This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Barilla, the world's largest pasta company, has introduced a new high-quality, high-priced product line that features a range of authentic Italian food products sourced from artisan producers. Management believes the line will appeal to consumers seeking healthier foods and convenience, and will help extend Barilla's brand identification beyond pasta. However, the new line is a bold departure from Barilla's core competencies of high-volume production and sales of fast moving, low-priced goods. Provides an opportunity to discuss trends in consumer eating habits, supply chains for locally-produced goods, and changes in retail formats. In addition, provides an opportunity to discuss the difference in investment philosophy between a family-owned company and a publicly-traded company.
Swot Analysis of "Academia Barilla" written by David E. Bell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Barilla's Pasta facing as an external strategic factors. Some of the topics covered in Academia Barilla case study are - Strategic Management Strategies, Competitive strategy and Global Business.
Some of the macro environment factors that can be used to understand the Academia Barilla casestudy better are - – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, geopolitical disruptions, wage bills are increasing,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Academia Barilla case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barilla's Pasta, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barilla's Pasta 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 Academia Barilla can be done for the following purposes –
1. Strategic planning using facts provided in Academia Barilla case study
2. Improving business portfolio management of Barilla's Pasta
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 Barilla's Pasta
Strengths Academia Barilla | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barilla's Pasta in Academia Barilla Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Barilla's Pasta in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Barilla's Pasta 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 Academia Barilla - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Barilla's Pasta 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.
Analytics focus
– Barilla's Pasta 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 David E. Bell 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.
Operational resilience
– The operational resilience strategy in the Academia Barilla 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.
Ability to recruit top talent
– Barilla's Pasta is one of the leading recruiters in the industry. Managers in the Academia Barilla are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Barilla's Pasta has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Barilla's Pasta 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.
Strong track record of project management
– Barilla's Pasta is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Barilla's Pasta 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 Barilla's Pasta is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Academia Barilla Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Barilla's Pasta 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 Barilla's Pasta in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Barilla's Pasta 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 Academia Barilla HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Barilla's Pasta
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Barilla's Pasta does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Academia Barilla | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Academia Barilla are -
Low market penetration in new markets
– Outside its home market of Barilla's Pasta, firm in the HBR case study Academia Barilla needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Barilla's Pasta 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 Academia Barilla 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 Academia Barilla can leverage the sales team experience to cultivate customer relationships as Barilla's Pasta is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Academia Barilla HBR case study mentions - Barilla's Pasta 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Barilla's Pasta 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Academia Barilla, is just above the industry average. Barilla's Pasta 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.
Need for greater diversity
– Barilla's Pasta 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Academia Barilla, in the dynamic environment Barilla's Pasta has struggled to respond to the nimble upstart competition. Barilla's Pasta has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Barilla's Pasta is dominated by functional specialists. It is not different from other players in the Global Business segment. Barilla's Pasta needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Barilla's Pasta to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Barilla's Pasta products
– To increase the profitability and margins on the products, Barilla's Pasta needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Academia Barilla 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 Barilla's Pasta 's lucrative customers.
Opportunities Academia Barilla | 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 Academia Barilla are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Barilla's Pasta is facing challenges because of the dominance of functional experts in the organization. Academia Barilla 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.
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. Barilla's Pasta can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Barilla's Pasta can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Barilla's Pasta 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.
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. Barilla's Pasta can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Barilla's Pasta 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. Barilla's Pasta 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. Barilla's Pasta 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.
Loyalty marketing
– Barilla's Pasta 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.
Learning at scale
– Online learning technologies has now opened space for Barilla's Pasta 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Barilla's Pasta 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, Academia Barilla, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Barilla's Pasta to increase its market reach. Barilla's Pasta 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.
Using analytics as competitive advantage
– Barilla's Pasta 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 Academia Barilla - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Barilla's Pasta to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Barilla's Pasta 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.
Threats Academia Barilla External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Academia Barilla are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Barilla's Pasta 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
– Barilla's Pasta 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.
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. Barilla's Pasta can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Academia Barilla, Barilla's Pasta 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 .
Increasing wage structure of Barilla's Pasta
– 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 Barilla's Pasta.
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. Barilla's Pasta 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.
Shortening product life cycle
– it is one of the major threat that Barilla's Pasta is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Barilla's Pasta with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Barilla's Pasta 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.
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 Barilla's Pasta in the Global Business sector and impact the bottomline of the organization.
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. Barilla's Pasta needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Barilla's Pasta 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. Barilla's Pasta can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Barilla's Pasta business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Academia Barilla 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 Academia Barilla 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 Academia Barilla 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 Academia Barilla 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 Academia Barilla 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 Barilla's Pasta needs to make to build a sustainable competitive advantage.