Building a Sustainable, Profitable Business: Fair Trade Coffee (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Building a Sustainable, Profitable Business: Fair Trade Coffee (A)
Describes the founding of a fair trade coffee company. Asks participants to develop a business plan for the introduction of fairly traded Mexican coffee into the Dutch market.
Swot Analysis of "Building a Sustainable, Profitable Business: Fair Trade Coffee (A)" written by Robert Hooijberg, Jan Van Der Kaaij includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coffee Fair facing as an external strategic factors. Some of the topics covered in Building a Sustainable, Profitable Business: Fair Trade Coffee (A) case study are - Strategic Management Strategies, Strategic planning and Global Business.
Some of the macro environment factors that can be used to understand the Building a Sustainable, Profitable Business: Fair Trade Coffee (A) casestudy better are - – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
there is backlash against globalization, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Building a Sustainable, Profitable Business: Fair Trade Coffee (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Building a Sustainable, Profitable Business: Fair Trade Coffee (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coffee Fair, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coffee Fair 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) can be done for the following purposes –
1. Strategic planning using facts provided in Building a Sustainable, Profitable Business: Fair Trade Coffee (A) case study
2. Improving business portfolio management of Coffee Fair
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 Coffee Fair
Strengths Building a Sustainable, Profitable Business: Fair Trade Coffee (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coffee Fair in Building a Sustainable, Profitable Business: Fair Trade Coffee (A) Harvard Business Review case study are -
Successful track record of launching new products
– Coffee Fair has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coffee Fair 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.
Superior customer experience
– The customer experience strategy of Coffee Fair in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Coffee Fair digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coffee Fair 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.
Ability to lead change in Global Business field
– Coffee Fair 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 Coffee Fair in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– Building a Sustainable, Profitable Business: Fair Trade Coffee (A) firm has clearly differentiated products in the market place. This has enabled Coffee Fair to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Coffee Fair to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Coffee Fair is one of the leading recruiters in the industry. Managers in the Building a Sustainable, Profitable Business: Fair Trade Coffee (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Coffee Fair is one of the most innovative firm in sector. Manager in Building a Sustainable, Profitable Business: Fair Trade Coffee (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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.
Strong track record of project management
– Coffee Fair is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Coffee Fair in the sector have low bargaining power. Building a Sustainable, Profitable Business: Fair Trade Coffee (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Coffee Fair to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Coffee Fair has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Coffee Fair to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Coffee Fair 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Building a Sustainable, Profitable Business: Fair Trade Coffee (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Building a Sustainable, Profitable Business: Fair Trade Coffee (A) are -
Low market penetration in new markets
– Outside its home market of Coffee Fair, firm in the HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Coffee Fair supply chain. Even after few cautionary changes mentioned in the HBR case study - Building a Sustainable, Profitable Business: Fair Trade Coffee (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coffee Fair vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Building a Sustainable, Profitable Business: Fair Trade Coffee (A), in the dynamic environment Coffee Fair has struggled to respond to the nimble upstart competition. Coffee Fair has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Building a Sustainable, Profitable Business: Fair Trade Coffee (A) HBR case study mentions - Coffee Fair takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Coffee Fair 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.
Slow decision making process
– As mentioned earlier in the report, Coffee Fair 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. Coffee Fair 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, Robert Hooijberg, Jan Van Der Kaaij suggests that, Coffee Fair 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Coffee Fair 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.
Increasing silos among functional specialists
– The organizational structure of Coffee Fair is dominated by functional specialists. It is not different from other players in the Global Business segment. Coffee Fair needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coffee Fair to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (A), 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.
Products dominated business model
– Even though Coffee Fair 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 - Building a Sustainable, Profitable Business: Fair Trade Coffee (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Building a Sustainable, Profitable Business: Fair Trade Coffee (A) | 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coffee Fair 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.
Learning at scale
– Online learning technologies has now opened space for Coffee Fair 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.
Buying journey improvements
– Coffee Fair can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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.
Better consumer reach
– The expansion of the 5G network will help Coffee Fair to increase its market reach. Coffee Fair 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coffee Fair is facing challenges because of the dominance of functional experts in the organization. Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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.
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 Coffee Fair 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 Coffee Fair in the consumer business. Now Coffee Fair can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Coffee Fair 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.
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. Coffee Fair can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Coffee Fair 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 Coffee Fair can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Coffee Fair 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coffee Fair 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
– Coffee Fair 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.
Threats Building a Sustainable, Profitable Business: Fair Trade Coffee (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Building a Sustainable, Profitable Business: Fair Trade Coffee (A) are -
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. Coffee Fair can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Coffee Fair is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Coffee Fair 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.
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 Coffee Fair 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A), Coffee Fair 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 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. Coffee Fair needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Consumer confidence and its impact on Coffee Fair 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 Coffee Fair with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Coffee Fair 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
– Coffee Fair 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. Coffee Fair can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Coffee Fair 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coffee Fair 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) .
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. Coffee Fair 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.
Weighted SWOT Analysis of Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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 Building a Sustainable, Profitable Business: Fair Trade Coffee (A) 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 Coffee Fair needs to make to build a sustainable competitive advantage.