The Michelin Restaurant Guide: Charting a New Course SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Michelin Restaurant Guide: Charting a New Course
Created in 1900 by the tire manufacturer Michelin, the Michelin Restaurant Guide was widely considered the international benchmark of food rating, and, by 2013, boasted paper editions in 23 countries, and had recently expanded to the United States and Asia. Paper sales however had dropped, following the emergence of free, online guides, global players, and more broadly, the wider diffusion of the Internet. In 2012, the Guide had launched a new range of services targeting restaurateurs. The Director of the Guide was contemplating developing the Guide even more internationally and on digital formats, but also knew he needed to limit costs.
Authors :: Mukti Khaire, Elena Corsi, Jerome Lenhardt
Swot Analysis of "The Michelin Restaurant Guide: Charting a New Course" written by Mukti Khaire, Elena Corsi, Jerome Lenhardt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Guide Michelin facing as an external strategic factors. Some of the topics covered in The Michelin Restaurant Guide: Charting a New Course case study are - Strategic Management Strategies, Business models, Entrepreneurial management, Growth strategy, Organizational culture, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Michelin Restaurant Guide: Charting a New Course casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, wage bills are increasing,
increasing transportation and logistics costs, increasing energy prices, etc
Introduction to SWOT Analysis of The Michelin Restaurant Guide: Charting a New Course
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Michelin Restaurant Guide: Charting a New Course case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guide Michelin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guide Michelin 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 The Michelin Restaurant Guide: Charting a New Course can be done for the following purposes –
1. Strategic planning using facts provided in The Michelin Restaurant Guide: Charting a New Course case study
2. Improving business portfolio management of Guide Michelin
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 Guide Michelin
Strengths The Michelin Restaurant Guide: Charting a New Course | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guide Michelin in The Michelin Restaurant Guide: Charting a New Course Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Guide Michelin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guide Michelin 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.
Superior customer experience
– The customer experience strategy of Guide Michelin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Guide Michelin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Michelin Restaurant Guide: Charting a New Course 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.
Low bargaining power of suppliers
– Suppliers of Guide Michelin in the sector have low bargaining power. The Michelin Restaurant Guide: Charting a New Course has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guide Michelin to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Guide Michelin is one of the leading recruiters in the industry. Managers in the The Michelin Restaurant Guide: Charting a New Course are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– The Michelin Restaurant Guide: Charting a New Course firm has clearly differentiated products in the market place. This has enabled Guide Michelin to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Guide Michelin to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Guide Michelin 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.
Ability to lead change in Innovation & Entrepreneurship field
– Guide Michelin 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 Guide Michelin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Guide Michelin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guide Michelin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Guide Michelin is one of the most innovative firm in sector. Manager in The Michelin Restaurant Guide: Charting a New Course 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 The Michelin Restaurant Guide: Charting a New Course 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.
Highly skilled collaborators
– Guide Michelin 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 The Michelin Restaurant Guide: Charting a New Course HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses The Michelin Restaurant Guide: Charting a New Course | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Michelin Restaurant Guide: Charting a New Course are -
High operating costs
– Compare to the competitors, firm in the HBR case study The Michelin Restaurant Guide: Charting a New Course 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 Guide Michelin 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Guide Michelin is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Guide Michelin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guide Michelin to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Guide Michelin 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.
Aligning sales with marketing
– It come across in the case study The Michelin Restaurant Guide: Charting a New Course 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 The Michelin Restaurant Guide: Charting a New Course can leverage the sales team experience to cultivate customer relationships as Guide Michelin is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Michelin Restaurant Guide: Charting a New Course, it seems that the employees of Guide Michelin 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.
No frontier risks strategy
– After analyzing the HBR case study The Michelin Restaurant Guide: Charting a New Course, 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, Guide Michelin 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.
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 Guide Michelin supply chain. Even after few cautionary changes mentioned in the HBR case study - The Michelin Restaurant Guide: Charting a New Course, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guide Michelin vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Guide Michelin 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. Guide Michelin 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.
Lack of clear differentiation of Guide Michelin products
– To increase the profitability and margins on the products, Guide Michelin needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Guide Michelin 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.
Opportunities The Michelin Restaurant Guide: Charting a New Course | 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 The Michelin Restaurant Guide: Charting a New Course are -
Learning at scale
– Online learning technologies has now opened space for Guide Michelin 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.
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. Guide Michelin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Guide Michelin 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. Guide Michelin 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
– Guide Michelin 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 The Michelin Restaurant Guide: Charting a New Course - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guide Michelin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Guide Michelin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Michelin Restaurant Guide: Charting a New Course 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.
Developing new processes and practices
– Guide Michelin can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Guide Michelin 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, The Michelin Restaurant Guide: Charting a New Course, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guide Michelin is facing challenges because of the dominance of functional experts in the organization. The Michelin Restaurant Guide: Charting a New Course 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guide Michelin can use these opportunities to build new business models that can help the communities that Guide Michelin operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guide Michelin 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 Guide Michelin to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Guide Michelin 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.
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 Guide Michelin in the consumer business. Now Guide Michelin can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Guide Michelin has opened avenues for new revenue streams for the organization in the industry. This can help Guide Michelin to build a more holistic ecosystem as suggested in the The Michelin Restaurant Guide: Charting a New Course case study. Guide Michelin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats The Michelin Restaurant Guide: Charting a New Course External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Michelin Restaurant Guide: Charting a New Course are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Guide Michelin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Guide Michelin 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.
Technology acceleration in Forth Industrial Revolution
– Guide Michelin has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Guide Michelin 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guide Michelin 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 The Michelin Restaurant Guide: Charting a New Course .
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.
Stagnating economy with rate increase
– Guide Michelin 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.
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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guide Michelin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Guide Michelin 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.
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 Guide Michelin.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Michelin Restaurant Guide: Charting a New Course, Guide Michelin 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 .
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 Guide Michelin business can come under increasing regulations regarding data privacy, data security, etc.
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. Guide Michelin needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of The Michelin Restaurant Guide: Charting a New Course 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 The Michelin Restaurant Guide: Charting a New Course 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 The Michelin Restaurant Guide: Charting a New Course 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 The Michelin Restaurant Guide: Charting a New Course 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 The Michelin Restaurant Guide: Charting a New Course 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 Guide Michelin needs to make to build a sustainable competitive advantage.
