Case Study Description of Cafe Xaragua: The Calgary Opportunity
After one year of operations, a young entrepreneur and his two partners must evaluate a decision that will change the scope and direction of their business, an online retail store that sells fair-trade coffee beans imported from a developing country. An opportunity exists to market the product at a farmers' market in a large city. Most of the details have been worked out, but before a final decision can be made, the partners must evaluate the product's financial feasibility for the company's second year of operations. If the financials look favourable, the partners will proceed with the opportunity.
Swot Analysis of "Cafe Xaragua: The Calgary Opportunity" written by Elizabeth M.A. Grasby, Karim Mashnuk includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Partners Xaragua facing as an external strategic factors. Some of the topics covered in Cafe Xaragua: The Calgary Opportunity case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Cafe Xaragua: The Calgary Opportunity casestudy better are - – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, wage bills are increasing, geopolitical disruptions, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Cafe Xaragua: The Calgary Opportunity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cafe Xaragua: The Calgary Opportunity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Partners Xaragua, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Partners Xaragua 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 Cafe Xaragua: The Calgary Opportunity can be done for the following purposes –
1. Strategic planning using facts provided in Cafe Xaragua: The Calgary Opportunity case study
2. Improving business portfolio management of Partners Xaragua
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 Partners Xaragua
Strengths Cafe Xaragua: The Calgary Opportunity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Partners Xaragua in Cafe Xaragua: The Calgary Opportunity Harvard Business Review case study are -
Effective Research and Development (R&D)
– Partners Xaragua 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 Cafe Xaragua: The Calgary Opportunity - 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 Partners Xaragua in the sector have low bargaining power. Cafe Xaragua: The Calgary Opportunity has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Partners Xaragua to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Partners Xaragua 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Partners Xaragua digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Partners Xaragua 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.
Highly skilled collaborators
– Partners Xaragua 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 Cafe Xaragua: The Calgary Opportunity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Partners Xaragua
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Partners Xaragua does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Partners Xaragua 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.
Ability to recruit top talent
– Partners Xaragua is one of the leading recruiters in the industry. Managers in the Cafe Xaragua: The Calgary Opportunity are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Partners Xaragua has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Partners Xaragua to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Partners Xaragua 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 Partners Xaragua is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cafe Xaragua: The Calgary Opportunity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Partners Xaragua is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Partners Xaragua has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cafe Xaragua: The Calgary Opportunity 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 Cafe Xaragua: The Calgary Opportunity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cafe Xaragua: The Calgary Opportunity are -
Increasing silos among functional specialists
– The organizational structure of Partners Xaragua is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Partners Xaragua needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Partners Xaragua to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Partners Xaragua products
– To increase the profitability and margins on the products, Partners Xaragua needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cafe Xaragua: The Calgary Opportunity, is just above the industry average. Partners Xaragua 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.
Products dominated business model
– Even though Partners Xaragua 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 - Cafe Xaragua: The Calgary Opportunity should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Cafe Xaragua: The Calgary Opportunity 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 Partners Xaragua 's lucrative customers.
High cash cycle compare to competitors
Partners Xaragua 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.
Skills based hiring
– The stress on hiring functional specialists at Partners Xaragua has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Cafe Xaragua: The Calgary Opportunity, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Partners Xaragua is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cafe Xaragua: The Calgary Opportunity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Partners Xaragua supply chain. Even after few cautionary changes mentioned in the HBR case study - Cafe Xaragua: The Calgary Opportunity, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Partners Xaragua vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Cafe Xaragua: The Calgary Opportunity 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 Cafe Xaragua: The Calgary Opportunity can leverage the sales team experience to cultivate customer relationships as Partners Xaragua is planning to shift buying processes online.
Opportunities Cafe Xaragua: The Calgary Opportunity | 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 Cafe Xaragua: The Calgary Opportunity are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Partners Xaragua in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Buying journey improvements
– Partners Xaragua can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cafe Xaragua: The Calgary Opportunity 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Partners Xaragua 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, Cafe Xaragua: The Calgary Opportunity, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Partners Xaragua to increase its market reach. Partners Xaragua will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 Partners Xaragua 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.
Manufacturing automation
– Partners Xaragua can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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. Partners Xaragua can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Partners Xaragua can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Partners Xaragua 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 Finance & Accounting segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Partners Xaragua can use these opportunities to build new business models that can help the communities that Partners Xaragua operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Partners Xaragua in the consumer business. Now Partners Xaragua can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Partners Xaragua 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.
Leveraging digital technologies
– Partners Xaragua 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.
Threats Cafe Xaragua: The Calgary Opportunity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cafe Xaragua: The Calgary Opportunity are -
Environmental challenges
– Partners Xaragua 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. Partners Xaragua can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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 Partners Xaragua business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Partners Xaragua 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.
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, Partners Xaragua 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 Cafe Xaragua: The Calgary Opportunity .
Regulatory challenges
– Partners Xaragua 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 Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cafe Xaragua: The Calgary Opportunity, Partners Xaragua may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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. Partners Xaragua needs to understand the core reasons impacting the Finance & Accounting 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 Partners Xaragua with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Partners Xaragua in the Finance & Accounting industry. The Finance & Accounting 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.
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. Partners Xaragua 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.
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 Partners Xaragua in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Cafe Xaragua: The Calgary Opportunity 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 Cafe Xaragua: The Calgary Opportunity 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 Cafe Xaragua: The Calgary Opportunity 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 Cafe Xaragua: The Calgary Opportunity 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 Cafe Xaragua: The Calgary Opportunity 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 Partners Xaragua needs to make to build a sustainable competitive advantage.
