Sombrero: Proposed Fruit Juice Outlet SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sombrero: Proposed Fruit Juice Outlet
This is part of the subset of Ivey cases and technical notes written for Introductory-Level courses.An entrepreneur must decide whether to proceed with the business plan for his startup business. This mini case exercise presents all startup costs to open a fruit juice outlet in a mall in Al Ain, Abu Dhabi Emirate, United Arab Emirates.
Swot Analysis of "Sombrero: Proposed Fruit Juice Outlet" written by John McLellan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Juice Outlet facing as an external strategic factors. Some of the topics covered in Sombrero: Proposed Fruit Juice Outlet case study are - Strategic Management Strategies, Entrepreneurship, Financial analysis, Sales and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Sombrero: Proposed Fruit Juice Outlet casestudy better are - – digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is backlash against globalization, geopolitical disruptions, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Sombrero: Proposed Fruit Juice Outlet
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sombrero: Proposed Fruit Juice Outlet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Juice Outlet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet can be done for the following purposes –
1. Strategic planning using facts provided in Sombrero: Proposed Fruit Juice Outlet case study
2. Improving business portfolio management of Juice Outlet
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 Juice Outlet
Strengths Sombrero: Proposed Fruit Juice Outlet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Juice Outlet in Sombrero: Proposed Fruit Juice Outlet Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Juice Outlet in the sector have low bargaining power. Sombrero: Proposed Fruit Juice Outlet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Juice Outlet to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Juice Outlet is one of the leading recruiters in the industry. Managers in the Sombrero: Proposed Fruit Juice Outlet are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Juice Outlet is one of the most innovative firm in sector. Manager in Sombrero: Proposed Fruit Juice Outlet Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Juice Outlet in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Juice Outlet 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Juice Outlet digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Juice Outlet has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Juice Outlet 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 John McLellan 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.
Successful track record of launching new products
– Juice Outlet has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Juice Outlet 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.
Training and development
– Juice Outlet has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sombrero: Proposed Fruit Juice Outlet 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.
Highly skilled collaborators
– Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Sombrero: Proposed Fruit Juice Outlet firm has clearly differentiated products in the market place. This has enabled Juice Outlet to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Juice Outlet to invest into research and development (R&D) and innovation.
Ability to lead change in Innovation & Entrepreneurship field
– Juice Outlet 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 Juice Outlet in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Sombrero: Proposed Fruit Juice Outlet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sombrero: Proposed Fruit Juice Outlet are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Juice Outlet is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sombrero: Proposed Fruit Juice Outlet can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Juice Outlet has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Sombrero: Proposed Fruit Juice Outlet, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sombrero: Proposed Fruit Juice Outlet, is just above the industry average. Juice Outlet 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sombrero: Proposed Fruit Juice Outlet 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 Juice Outlet 's lucrative customers.
Interest costs
– Compare to the competition, Juice Outlet 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.
Need for greater diversity
– Juice Outlet 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.
Slow to strategic competitive environment developments
– As Sombrero: Proposed Fruit Juice Outlet HBR case study mentions - Juice Outlet 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.
Aligning sales with marketing
– It come across in the case study Sombrero: Proposed Fruit Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet can leverage the sales team experience to cultivate customer relationships as Juice Outlet is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Juice Outlet 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John McLellan suggests that, Juice Outlet 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.
Opportunities Sombrero: Proposed Fruit Juice Outlet | 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 Sombrero: Proposed Fruit Juice Outlet are -
Leveraging digital technologies
– Juice Outlet can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Juice Outlet 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Juice Outlet 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 Juice Outlet to hire the very best people irrespective of their geographical location.
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 Juice Outlet in the consumer business. Now Juice Outlet can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Juice Outlet 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, Juice Outlet 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, Sombrero: Proposed Fruit Juice Outlet, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Juice Outlet 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.
Manufacturing automation
– Juice Outlet 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.
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. Juice Outlet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Juice Outlet to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Juice Outlet is facing challenges because of the dominance of functional experts in the organization. Sombrero: Proposed Fruit Juice Outlet 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.
Creating value in data economy
– The success of analytics program of Juice Outlet has opened avenues for new revenue streams for the organization in the industry. This can help Juice Outlet to build a more holistic ecosystem as suggested in the Sombrero: Proposed Fruit Juice Outlet case study. Juice Outlet can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Juice Outlet 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.
Threats Sombrero: Proposed Fruit Juice Outlet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sombrero: Proposed Fruit Juice Outlet are -
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 Juice Outlet business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Juice Outlet
– 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 Juice Outlet.
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. Juice Outlet 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.
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 Juice Outlet in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sombrero: Proposed Fruit Juice Outlet, Juice Outlet 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 .
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 Juice Outlet.
Environmental challenges
– Juice Outlet 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. Juice Outlet can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Juice Outlet needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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. Juice Outlet can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Juice Outlet 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.
Shortening product life cycle
– it is one of the major threat that Juice Outlet is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Juice Outlet 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.
Technology acceleration in Forth Industrial Revolution
– Juice Outlet has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Juice Outlet 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.
Weighted SWOT Analysis of Sombrero: Proposed Fruit Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet 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 Juice Outlet needs to make to build a sustainable competitive advantage.
