Case Study Description of EAC Nutrition: Regional Expansion Strategy
This case can be used in management of international business courses to illustrate the analysis of market attractiveness, the importance of fit between firm capabilities and market requirements, and the effects of multimarket competition. It describes the international expansion challenges facing EAC Nutrition, the infant formula division of a Danish conglomerate, in early 2002. Growth in EAC's core markets of Thailand and Malaysia has stagnated and EAC is contemplating three expansion options: entry into India, geographic expansion within China, and product line expansion in existing markets.
Authors :: Petra Christmann, Jin Leong, Michele Tan, Morten Schott Knudsen
Swot Analysis of "EAC Nutrition: Regional Expansion Strategy" written by Petra Christmann, Jin Leong, Michele Tan, Morten Schott Knudsen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eac Expansion facing as an external strategic factors. Some of the topics covered in EAC Nutrition: Regional Expansion Strategy case study are - Strategic Management Strategies, Economics, International business, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the EAC Nutrition: Regional Expansion Strategy casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing energy prices, wage bills are increasing,
increasing household debt because of falling income levels, there is backlash against globalization, etc
Introduction to SWOT Analysis of EAC Nutrition: Regional Expansion Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EAC Nutrition: Regional Expansion Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eac Expansion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eac Expansion 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 EAC Nutrition: Regional Expansion Strategy can be done for the following purposes –
1. Strategic planning using facts provided in EAC Nutrition: Regional Expansion Strategy case study
2. Improving business portfolio management of Eac Expansion
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 Eac Expansion
Strengths EAC Nutrition: Regional Expansion Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eac Expansion in EAC Nutrition: Regional Expansion Strategy Harvard Business Review case study are -
Analytics focus
– Eac Expansion 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 Petra Christmann, Jin Leong, Michele Tan, Morten Schott Knudsen 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
– EAC Nutrition: Regional Expansion Strategy firm has clearly differentiated products in the market place. This has enabled Eac Expansion to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Eac Expansion to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Eac Expansion are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Eac Expansion has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eac Expansion to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Eac Expansion is one of the most innovative firm in sector. Manager in EAC Nutrition: Regional Expansion Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Eac Expansion 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 Eac Expansion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in EAC Nutrition: Regional Expansion Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Eac Expansion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eac Expansion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Eac Expansion 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 Eac Expansion 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 Eac Expansion digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eac Expansion 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.
Effective Research and Development (R&D)
– Eac Expansion 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 EAC Nutrition: Regional Expansion Strategy - 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
– Eac Expansion is present in almost all the verticals within the industry. This has provided firm in EAC Nutrition: Regional Expansion Strategy 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.
Successful track record of launching new products
– Eac Expansion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eac Expansion 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.
Weaknesses EAC Nutrition: Regional Expansion Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EAC Nutrition: Regional Expansion Strategy are -
Need for greater diversity
– Eac Expansion 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
Eac Expansion 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.
Lack of clear differentiation of Eac Expansion products
– To increase the profitability and margins on the products, Eac Expansion needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Eac Expansion 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. Eac Expansion 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the EAC Nutrition: Regional Expansion Strategy 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 Eac Expansion 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, Eac Expansion is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study EAC Nutrition: Regional Expansion Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study EAC Nutrition: Regional Expansion Strategy 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 Eac Expansion 's lucrative customers.
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 Eac Expansion supply chain. Even after few cautionary changes mentioned in the HBR case study - EAC Nutrition: Regional Expansion Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eac Expansion vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Eac Expansion 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 - EAC Nutrition: Regional Expansion Strategy should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Eac Expansion is dominated by functional specialists. It is not different from other players in the Global Business segment. Eac Expansion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eac Expansion to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study EAC Nutrition: Regional Expansion Strategy, it seems that the employees of Eac Expansion 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.
Opportunities EAC Nutrition: Regional Expansion Strategy | 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 EAC Nutrition: Regional Expansion Strategy are -
Manufacturing automation
– Eac Expansion 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.
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. Eac Expansion 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. Eac Expansion 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eac Expansion 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 Eac Expansion to hire the very best people irrespective of their geographical location.
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 Eac Expansion in the consumer business. Now Eac Expansion can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eac Expansion 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, EAC Nutrition: Regional Expansion Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Eac Expansion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Eac Expansion 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.
Creating value in data economy
– The success of analytics program of Eac Expansion has opened avenues for new revenue streams for the organization in the industry. This can help Eac Expansion to build a more holistic ecosystem as suggested in the EAC Nutrition: Regional Expansion Strategy case study. Eac Expansion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Eac Expansion 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.
Building a culture of innovation
– managers at Eac Expansion 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eac Expansion 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.
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 Eac Expansion 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eac Expansion can use these opportunities to build new business models that can help the communities that Eac Expansion operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats EAC Nutrition: Regional Expansion Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EAC Nutrition: Regional Expansion Strategy are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Eac Expansion
– 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 Eac Expansion.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EAC Nutrition: Regional Expansion Strategy, Eac Expansion 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 Eac Expansion in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Eac Expansion 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.
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. Eac Expansion 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 Eac Expansion 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.
Technology acceleration in Forth Industrial Revolution
– Eac Expansion has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Eac Expansion 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 Eac Expansion in the Global Business sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Eac Expansion 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
– Eac Expansion 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Eac Expansion.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eac Expansion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of EAC Nutrition: Regional Expansion Strategy 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 EAC Nutrition: Regional Expansion Strategy 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 EAC Nutrition: Regional Expansion Strategy 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 EAC Nutrition: Regional Expansion Strategy 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 EAC Nutrition: Regional Expansion Strategy 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 Eac Expansion needs to make to build a sustainable competitive advantage.