study
2. Improving business portfolio management of Arrangements Intercontinental
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Arrangements Intercontinental
Strengths Intercontinental Breweries (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Arrangements Intercontinental in Intercontinental Breweries (Abridged) Harvard Business Review case study are -
Organizational Resilience of Arrangements Intercontinental
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Arrangements Intercontinental does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Arrangements Intercontinental 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 Intercontinental Breweries (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Finance & Accounting field
– Arrangements Intercontinental 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 Arrangements Intercontinental in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Arrangements Intercontinental 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.
Superior customer experience
– The customer experience strategy of Arrangements Intercontinental in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Arrangements Intercontinental has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Arrangements Intercontinental to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Arrangements Intercontinental is one of the leading recruiters in the industry. Managers in the Intercontinental Breweries (Abridged) 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 Intercontinental Breweries (Abridged) 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)
– Arrangements Intercontinental 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 Intercontinental Breweries (Abridged) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Arrangements Intercontinental 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 Arrangements Intercontinental is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Intercontinental Breweries (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Arrangements Intercontinental 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.
Training and development
– Arrangements Intercontinental has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Intercontinental Breweries (Abridged) 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.
Weaknesses Intercontinental Breweries (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Intercontinental Breweries (Abridged) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Intercontinental Breweries (Abridged) 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 Arrangements Intercontinental has relatively successful track record of launching new products.
Lack of clear differentiation of Arrangements Intercontinental products
– To increase the profitability and margins on the products, Arrangements Intercontinental needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Intercontinental Breweries (Abridged), in the dynamic environment Arrangements Intercontinental has struggled to respond to the nimble upstart competition. Arrangements Intercontinental has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Intercontinental Breweries (Abridged) HBR case study mentions - Arrangements Intercontinental 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.
Slow decision making process
– As mentioned earlier in the report, Arrangements Intercontinental 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. Arrangements Intercontinental 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.
Increasing silos among functional specialists
– The organizational structure of Arrangements Intercontinental is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Arrangements Intercontinental needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Arrangements Intercontinental to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Arrangements Intercontinental has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study Intercontinental Breweries (Abridged) 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 Intercontinental Breweries (Abridged) can leverage the sales team experience to cultivate customer relationships as Arrangements Intercontinental is planning to shift buying processes online.
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 Arrangements Intercontinental supply chain. Even after few cautionary changes mentioned in the HBR case study - Intercontinental Breweries (Abridged), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Arrangements Intercontinental vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Arrangements Intercontinental has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Intercontinental Breweries (Abridged) should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Intercontinental Breweries (Abridged), it seems that the employees of Arrangements Intercontinental 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.
Opportunities Intercontinental Breweries (Abridged) | 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 Intercontinental Breweries (Abridged) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Arrangements Intercontinental 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, Intercontinental Breweries (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Arrangements Intercontinental 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.
Using analytics as competitive advantage
– Arrangements Intercontinental 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 Intercontinental Breweries (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Arrangements Intercontinental 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 Arrangements Intercontinental can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Arrangements Intercontinental has opened avenues for new revenue streams for the organization in the industry. This can help Arrangements Intercontinental to build a more holistic ecosystem as suggested in the Intercontinental Breweries (Abridged) case study. Arrangements Intercontinental can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Arrangements Intercontinental can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Arrangements Intercontinental can develop new processes and procedures in Finance & Accounting 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.
Buying journey improvements
– Arrangements Intercontinental can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Intercontinental Breweries (Abridged) 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.
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 Arrangements Intercontinental in the consumer business. Now Arrangements Intercontinental can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Arrangements Intercontinental 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Arrangements Intercontinental can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Arrangements Intercontinental 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Arrangements Intercontinental 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 Arrangements Intercontinental to hire the very best people irrespective of their geographical location.
Threats Intercontinental Breweries (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Intercontinental Breweries (Abridged) 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 Arrangements Intercontinental business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Arrangements Intercontinental 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.
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. Arrangements Intercontinental needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Arrangements Intercontinental
– 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 Arrangements Intercontinental.
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. Arrangements Intercontinental 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Arrangements Intercontinental 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, Arrangements Intercontinental 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 Intercontinental Breweries (Abridged) .
Technology acceleration in Forth Industrial Revolution
– Arrangements Intercontinental has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Arrangements Intercontinental needs to keep up with the evolution of technology in the Finance & Accounting 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.
Shortening product life cycle
– it is one of the major threat that Arrangements Intercontinental is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Arrangements Intercontinental needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Arrangements Intercontinental can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Arrangements Intercontinental can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Arrangements Intercontinental 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.
Weighted SWOT Analysis of Intercontinental Breweries (Abridged) 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 Intercontinental Breweries (Abridged) 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 Intercontinental Breweries (Abridged) 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 Intercontinental Breweries (Abridged) 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 Intercontinental Breweries (Abridged) 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 Arrangements Intercontinental needs to make to build a sustainable competitive advantage.
