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 - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing energy prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
Diverse revenue streams
– Juice Outlet is present in almost all the verticals within the industry. This has provided firm in Sombrero: Proposed Fruit Juice Outlet 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.
Effective Research and Development (R&D)
– Juice Outlet 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 Sombrero: Proposed Fruit Juice Outlet - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Juice Outlet
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Juice Outlet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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.
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 -
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.
Low market penetration in new markets
– Outside its home market of Juice Outlet, firm in the HBR case study Sombrero: Proposed Fruit Juice Outlet needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Juice Outlet supply chain. Even after few cautionary changes mentioned in the HBR case study - Sombrero: Proposed Fruit Juice Outlet, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Juice Outlet vulnerable to further global disruptions in South East Asia.
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.
Products dominated business model
– Even though Juice Outlet 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 - Sombrero: Proposed Fruit Juice Outlet should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Juice Outlet products
– To increase the profitability and margins on the products, Juice Outlet needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High cash cycle compare to competitors
Juice Outlet 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sombrero: Proposed Fruit Juice Outlet, it seems that the employees of Juice Outlet 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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Juice Outlet can use these opportunities to build new business models that can help the communities that Juice Outlet operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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.
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.
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. Juice Outlet 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. Juice Outlet 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Juice Outlet 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.
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.
Better consumer reach
– The expansion of the 5G network will help Juice Outlet to increase its market reach. Juice Outlet 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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Juice Outlet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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 -
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 .
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.
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.
High dependence on third party suppliers
– Juice Outlet 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Juice Outlet 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.
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.
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.
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.
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.
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.
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.
Regulatory challenges
– Juice Outlet 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.
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.