Gary Hirshberg and Stonyfield Farm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gary Hirshberg and Stonyfield Farm
Gary Hirshberg and Stonyfield Farm is the story of one entrepreneur's vision and journey to create a market-leading, environmentally responsible business founded on the principles of product quality, organizational alignment and sustainability. A former environmental activist, Hirshberg built Stonyfield Farm, (an organic yogurt maker based in New Hampshire), up from a seven cow-operation into a business that in 2010 had $360 million in annual revenues. The narrative pays particular attention to the early, turbulent years of the yogurt company and the excitement and uncertainty of entrepreneurial life. The case also details the supple, innovative marketing the company created to expand its customer base, the means it devised to cultivate and maintain customer loyalty, and the strategies it employed to penetrate the highly competitive yogurt and dairy categories nationwide. Throughout, readers will encounter the challenges that Hirshberg, his colleagues and his family confronted as they (all) worked to create a business with a firm commitment to both sustainability and high quality--a commitment rooted in Hirshberg's dedication to spreading the "gospel" of organic production to consumers.
Authors :: Nancy F. Koehn, Nora N. Khan, Elizabeth Legris
Swot Analysis of "Gary Hirshberg and Stonyfield Farm" written by Nancy F. Koehn, Nora N. Khan, Elizabeth Legris includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hirshberg Stonyfield facing as an external strategic factors. Some of the topics covered in Gary Hirshberg and Stonyfield Farm case study are - Strategic Management Strategies, Corporate governance, Entrepreneurship, Experimentation, Intellectual property, Organizational culture, Performance measurement, Social responsibility, Sustainability, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Gary Hirshberg and Stonyfield Farm casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Gary Hirshberg and Stonyfield Farm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gary Hirshberg and Stonyfield Farm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hirshberg Stonyfield, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hirshberg Stonyfield 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 Gary Hirshberg and Stonyfield Farm can be done for the following purposes –
1. Strategic planning using facts provided in Gary Hirshberg and Stonyfield Farm case study
2. Improving business portfolio management of Hirshberg Stonyfield
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hirshberg Stonyfield
Strengths Gary Hirshberg and Stonyfield Farm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hirshberg Stonyfield in Gary Hirshberg and Stonyfield Farm Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Hirshberg Stonyfield in the sector have low bargaining power. Gary Hirshberg and Stonyfield Farm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hirshberg Stonyfield to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Hirshberg Stonyfield is one of the most innovative firm in sector. Manager in Gary Hirshberg and Stonyfield Farm Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Gary Hirshberg and Stonyfield Farm 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.
High brand equity
– Hirshberg Stonyfield has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hirshberg Stonyfield to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Gary Hirshberg and Stonyfield Farm firm has clearly differentiated products in the market place. This has enabled Hirshberg Stonyfield to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Hirshberg Stonyfield to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Hirshberg Stonyfield 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.
Organizational Resilience of Hirshberg Stonyfield
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hirshberg Stonyfield does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Hirshberg Stonyfield 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 Nancy F. Koehn, Nora N. Khan, Elizabeth Legris 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.
Ability to recruit top talent
– Hirshberg Stonyfield is one of the leading recruiters in the industry. Managers in the Gary Hirshberg and Stonyfield Farm 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 Hirshberg Stonyfield 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.
Diverse revenue streams
– Hirshberg Stonyfield is present in almost all the verticals within the industry. This has provided firm in Gary Hirshberg and Stonyfield Farm 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.
Superior customer experience
– The customer experience strategy of Hirshberg Stonyfield in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Gary Hirshberg and Stonyfield Farm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gary Hirshberg and Stonyfield Farm are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Gary Hirshberg and Stonyfield Farm, is just above the industry average. Hirshberg Stonyfield 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hirshberg Stonyfield 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.
Low market penetration in new markets
– Outside its home market of Hirshberg Stonyfield, firm in the HBR case study Gary Hirshberg and Stonyfield Farm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Hirshberg Stonyfield is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Hirshberg Stonyfield needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hirshberg Stonyfield to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Gary Hirshberg and Stonyfield Farm 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 Gary Hirshberg and Stonyfield Farm can leverage the sales team experience to cultivate customer relationships as Hirshberg Stonyfield is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Gary Hirshberg and Stonyfield Farm, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Capital Spending Reduction
– Even during the low interest decade, Hirshberg Stonyfield has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gary Hirshberg and Stonyfield Farm, it seems that the employees of Hirshberg Stonyfield 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.
Products dominated business model
– Even though Hirshberg Stonyfield 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 - Gary Hirshberg and Stonyfield Farm should strive to include more intangible value offerings along with its core products and services.
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 Hirshberg Stonyfield supply chain. Even after few cautionary changes mentioned in the HBR case study - Gary Hirshberg and Stonyfield Farm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hirshberg Stonyfield vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Hirshberg Stonyfield 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.
Opportunities Gary Hirshberg and Stonyfield Farm | 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 Gary Hirshberg and Stonyfield Farm are -
Loyalty marketing
– Hirshberg Stonyfield 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hirshberg Stonyfield 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. Hirshberg Stonyfield 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.
Better consumer reach
– The expansion of the 5G network will help Hirshberg Stonyfield to increase its market reach. Hirshberg Stonyfield 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hirshberg Stonyfield 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hirshberg Stonyfield 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, Gary Hirshberg and Stonyfield Farm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Hirshberg Stonyfield 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hirshberg Stonyfield can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Hirshberg Stonyfield can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Hirshberg Stonyfield in the consumer business. Now Hirshberg Stonyfield can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Hirshberg Stonyfield 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.
Building a culture of innovation
– managers at Hirshberg Stonyfield 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 Innovation & Entrepreneurship segment.
Using analytics as competitive advantage
– Hirshberg Stonyfield 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 Gary Hirshberg and Stonyfield Farm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hirshberg Stonyfield to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hirshberg Stonyfield in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Threats Gary Hirshberg and Stonyfield Farm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gary Hirshberg and Stonyfield Farm are -
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. Hirshberg Stonyfield needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Consumer confidence and its impact on Hirshberg Stonyfield 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.
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. Hirshberg Stonyfield 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hirshberg Stonyfield 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 Gary Hirshberg and Stonyfield Farm .
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 Hirshberg Stonyfield.
Environmental challenges
– Hirshberg Stonyfield 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. Hirshberg Stonyfield can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Hirshberg Stonyfield in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hirshberg Stonyfield in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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.
Increasing wage structure of Hirshberg Stonyfield
– 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 Hirshberg Stonyfield.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gary Hirshberg and Stonyfield Farm, Hirshberg Stonyfield may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
High dependence on third party suppliers
– Hirshberg Stonyfield high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Hirshberg Stonyfield business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Gary Hirshberg and Stonyfield Farm 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 Gary Hirshberg and Stonyfield Farm 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 Gary Hirshberg and Stonyfield Farm 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 Gary Hirshberg and Stonyfield Farm 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 Gary Hirshberg and Stonyfield Farm 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 Hirshberg Stonyfield needs to make to build a sustainable competitive advantage.