Rwandan Tea Industry: Looking into the Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rwandan Tea Industry: Looking into the Future
In 2003, the Rwandan government was focused on transforming the nation's tea industry into a world-class competitor. To accomplish this objective and stave off the downward prices that plagued the international tea market, the government believed that the industry needed to develop a diversified and value-added product portfolio. This would entail large investments in improving quality and productivity, as well as a new and more competitive price scheme for farmers. Part of the government's strategy for the tea industry involved wide-scale privatization to infuse the industry with capital, competition, and management expertise. But it remained uncertain whether the government could achieve its own objectives while ceding control to private, probably foreign, owners. Could Rwandan tea find its way in a complicated and highly competitive international market?
Swot Analysis of "Rwandan Tea Industry: Looking into the Future" written by Cate Reavis, Debora L. Spar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tea Rwandan facing as an external strategic factors. Some of the topics covered in Rwandan Tea Industry: Looking into the Future case study are - Strategic Management Strategies, Emerging markets, Government and Global Business.
Some of the macro environment factors that can be used to understand the Rwandan Tea Industry: Looking into the Future casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, increasing commodity prices, central banks are concerned over increasing inflation, increasing energy prices, wage bills are increasing, geopolitical disruptions,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Rwandan Tea Industry: Looking into the Future
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rwandan Tea Industry: Looking into the Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tea Rwandan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tea Rwandan 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 Rwandan Tea Industry: Looking into the Future can be done for the following purposes –
1. Strategic planning using facts provided in Rwandan Tea Industry: Looking into the Future case study
2. Improving business portfolio management of Tea Rwandan
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 Tea Rwandan
Strengths Rwandan Tea Industry: Looking into the Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tea Rwandan in Rwandan Tea Industry: Looking into the Future Harvard Business Review case study are -
Training and development
– Tea Rwandan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rwandan Tea Industry: Looking into the Future 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.
Operational resilience
– The operational resilience strategy in the Rwandan Tea Industry: Looking into the Future 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.
Analytics focus
– Tea Rwandan 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 Cate Reavis, Debora L. Spar 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.
Successful track record of launching new products
– Tea Rwandan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tea Rwandan 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.
Innovation driven organization
– Tea Rwandan is one of the most innovative firm in sector. Manager in Rwandan Tea Industry: Looking into the Future Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Tea Rwandan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Rwandan Tea Industry: Looking into the Future firm has clearly differentiated products in the market place. This has enabled Tea Rwandan to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Tea Rwandan to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Tea Rwandan in the sector have low bargaining power. Rwandan Tea Industry: Looking into the Future has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tea Rwandan to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Tea Rwandan 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 Rwandan Tea Industry: Looking into the Future - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Tea Rwandan 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 Tea Rwandan 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.
Highly skilled collaborators
– Tea Rwandan 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 Rwandan Tea Industry: Looking into the Future HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Rwandan Tea Industry: Looking into the Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rwandan Tea Industry: Looking into the Future are -
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 Tea Rwandan supply chain. Even after few cautionary changes mentioned in the HBR case study - Rwandan Tea Industry: Looking into the Future, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tea Rwandan vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rwandan Tea Industry: Looking into the Future 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 Tea Rwandan has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rwandan Tea Industry: Looking into the Future, is just above the industry average. Tea Rwandan 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.
Interest costs
– Compare to the competition, Tea Rwandan 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.
Slow decision making process
– As mentioned earlier in the report, Tea Rwandan 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. Tea Rwandan 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, Cate Reavis, Debora L. Spar suggests that, Tea Rwandan 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.
Lack of clear differentiation of Tea Rwandan products
– To increase the profitability and margins on the products, Tea Rwandan needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Tea Rwandan is dominated by functional specialists. It is not different from other players in the Global Business segment. Tea Rwandan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tea Rwandan to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rwandan Tea Industry: Looking into the Future, it seems that the employees of Tea Rwandan 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.
Need for greater diversity
– Tea Rwandan 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Rwandan Tea Industry: Looking into the Future 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 Tea Rwandan 's lucrative customers.
Opportunities Rwandan Tea Industry: Looking into the Future | 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 Rwandan Tea Industry: Looking into the Future are -
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. Tea Rwandan 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. Tea Rwandan 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tea Rwandan is facing challenges because of the dominance of functional experts in the organization. Rwandan Tea Industry: Looking into the Future case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Tea Rwandan 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.
Leveraging digital technologies
– Tea Rwandan 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.
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 Tea Rwandan in the consumer business. Now Tea Rwandan can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Tea Rwandan 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.
Buying journey improvements
– Tea Rwandan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rwandan Tea Industry: Looking into the Future 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.
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 Tea Rwandan 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tea Rwandan 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 Tea Rwandan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Tea Rwandan 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.
Using analytics as competitive advantage
– Tea Rwandan 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 Rwandan Tea Industry: Looking into the Future - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tea Rwandan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Tea Rwandan 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.
Threats Rwandan Tea Industry: Looking into the Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rwandan Tea Industry: Looking into the Future are -
Increasing wage structure of Tea Rwandan
– 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 Tea Rwandan.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tea Rwandan 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.
Regulatory challenges
– Tea Rwandan 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.
Technology acceleration in Forth Industrial Revolution
– Tea Rwandan has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Tea Rwandan 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.
Shortening product life cycle
– it is one of the major threat that Tea Rwandan is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Tea Rwandan in the Global Business sector and impact the bottomline of the organization.
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. Tea Rwandan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Tea Rwandan 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. Tea Rwandan can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Stagnating economy with rate increase
– Tea Rwandan 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.
Consumer confidence and its impact on Tea Rwandan 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. Tea Rwandan 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.
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 Tea Rwandan business can come under increasing regulations regarding data privacy, data security, etc.
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. Tea Rwandan needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Rwandan Tea Industry: Looking into the Future 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 Rwandan Tea Industry: Looking into the Future 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 Rwandan Tea Industry: Looking into the Future 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 Rwandan Tea Industry: Looking into the Future 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 Rwandan Tea Industry: Looking into the Future 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 Tea Rwandan needs to make to build a sustainable competitive advantage.