Horse Trading: Food Sourcing in the Twenty-First Century SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Horse Trading: Food Sourcing in the Twenty-First Century
In January 2013, Irish authorities were the first to uncover the year's first food sourcing scandal: horsemeat sold as beef on supermarket shelves. It was not long before regulators and retailers realized the problem was truly a continental one. The incident involved French exporters, Luxembourger production facilities, Cypriot and Dutch meat traders, British and Swedish retailers, and Romanian horsemeat. Food service providers and retailers were forced to test beef products to ensure they were horse-free, pulling products that contained traces of equine meat. British supermarkets alone disposed of an estimated 10 million "beef" burgers in the wake of the scandal. This case is an example of the challenges of managing the complex global supply chains that make up the modern food industry. In this class discussion, students will use concepts from management, economics, and public policy to assess the damage of this event and to analyze strategies for preventing similar incidents in the future.
Authors :: Russell Walker, Joanna Wilson
Topics :: Global Business
Tags :: Economics, International business, Public relations, Risk management, Supply chain, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Horse Trading: Food Sourcing in the Twenty-First Century" written by Russell Walker, Joanna Wilson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beef Horsemeat facing as an external strategic factors. Some of the topics covered in Horse Trading: Food Sourcing in the Twenty-First Century case study are - Strategic Management Strategies, Economics, International business, Public relations, Risk management, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Horse Trading: Food Sourcing in the Twenty-First Century casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Horse Trading: Food Sourcing in the Twenty-First Century
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Horse Trading: Food Sourcing in the Twenty-First Century case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beef Horsemeat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beef Horsemeat 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 Horse Trading: Food Sourcing in the Twenty-First Century can be done for the following purposes –
1. Strategic planning using facts provided in Horse Trading: Food Sourcing in the Twenty-First Century case study
2. Improving business portfolio management of Beef Horsemeat
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 Beef Horsemeat
Strengths Horse Trading: Food Sourcing in the Twenty-First Century | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beef Horsemeat in Horse Trading: Food Sourcing in the Twenty-First Century Harvard Business Review case study are -
Effective Research and Development (R&D)
– Beef Horsemeat 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 Horse Trading: Food Sourcing in the Twenty-First Century - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Beef Horsemeat is present in almost all the verticals within the industry. This has provided firm in Horse Trading: Food Sourcing in the Twenty-First Century 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
– Beef Horsemeat 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 Beef Horsemeat in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Beef Horsemeat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beef Horsemeat has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Beef Horsemeat has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Superior customer experience
– The customer experience strategy of Beef Horsemeat in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Global Business industry
– Horse Trading: Food Sourcing in the Twenty-First Century firm has clearly differentiated products in the market place. This has enabled Beef Horsemeat to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Beef Horsemeat to invest into research and development (R&D) and innovation.
Training and development
– Beef Horsemeat has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Horse Trading: Food Sourcing in the Twenty-First Century 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.
Learning organization
- Beef Horsemeat 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 Beef Horsemeat is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Horse Trading: Food Sourcing in the Twenty-First Century Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Beef Horsemeat 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.
Low bargaining power of suppliers
– Suppliers of Beef Horsemeat in the sector have low bargaining power. Horse Trading: Food Sourcing in the Twenty-First Century has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beef Horsemeat to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Beef Horsemeat has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beef Horsemeat to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Horse Trading: Food Sourcing in the Twenty-First Century | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Horse Trading: Food Sourcing in the Twenty-First Century are -
Lack of clear differentiation of Beef Horsemeat products
– To increase the profitability and margins on the products, Beef Horsemeat needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Horse Trading: Food Sourcing in the Twenty-First Century, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Beef Horsemeat is dominated by functional specialists. It is not different from other players in the Global Business segment. Beef Horsemeat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beef Horsemeat to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Beef Horsemeat 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. Beef Horsemeat 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, Russell Walker, Joanna Wilson suggests that, Beef Horsemeat 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.
Skills based hiring
– The stress on hiring functional specialists at Beef Horsemeat 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.
Aligning sales with marketing
– It come across in the case study Horse Trading: Food Sourcing in the Twenty-First Century 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 Horse Trading: Food Sourcing in the Twenty-First Century can leverage the sales team experience to cultivate customer relationships as Beef Horsemeat is planning to shift buying processes online.
Need for greater diversity
– Beef Horsemeat 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 cash cycle compare to competitors
Beef Horsemeat 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Horse Trading: Food Sourcing in the Twenty-First Century, is just above the industry average. Beef Horsemeat 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Beef Horsemeat is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Horse Trading: Food Sourcing in the Twenty-First Century can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Horse Trading: Food Sourcing in the Twenty-First Century | 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 Horse Trading: Food Sourcing in the Twenty-First Century are -
Manufacturing automation
– Beef Horsemeat 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
– Beef Horsemeat 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 Horse Trading: Food Sourcing in the Twenty-First Century - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beef Horsemeat to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Beef Horsemeat can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Horse Trading: Food Sourcing in the Twenty-First Century 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.
Building a culture of innovation
– managers at Beef Horsemeat 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.
Developing new processes and practices
– Beef Horsemeat 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beef Horsemeat 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 Beef Horsemeat can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Beef Horsemeat 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.
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 Beef Horsemeat in the consumer business. Now Beef Horsemeat can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Beef Horsemeat has opened avenues for new revenue streams for the organization in the industry. This can help Beef Horsemeat to build a more holistic ecosystem as suggested in the Horse Trading: Food Sourcing in the Twenty-First Century case study. Beef Horsemeat can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Beef Horsemeat 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beef Horsemeat 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beef Horsemeat can use these opportunities to build new business models that can help the communities that Beef Horsemeat operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Horse Trading: Food Sourcing in the Twenty-First Century External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Horse Trading: Food Sourcing in the Twenty-First Century are -
Regulatory challenges
– Beef Horsemeat 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
– Beef Horsemeat has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Beef Horsemeat 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.
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. Beef Horsemeat 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.
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 Beef Horsemeat in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on Beef Horsemeat 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Beef Horsemeat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beef Horsemeat 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 Horse Trading: Food Sourcing in the Twenty-First Century .
Shortening product life cycle
– it is one of the major threat that Beef Horsemeat 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 Beef Horsemeat business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Horse Trading: Food Sourcing in the Twenty-First Century, Beef Horsemeat 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 .
High dependence on third party suppliers
– Beef Horsemeat 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.
Increasing wage structure of Beef Horsemeat
– 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 Beef Horsemeat.
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. Beef Horsemeat can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Horse Trading: Food Sourcing in the Twenty-First Century 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 Horse Trading: Food Sourcing in the Twenty-First Century 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 Horse Trading: Food Sourcing in the Twenty-First Century 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 Horse Trading: Food Sourcing in the Twenty-First Century 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 Horse Trading: Food Sourcing in the Twenty-First Century 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 Beef Horsemeat needs to make to build a sustainable competitive advantage.