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Ahold: A Royal Dutch Disaster SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Ahold: A Royal Dutch Disaster


The case traces the history of Ahold, the world's third largest food retailer, describing in detail the events in the 10 years leading up to its collapse. After the new CEO, Cees van der Hoeven, took over in 1993, Ahold embarked on a program of rapid expansion with a target of 15 per cent growth in earnings per share per year. The strategy took the form of penetrating new geographic markets and diversification into related industries. While van der Hoeven appeared to be achieving his targets, in reality, he was sowing the seeds of his own destruction. While the apparent reason for Ahold's downfall was the discovery of fraud at one of its US subsidiaries, the actual causes were much more complex. The company itself survived, thanks in part to the existence of a "poison pill", but was radically restructured over the next two years with many of van der Hoeven's ventures being dismantled. The case offers the opportunity to discuss many of the common causes of company failure: 1) poor strategic decisions, 2) over-expansion, especially through ill-judged acquisitions, 3) a dominant CEO driven by greed and hubris, 4) weak internal controls, particularly in regard to remote operations, 5) ineffective boards. The case can also be used to comment on the existence and effect of "poison pills" and other restrictions on ordinary shareholder power; corporate governance and the many reforms now in place or being proposed; and how distant operations can be effectively controlled.

Authors :: Stewart Hamilton, Alicia Micklethwait

Topics :: Global Business

Tags :: Growth strategy, Mergers & acquisitions, Risk management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Ahold: A Royal Dutch Disaster" written by Stewart Hamilton, Alicia Micklethwait includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ahold Der facing as an external strategic factors. Some of the topics covered in Ahold: A Royal Dutch Disaster case study are - Strategic Management Strategies, Growth strategy, Mergers & acquisitions, Risk management and Global Business.


Some of the macro environment factors that can be used to understand the Ahold: A Royal Dutch Disaster casestudy better are - – central banks are concerned over increasing inflation, there is backlash against globalization, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc



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Introduction to SWOT Analysis of Ahold: A Royal Dutch Disaster


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ahold: A Royal Dutch Disaster case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ahold Der, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ahold Der 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 Ahold: A Royal Dutch Disaster can be done for the following purposes –
1. Strategic planning using facts provided in Ahold: A Royal Dutch Disaster case study
2. Improving business portfolio management of Ahold Der
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 Ahold Der




Strengths Ahold: A Royal Dutch Disaster | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Ahold Der in Ahold: A Royal Dutch Disaster Harvard Business Review case study are -

Learning organization

- Ahold Der 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 Ahold Der is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ahold: A Royal Dutch Disaster Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Sustainable margins compare to other players in Global Business industry

– Ahold: A Royal Dutch Disaster firm has clearly differentiated products in the market place. This has enabled Ahold Der to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ahold Der to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Ahold Der is present in almost all the verticals within the industry. This has provided firm in Ahold: A Royal Dutch Disaster 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.

Successful track record of launching new products

– Ahold Der has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ahold Der 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 Ahold Der

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ahold Der does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Low bargaining power of suppliers

– Suppliers of Ahold Der in the sector have low bargaining power. Ahold: A Royal Dutch Disaster has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ahold Der to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of Ahold Der in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– Ahold Der is one of the leading recruiters in the industry. Managers in the Ahold: A Royal Dutch Disaster 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 Ahold Der 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.

High switching costs

– The high switching costs that Ahold Der 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.

Analytics focus

– Ahold Der 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 Stewart Hamilton, Alicia Micklethwait 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.

Highly skilled collaborators

– Ahold Der 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 Ahold: A Royal Dutch Disaster HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.






Weaknesses Ahold: A Royal Dutch Disaster | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Ahold: A Royal Dutch Disaster are -

High cash cycle compare to competitors

Ahold Der 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Ahold: A Royal Dutch Disaster, it seems that the employees of Ahold Der 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Ahold: A Royal Dutch Disaster, in the dynamic environment Ahold Der has struggled to respond to the nimble upstart competition. Ahold Der has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Ahold: A Royal Dutch Disaster, is just above the industry average. Ahold Der 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.

High operating costs

– Compare to the competitors, firm in the HBR case study Ahold: A Royal Dutch Disaster 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 Ahold Der 's lucrative customers.

Need for greater diversity

– Ahold Der 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.

Products dominated business model

– Even though Ahold Der 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 - Ahold: A Royal Dutch Disaster should strive to include more intangible value offerings along with its core products and services.

Workers concerns about automation

– As automation is fast increasing in the segment, Ahold Der 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.

Slow decision making process

– As mentioned earlier in the report, Ahold Der 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. Ahold Der 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.

High bargaining power of channel partners

– Because of the regulatory requirements, Stewart Hamilton, Alicia Micklethwait suggests that, Ahold Der 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.

Aligning sales with marketing

– It come across in the case study Ahold: A Royal Dutch Disaster 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 Ahold: A Royal Dutch Disaster can leverage the sales team experience to cultivate customer relationships as Ahold Der is planning to shift buying processes online.




Opportunities Ahold: A Royal Dutch Disaster | 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 Ahold: A Royal Dutch Disaster 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, Ahold Der can use these opportunities to build new business models that can help the communities that Ahold Der operates in. Secondly it can use opportunities from government spending in Global Business sector.

Leveraging digital technologies

– Ahold Der 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.

Better consumer reach

– The expansion of the 5G network will help Ahold Der to increase its market reach. Ahold Der 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Ahold Der 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.

Learning at scale

– Online learning technologies has now opened space for Ahold Der 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 Ahold Der 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 Ahold Der to hire the very best people irrespective of their geographical location.

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. Ahold Der can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– Ahold Der 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.

Manufacturing automation

– Ahold Der can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.

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. Ahold Der 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. Ahold Der 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.

Loyalty marketing

– Ahold Der 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.

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. Ahold Der can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Ahold Der can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.




Threats Ahold: A Royal Dutch Disaster External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Ahold: A Royal Dutch Disaster are -

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 Ahold Der.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ahold: A Royal Dutch Disaster, Ahold Der 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 .

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.

Environmental challenges

– Ahold Der 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. Ahold Der can take advantage of this fund but it will also bring new competitors in the Global Business industry.

Easy access to finance

– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ahold Der can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ahold Der with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Regulatory challenges

– Ahold Der 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.

High dependence on third party suppliers

– Ahold Der 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.

Stagnating economy with rate increase

– Ahold Der 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.

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 Ahold Der in the Global Business sector and impact the bottomline of the organization.

Consumer confidence and its impact on Ahold Der 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. Ahold Der needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

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.




Weighted SWOT Analysis of Ahold: A Royal Dutch Disaster 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 Ahold: A Royal Dutch Disaster 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 Ahold: A Royal Dutch Disaster 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 Ahold: A Royal Dutch Disaster 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 Ahold: A Royal Dutch Disaster 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 Ahold Der needs to make to build a sustainable competitive advantage.



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