Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001
The case entitled 'Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001' examines the competitive environment of the US wine industry in 2001, prior to [yellow tail]'s launch. The case demonstrates how the industry was overcrowded, highly competitive, and increasingly squeezed at the distribution and retail stages of the supply chain. Even though the industry was intensely competitive, wine manufacturers have systematically competed along the same set of factors that have hardly changed over the last few centuries. In July 2001, Australia's Casella Winery introduced [yellow tail] into this highly competitive US market. Small and unknown, they had expected to sell 25,000 cases in their first year. In fact, they had sold nine times that amount. By the end of 2005, [yellow tail]'s cumulative sales were tracking at 25 million cases. [yellow tail] soon emerged as the overall best selling 750ml red wine, outstripping Californian, French and Italian brands. This case examines the strategic move executed by [yellow tail] that made it the number one imported wine and the fastest growing brand in the history of the US and Australian wine industries.
Authors :: W. Chan Kim, Renee Mauborgne, Jason Hunter, Brian Marks
Swot Analysis of "Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001" written by W. Chan Kim, Renee Mauborgne, Jason Hunter, Brian Marks includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wine Yellow facing as an external strategic factors. Some of the topics covered in Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 case study are - Strategic Management Strategies, Innovation and Global Business.
Some of the macro environment factors that can be used to understand the Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, geopolitical disruptions, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
supply chains are disrupted by pandemic , wage bills are increasing, etc
Introduction to SWOT Analysis of Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wine Yellow, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wine Yellow 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 can be done for the following purposes –
1. Strategic planning using facts provided in Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 case study
2. Improving business portfolio management of Wine Yellow
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 Wine Yellow
Strengths Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wine Yellow in Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 Harvard Business Review case study are -
Ability to recruit top talent
– Wine Yellow is one of the leading recruiters in the industry. Managers in the Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Wine Yellow 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.
Analytics focus
– Wine Yellow 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 W. Chan Kim, Renee Mauborgne, Jason Hunter, Brian Marks 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.
Sustainable margins compare to other players in Global Business industry
– Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 firm has clearly differentiated products in the market place. This has enabled Wine Yellow to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Wine Yellow to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Wine Yellow is present in almost all the verticals within the industry. This has provided firm in Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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.
Highly skilled collaborators
– Wine Yellow 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Wine Yellow is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Wine Yellow 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 Wine Yellow is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Wine Yellow in the sector have low bargaining power. Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wine Yellow to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Wine Yellow
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wine Yellow does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Wine Yellow has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wine Yellow to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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.
Weaknesses Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wine Yellow is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Wine Yellow has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Wine Yellow 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 - Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 HBR case study mentions - Wine Yellow 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.
High bargaining power of channel partners
– Because of the regulatory requirements, W. Chan Kim, Renee Mauborgne, Jason Hunter, Brian Marks suggests that, Wine Yellow is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Wine Yellow, firm in the HBR case study Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Wine Yellow has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Wine Yellow 's lucrative customers.
Need for greater diversity
– Wine Yellow 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, Wine Yellow 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001, it seems that the employees of Wine Yellow 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 | 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wine Yellow can use these opportunities to build new business models that can help the communities that Wine Yellow operates in. Secondly it can use opportunities from government spending in Global Business sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wine Yellow 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.
Building a culture of innovation
– managers at Wine Yellow 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 Global Business segment.
Creating value in data economy
– The success of analytics program of Wine Yellow has opened avenues for new revenue streams for the organization in the industry. This can help Wine Yellow to build a more holistic ecosystem as suggested in the Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 case study. Wine Yellow can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Wine Yellow to increase its market reach. Wine Yellow 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 Wine Yellow 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wine Yellow 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, Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Wine Yellow in the consumer business. Now Wine Yellow can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Wine Yellow 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.
Learning at scale
– Online learning technologies has now opened space for Wine Yellow 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.
Using analytics as competitive advantage
– Wine Yellow 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wine Yellow 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. Wine Yellow can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wine Yellow 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 Wine Yellow to hire the very best people irrespective of their geographical location.
Threats Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wine Yellow in the Global Business industry. The Global Business 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wine Yellow with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Wine Yellow.
Consumer confidence and its impact on Wine Yellow 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. Wine Yellow needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Wine Yellow in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Wine Yellow 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. Wine Yellow can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Shortening product life cycle
– it is one of the major threat that Wine Yellow is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Wine Yellow business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Wine Yellow has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Wine Yellow 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001, Wine Yellow may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Weighted SWOT Analysis of Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 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 Wine Yellow needs to make to build a sustainable competitive advantage.