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 - – central banks are concerned over increasing inflation, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
Ability to recruit top talent
– Eac Expansion is one of the leading recruiters in the industry. Managers in the EAC Nutrition: Regional Expansion Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Eac Expansion 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.
Training and development
– Eac Expansion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in EAC Nutrition: Regional Expansion Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the 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.
Highly skilled collaborators
– Eac Expansion 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 EAC Nutrition: Regional Expansion Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Eac Expansion in the sector have low bargaining power. EAC Nutrition: Regional Expansion Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eac Expansion to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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 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.
No frontier risks strategy
– After analyzing the HBR case study EAC Nutrition: Regional Expansion Strategy, 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.
Low market penetration in new markets
– Outside its home market of Eac Expansion, firm in the HBR case study EAC Nutrition: Regional Expansion Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Petra Christmann, Jin Leong, Michele Tan, Morten Schott Knudsen suggests that, Eac Expansion 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.
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.
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 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 strategic competitive environment developments
– As EAC Nutrition: Regional Expansion Strategy HBR case study mentions - Eac Expansion 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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eac Expansion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Eac Expansion to increase its market reach. Eac Expansion 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.
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.
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.
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.
Buying journey improvements
– Eac Expansion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. EAC Nutrition: Regional Expansion Strategy 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.
Using analytics as competitive advantage
– Eac Expansion 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 EAC Nutrition: Regional Expansion Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eac Expansion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Eac Expansion can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Eac Expansion 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.
Loyalty marketing
– Eac Expansion 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.
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 -
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.
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.
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.
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 Eac Expansion business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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. Eac Expansion 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 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 .
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eac Expansion 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 EAC Nutrition: Regional Expansion Strategy .
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.
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.