Georgian Glass and Mineral Water SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Georgian Glass and Mineral Water
This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.Georgian Glass and Mineral Water (GGMW), was created in 1995 by a Georgian entrepreneur and Western investors in Georgia (former Soviet Union) to bottle and market the famous mineral water from the Borjomi valley. At the height of the Soviet Union's power, Borjomi was Georgia's leading export product with 450 million half-liter bottles per year. During the early 1990s, however, Borjomi factories suffered underinvestment, theft, and neglect. GGMW's management needs to raise additional financing in order to fully capitalize on the market opportunity. Furthermore, management is faced with serious operating challenges in a newly privatized economy.
Swot Analysis of "Georgian Glass and Mineral Water" written by Walter Kuemmerle, Chad Ellis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Borjomi Mineral facing as an external strategic factors. Some of the topics covered in Georgian Glass and Mineral Water case study are - Strategic Management Strategies, Economy, Emerging markets, Entrepreneurial finance, Financial management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Georgian Glass and Mineral Water casestudy better are - – challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing commodity prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Georgian Glass and Mineral Water
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Georgian Glass and Mineral Water case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Borjomi Mineral, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Borjomi Mineral 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 Georgian Glass and Mineral Water can be done for the following purposes –
1. Strategic planning using facts provided in Georgian Glass and Mineral Water case study
2. Improving business portfolio management of Borjomi Mineral
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 Borjomi Mineral
Strengths Georgian Glass and Mineral Water | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Borjomi Mineral in Georgian Glass and Mineral Water Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Georgian Glass and Mineral Water firm has clearly differentiated products in the market place. This has enabled Borjomi Mineral to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Borjomi Mineral to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Borjomi Mineral in the sector have low bargaining power. Georgian Glass and Mineral Water has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Borjomi Mineral to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Borjomi Mineral 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.
Strong track record of project management
– Borjomi Mineral is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Borjomi Mineral 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 Georgian Glass and Mineral Water - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Borjomi Mineral 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 Walter Kuemmerle, Chad Ellis 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.
Innovation driven organization
– Borjomi Mineral is one of the most innovative firm in sector. Manager in Georgian Glass and Mineral Water Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Borjomi Mineral is one of the leading recruiters in the industry. Managers in the Georgian Glass and Mineral Water 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
– Borjomi Mineral has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Borjomi Mineral 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.
High brand equity
– Borjomi Mineral has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Borjomi Mineral to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Borjomi Mineral 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 Borjomi Mineral in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Borjomi Mineral 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 Georgian Glass and Mineral Water HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Georgian Glass and Mineral Water | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Georgian Glass and Mineral Water are -
Need for greater diversity
– Borjomi Mineral 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.
Aligning sales with marketing
– It come across in the case study Georgian Glass and Mineral Water 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 Georgian Glass and Mineral Water can leverage the sales team experience to cultivate customer relationships as Borjomi Mineral is planning to shift buying processes online.
High cash cycle compare to competitors
Borjomi Mineral 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.
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 Borjomi Mineral supply chain. Even after few cautionary changes mentioned in the HBR case study - Georgian Glass and Mineral Water, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Borjomi Mineral vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Georgian Glass and Mineral Water 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 Borjomi Mineral 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Walter Kuemmerle, Chad Ellis suggests that, Borjomi Mineral 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Borjomi Mineral 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.
Products dominated business model
– Even though Borjomi Mineral 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 - Georgian Glass and Mineral Water should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Borjomi Mineral products
– To increase the profitability and margins on the products, Borjomi Mineral needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Georgian Glass and Mineral Water 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 Borjomi Mineral has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Borjomi Mineral 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. Borjomi Mineral 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.
Opportunities Georgian Glass and Mineral Water | 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 Georgian Glass and Mineral Water are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Borjomi Mineral 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 Borjomi Mineral to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Borjomi Mineral can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Creating value in data economy
– The success of analytics program of Borjomi Mineral has opened avenues for new revenue streams for the organization in the industry. This can help Borjomi Mineral to build a more holistic ecosystem as suggested in the Georgian Glass and Mineral Water case study. Borjomi Mineral can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Borjomi Mineral can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Borjomi Mineral 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. Borjomi Mineral 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.
Using analytics as competitive advantage
– Borjomi Mineral 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 Georgian Glass and Mineral Water - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Borjomi Mineral to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Borjomi Mineral can use these opportunities to build new business models that can help the communities that Borjomi Mineral operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Borjomi Mineral can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Georgian Glass and Mineral Water 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.
Better consumer reach
– The expansion of the 5G network will help Borjomi Mineral to increase its market reach. Borjomi Mineral 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.
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 Borjomi Mineral in the consumer business. Now Borjomi Mineral 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 Borjomi Mineral 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.
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 Borjomi Mineral 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Borjomi Mineral 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, Georgian Glass and Mineral Water, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Georgian Glass and Mineral Water External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Georgian Glass and Mineral Water are -
Consumer confidence and its impact on Borjomi Mineral 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Georgian Glass and Mineral Water, Borjomi Mineral 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Borjomi Mineral 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 Georgian Glass and Mineral Water .
Technology acceleration in Forth Industrial Revolution
– Borjomi Mineral has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Borjomi Mineral needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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. Borjomi Mineral 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Borjomi Mineral 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.
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.
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 Borjomi Mineral.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Borjomi Mineral with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Borjomi Mineral 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 Innovation & Entrepreneurship industry regulations.
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 Borjomi Mineral business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Borjomi Mineral 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.
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 Borjomi Mineral in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Georgian Glass and Mineral Water 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 Georgian Glass and Mineral Water 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 Georgian Glass and Mineral Water 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 Georgian Glass and Mineral Water 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 Georgian Glass and Mineral Water 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 Borjomi Mineral needs to make to build a sustainable competitive advantage.
