Nestle's Globe Program (A): The Early Months SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
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Case Study SWOT Analysis Solution
Case Study Description of Nestle's Globe Program (A): The Early Months
Chris Johnson has been given the task of initiating and managing the world's largest SAP rollout. The scope is global, the time frame for completion is five years, and the cost is estimated at 3 billion Swiss francs. Johnson has to move to Switzerland to start building an organization and get Nestle ready for a new way of managing the business. Documents his first months in his new job and lays out the early challenges.
Swot Analysis of "Nestle's Globe Program (A): The Early Months" written by Peter Killing includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Johnson Francs facing as an external strategic factors. Some of the topics covered in Nestle's Globe Program (A): The Early Months case study are - Strategic Management Strategies, Change management, Globalization, Project management, Strategy execution and Global Business.
Some of the macro environment factors that can be used to understand the Nestle's Globe Program (A): The Early Months casestudy better are - – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
talent flight as more people leaving formal jobs, increasing commodity prices, etc
Introduction to SWOT Analysis of Nestle's Globe Program (A): The Early Months
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nestle's Globe Program (A): The Early Months case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Johnson Francs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Johnson Francs 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 Nestle's Globe Program (A): The Early Months can be done for the following purposes –
1. Strategic planning using facts provided in Nestle's Globe Program (A): The Early Months case study
2. Improving business portfolio management of Johnson Francs
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 Johnson Francs
Strengths Nestle's Globe Program (A): The Early Months | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Johnson Francs in Nestle's Globe Program (A): The Early Months Harvard Business Review case study are -
Ability to lead change in Global Business field
– Johnson Francs 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 Johnson Francs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Johnson Francs is present in almost all the verticals within the industry. This has provided firm in Nestle's Globe Program (A): The Early Months 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.
Innovation driven organization
– Johnson Francs is one of the most innovative firm in sector. Manager in Nestle's Globe Program (A): The Early Months Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Johnson Francs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Johnson Francs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Johnson Francs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Johnson Francs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Johnson Francs 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.
Operational resilience
– The operational resilience strategy in the Nestle's Globe Program (A): The Early Months 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.
Organizational Resilience of Johnson Francs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Johnson Francs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Nestle's Globe Program (A): The Early Months firm has clearly differentiated products in the market place. This has enabled Johnson Francs to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Johnson Francs to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Johnson Francs 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 Johnson Francs 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 Johnson Francs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Johnson Francs 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.
Weaknesses Nestle's Globe Program (A): The Early Months | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nestle's Globe Program (A): The Early Months are -
Products dominated business model
– Even though Johnson Francs 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 - Nestle's Globe Program (A): The Early Months should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Johnson Francs 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 Johnson Francs is dominated by functional specialists. It is not different from other players in the Global Business segment. Johnson Francs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Johnson Francs to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nestle's Globe Program (A): The Early Months, in the dynamic environment Johnson Francs has struggled to respond to the nimble upstart competition. Johnson Francs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Peter Killing suggests that, Johnson Francs 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.
Interest costs
– Compare to the competition, Johnson Francs 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.
Aligning sales with marketing
– It come across in the case study Nestle's Globe Program (A): The Early Months 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 Nestle's Globe Program (A): The Early Months can leverage the sales team experience to cultivate customer relationships as Johnson Francs is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nestle's Globe Program (A): The Early Months, is just above the industry average. Johnson Francs needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Nestle's Globe Program (A): The Early Months 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 Johnson Francs 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nestle's Globe Program (A): The Early Months 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 Johnson Francs has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Johnson Francs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nestle's Globe Program (A): The Early Months 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 Nestle's Globe Program (A): The Early Months | 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 Nestle's Globe Program (A): The Early Months are -
Developing new processes and practices
– Johnson Francs 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Johnson Francs is facing challenges because of the dominance of functional experts in the organization. Nestle's Globe Program (A): The Early Months 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.
Learning at scale
– Online learning technologies has now opened space for Johnson Francs 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Johnson Francs can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Johnson Francs 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. Johnson Francs 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.
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 Johnson Francs in the consumer business. Now Johnson Francs can target international markets with far fewer capital restrictions requirements than the existing system.
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. Johnson Francs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Johnson Francs 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 Nestle's Globe Program (A): The Early Months - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Johnson Francs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Johnson Francs 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Johnson Francs 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.
Buying journey improvements
– Johnson Francs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nestle's Globe Program (A): The Early Months 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Johnson Francs can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nestle's Globe Program (A): The Early Months, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Johnson Francs 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 Johnson Francs to hire the very best people irrespective of their geographical location.
Threats Nestle's Globe Program (A): The Early Months External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nestle's Globe Program (A): The Early Months are -
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 Johnson Francs business can come under increasing regulations regarding data privacy, data security, etc.
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. Johnson Francs 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nestle's Globe Program (A): The Early Months, Johnson Francs 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Johnson Francs 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.
Stagnating economy with rate increase
– Johnson Francs 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.
Increasing wage structure of Johnson Francs
– 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 Johnson Francs.
Technology acceleration in Forth Industrial Revolution
– Johnson Francs has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Johnson Francs 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.
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 Johnson Francs in the Global Business sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Johnson Francs 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Johnson Francs 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 Nestle's Globe Program (A): The Early Months .
Shortening product life cycle
– it is one of the major threat that Johnson Francs is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Johnson Francs 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.
Weighted SWOT Analysis of Nestle's Globe Program (A): The Early Months 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 Nestle's Globe Program (A): The Early Months 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 Nestle's Globe Program (A): The Early Months 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 Nestle's Globe Program (A): The Early Months 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 Nestle's Globe Program (A): The Early Months 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 Johnson Francs needs to make to build a sustainable competitive advantage.