Case Study Description of Tetra Pak: Freedom with Accountability
Looks at the strategic options and potential conflicts facing Teresa Presas following her promotion to director for corporate environmental affairs. She is preparing a new corporate (global) environmental strategy for Tetra Pak that she is about to present to group management. She circulated the draft strategy for internal review and received comments from colleagues in Asia and North America. Based on their feedback, Presas must decide how much she should take regional factors into account in setting a global strategy for the organization, given that the two regions have different views on important pillars of the strategy.
Authors :: Ulrich Steger, Catherine A. Ramus, Mope Ogunsulire
Swot Analysis of "Tetra Pak: Freedom with Accountability" written by Ulrich Steger, Catherine A. Ramus, Mope Ogunsulire includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Presas Tetra facing as an external strategic factors. Some of the topics covered in Tetra Pak: Freedom with Accountability case study are - Strategic Management Strategies, Globalization, Marketing, Strategy, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Tetra Pak: Freedom with Accountability casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, there is backlash against globalization, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of Tetra Pak: Freedom with Accountability
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tetra Pak: Freedom with Accountability case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Presas Tetra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Presas Tetra 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 Tetra Pak: Freedom with Accountability can be done for the following purposes –
1. Strategic planning using facts provided in Tetra Pak: Freedom with Accountability case study
2. Improving business portfolio management of Presas Tetra
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 Presas Tetra
Strengths Tetra Pak: Freedom with Accountability | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Presas Tetra in Tetra Pak: Freedom with Accountability Harvard Business Review case study are -
Diverse revenue streams
– Presas Tetra is present in almost all the verticals within the industry. This has provided firm in Tetra Pak: Freedom with Accountability 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.
Ability to lead change in Global Business field
– Presas Tetra 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 Presas Tetra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Presas Tetra 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 Presas Tetra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tetra Pak: Freedom with Accountability Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Presas Tetra 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 Ulrich Steger, Catherine A. Ramus, Mope Ogunsulire 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
– Tetra Pak: Freedom with Accountability firm has clearly differentiated products in the market place. This has enabled Presas Tetra to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Presas Tetra to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Presas Tetra in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Presas Tetra 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.
Successful track record of launching new products
– Presas Tetra has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Presas Tetra 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.
Training and development
– Presas Tetra has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tetra Pak: Freedom with Accountability 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.
Cross disciplinary teams
– Horizontal connected teams at the Presas Tetra 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.
Operational resilience
– The operational resilience strategy in the Tetra Pak: Freedom with Accountability 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.
Highly skilled collaborators
– Presas Tetra 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 Tetra Pak: Freedom with Accountability HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Tetra Pak: Freedom with Accountability | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tetra Pak: Freedom with Accountability are -
Workers concerns about automation
– As automation is fast increasing in the segment, Presas Tetra 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tetra Pak: Freedom with Accountability 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 Presas Tetra has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Presas Tetra 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tetra Pak: Freedom with Accountability 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 Presas Tetra 's lucrative customers.
Products dominated business model
– Even though Presas Tetra 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 - Tetra Pak: Freedom with Accountability should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Presas Tetra 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Presas Tetra is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tetra Pak: Freedom with Accountability can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tetra Pak: Freedom with Accountability, it seems that the employees of Presas Tetra 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.
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 Presas Tetra supply chain. Even after few cautionary changes mentioned in the HBR case study - Tetra Pak: Freedom with Accountability, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Presas Tetra vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Presas Tetra is dominated by functional specialists. It is not different from other players in the Global Business segment. Presas Tetra needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Presas Tetra to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Ulrich Steger, Catherine A. Ramus, Mope Ogunsulire suggests that, Presas Tetra 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.
Opportunities Tetra Pak: Freedom with Accountability | 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 Tetra Pak: Freedom with Accountability are -
Better consumer reach
– The expansion of the 5G network will help Presas Tetra to increase its market reach. Presas Tetra 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Presas Tetra in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Loyalty marketing
– Presas Tetra 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.
Creating value in data economy
– The success of analytics program of Presas Tetra has opened avenues for new revenue streams for the organization in the industry. This can help Presas Tetra to build a more holistic ecosystem as suggested in the Tetra Pak: Freedom with Accountability case study. Presas Tetra can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Presas Tetra 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 Tetra Pak: Freedom with Accountability - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Presas Tetra to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Presas Tetra 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
– Presas Tetra 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.
Learning at scale
– Online learning technologies has now opened space for Presas Tetra 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.
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. Presas Tetra can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Presas Tetra in the consumer business. Now Presas Tetra can target international markets with far fewer capital restrictions requirements than the existing system.
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 Presas Tetra 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.
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. Presas Tetra 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 Presas Tetra 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 Presas Tetra to hire the very best people irrespective of their geographical location.
Threats Tetra Pak: Freedom with Accountability External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tetra Pak: Freedom with Accountability are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Presas Tetra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Presas Tetra needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Presas Tetra 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 Presas Tetra in the Global Business sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Presas Tetra 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 Tetra Pak: Freedom with Accountability .
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. Presas Tetra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Presas Tetra 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.
Environmental challenges
– Presas Tetra 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. Presas Tetra can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Presas Tetra 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.
Regulatory challenges
– Presas Tetra 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
– Presas Tetra has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Presas Tetra 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 Tetra Pak: Freedom with Accountability, Presas Tetra 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 Tetra Pak: Freedom with Accountability 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 Tetra Pak: Freedom with Accountability 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 Tetra Pak: Freedom with Accountability 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 Tetra Pak: Freedom with Accountability 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 Tetra Pak: Freedom with Accountability 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 Presas Tetra needs to make to build a sustainable competitive advantage.
