Case Study Description of Brazil's Enigma: Sustaining Long-Term Growth
Over the past decade, Brazil's future as a leading world economic power appeared certain. An expanding middle class and commodity boom had fueled economic growth, with GDP growth hitting a peak of 7.5% in 2010. However, the high cost of conducting business in Brazil, known as "Custo Brasil," was hurting domestic manufacturing, while incoming foreign investments threatened to overwhelm Brazilian markets. Under President Dilma Rousseff, economic growth stagnated, and the Rousseff administration struggled to find the best balance between reducing inflation, maintaining a flexible exchange rate, and improving the competitiveness of Brazilian exports.
Authors :: Laura Alfaro, Hilary White, Haviland Sheldahl-Thomason
Swot Analysis of "Brazil's Enigma: Sustaining Long-Term Growth" written by Laura Alfaro, Hilary White, Haviland Sheldahl-Thomason includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rousseff Brazil's facing as an external strategic factors. Some of the topics covered in Brazil's Enigma: Sustaining Long-Term Growth case study are - Strategic Management Strategies, Change management, Competition, Currency, Global strategy, Product development, Productivity and Global Business.
Some of the macro environment factors that can be used to understand the Brazil's Enigma: Sustaining Long-Term Growth casestudy better are - – increasing commodity prices, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Brazil's Enigma: Sustaining Long-Term Growth
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Brazil's Enigma: Sustaining Long-Term Growth case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rousseff Brazil's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rousseff Brazil'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 Brazil's Enigma: Sustaining Long-Term Growth can be done for the following purposes –
1. Strategic planning using facts provided in Brazil's Enigma: Sustaining Long-Term Growth case study
2. Improving business portfolio management of Rousseff Brazil's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rousseff Brazil's
Strengths Brazil's Enigma: Sustaining Long-Term Growth | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rousseff Brazil's in Brazil's Enigma: Sustaining Long-Term Growth Harvard Business Review case study are -
Diverse revenue streams
– Rousseff Brazil's is present in almost all the verticals within the industry. This has provided firm in Brazil's Enigma: Sustaining Long-Term Growth 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.
Innovation driven organization
– Rousseff Brazil's is one of the most innovative firm in sector. Manager in Brazil's Enigma: Sustaining Long-Term Growth Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Rousseff Brazil's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rousseff Brazil'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 Rousseff Brazil's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rousseff Brazil's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Rousseff Brazil'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 Rousseff Brazil's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Brazil's Enigma: Sustaining Long-Term Growth Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Brazil's Enigma: Sustaining Long-Term Growth firm has clearly differentiated products in the market place. This has enabled Rousseff Brazil's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Rousseff Brazil's to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Rousseff Brazil'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 Brazil's Enigma: Sustaining Long-Term Growth - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Rousseff Brazil'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 Rousseff Brazil's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Rousseff Brazil'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 Laura Alfaro, Hilary White, Haviland Sheldahl-Thomason 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Rousseff Brazil's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rousseff Brazil's 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.
Ability to lead change in Global Business field
– Rousseff Brazil'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 Rousseff Brazil's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Brazil's Enigma: Sustaining Long-Term Growth | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Brazil's Enigma: Sustaining Long-Term Growth are -
Low market penetration in new markets
– Outside its home market of Rousseff Brazil's, firm in the HBR case study Brazil's Enigma: Sustaining Long-Term Growth needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Brazil's Enigma: Sustaining Long-Term Growth, is just above the industry average. Rousseff Brazil'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.
Skills based hiring
– The stress on hiring functional specialists at Rousseff Brazil's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Brazil's Enigma: Sustaining Long-Term Growth, it seems that the employees of Rousseff Brazil'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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rousseff Brazil's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Brazil's Enigma: Sustaining Long-Term Growth can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Rousseff Brazil's is dominated by functional specialists. It is not different from other players in the Global Business segment. Rousseff Brazil's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rousseff Brazil's to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Rousseff Brazil'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.
Workers concerns about automation
– As automation is fast increasing in the segment, Rousseff Brazil'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.
Interest costs
– Compare to the competition, Rousseff Brazil'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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Brazil's Enigma: Sustaining Long-Term Growth, in the dynamic environment Rousseff Brazil's has struggled to respond to the nimble upstart competition. Rousseff Brazil's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Brazil's Enigma: Sustaining Long-Term Growth 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 Brazil's Enigma: Sustaining Long-Term Growth can leverage the sales team experience to cultivate customer relationships as Rousseff Brazil's is planning to shift buying processes online.
Opportunities Brazil's Enigma: Sustaining Long-Term Growth | 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 Brazil's Enigma: Sustaining Long-Term Growth are -
Buying journey improvements
– Rousseff Brazil's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Brazil's Enigma: Sustaining Long-Term Growth 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.
Developing new processes and practices
– Rousseff Brazil's can develop new processes and procedures in Global Business 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.
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 Rousseff Brazil's in the consumer business. Now Rousseff Brazil's can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Rousseff Brazil's has opened avenues for new revenue streams for the organization in the industry. This can help Rousseff Brazil's to build a more holistic ecosystem as suggested in the Brazil's Enigma: Sustaining Long-Term Growth case study. Rousseff Brazil's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Rousseff Brazil'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.
Better consumer reach
– The expansion of the 5G network will help Rousseff Brazil's to increase its market reach. Rousseff Brazil's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rousseff Brazil'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, Brazil's Enigma: Sustaining Long-Term Growth, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Rousseff Brazil's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rousseff Brazil'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. Rousseff Brazil'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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rousseff Brazil's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rousseff Brazil's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Rousseff Brazil'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.
Using analytics as competitive advantage
– Rousseff Brazil'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 Brazil's Enigma: Sustaining Long-Term Growth - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rousseff Brazil's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Brazil's Enigma: Sustaining Long-Term Growth External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Brazil's Enigma: Sustaining Long-Term Growth are -
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 Rousseff Brazil's in the Global Business sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Rousseff Brazil's.
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 Rousseff Brazil's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Rousseff Brazil'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.
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. Rousseff Brazil'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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rousseff Brazil'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 Brazil's Enigma: Sustaining Long-Term Growth .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rousseff Brazil's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Rousseff Brazil's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Rousseff Brazil's needs to keep up with the evolution of technology in the Global Business 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.
Environmental challenges
– Rousseff Brazil's 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. Rousseff Brazil's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Rousseff Brazil's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Rousseff Brazil'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 Rousseff Brazil's.
Regulatory challenges
– Rousseff Brazil'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 Global Business industry regulations.
Shortening product life cycle
– it is one of the major threat that Rousseff Brazil's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Brazil's Enigma: Sustaining Long-Term Growth 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 Brazil's Enigma: Sustaining Long-Term Growth 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 Brazil's Enigma: Sustaining Long-Term Growth 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 Brazil's Enigma: Sustaining Long-Term Growth 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 Brazil's Enigma: Sustaining Long-Term Growth 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 Rousseff Brazil's needs to make to build a sustainable competitive advantage.