Case Study Description of Growing Pains at Commonwealth Dairy
The Growing Pains at Commonwealth Dairy case provides an interesting situation to explore the challenges faced by a fast-growth company and the potential ways to address these challenges. Specifically, Commonwealth Dairy (CD) faces challenges that may be categorized along the following dimensions: a) how to continue the rapid pace of growth, b) how to manage the administrative challenges which the two founding managers faced, brought on by growth and the establishment of a second location of operations, c) how to manage the changing roles of the co-founders and the increasing need for more formal management systems and processes, and d) how to manage the changing nature of the co-founders' relationship with their primary investor from Germany. The co-founders face some key decisions regarding the future of CD in terms of its growth trajectory, the CD organization's ability to sustain its entrepreneurial energy and values in light of explosive growth, the relationship between CD and their primary investor Ehrmann, and finally, the co-founders' personal aspirations and roles.
Swot Analysis of "Growing Pains at Commonwealth Dairy" written by Peter Cohan, Sam Hariharan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cd Commonwealth facing as an external strategic factors. Some of the topics covered in Growing Pains at Commonwealth Dairy case study are - Strategic Management Strategies, Product development, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Growing Pains at Commonwealth Dairy casestudy better are - – challanges to central banks by blockchain based private currencies, wage bills are increasing, central banks are concerned over increasing inflation, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing energy prices,
geopolitical disruptions, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Growing Pains at Commonwealth Dairy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Growing Pains at Commonwealth Dairy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cd Commonwealth, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cd Commonwealth 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 Growing Pains at Commonwealth Dairy can be done for the following purposes –
1. Strategic planning using facts provided in Growing Pains at Commonwealth Dairy case study
2. Improving business portfolio management of Cd Commonwealth
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 Cd Commonwealth
Strengths Growing Pains at Commonwealth Dairy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cd Commonwealth in Growing Pains at Commonwealth Dairy Harvard Business Review case study are -
Analytics focus
– Cd Commonwealth 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 Peter Cohan, Sam Hariharan 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.
Effective Research and Development (R&D)
– Cd Commonwealth 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 Growing Pains at Commonwealth Dairy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Cd Commonwealth 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 Growing Pains at Commonwealth Dairy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Cd Commonwealth is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cd Commonwealth is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Growing Pains at Commonwealth Dairy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Cd Commonwealth 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.
Operational resilience
– The operational resilience strategy in the Growing Pains at Commonwealth Dairy 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Growing Pains at Commonwealth Dairy firm has clearly differentiated products in the market place. This has enabled Cd Commonwealth to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Cd Commonwealth to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Cd Commonwealth is present in almost all the verticals within the industry. This has provided firm in Growing Pains at Commonwealth Dairy 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.
Organizational Resilience of Cd Commonwealth
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cd Commonwealth does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Innovation & Entrepreneurship field
– Cd Commonwealth 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 Cd Commonwealth in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Cd Commonwealth has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cd Commonwealth to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Cd Commonwealth has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cd Commonwealth 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.
Weaknesses Growing Pains at Commonwealth Dairy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Growing Pains at Commonwealth Dairy are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Growing Pains at Commonwealth Dairy 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 Cd Commonwealth has relatively successful track record of launching new products.
Products dominated business model
– Even though Cd Commonwealth 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 - Growing Pains at Commonwealth Dairy should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Cd Commonwealth 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cd Commonwealth is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Growing Pains at Commonwealth Dairy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Cd Commonwealth products
– To increase the profitability and margins on the products, Cd Commonwealth needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Cd Commonwealth is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Cd Commonwealth needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cd Commonwealth to focus more on services rather than just following the product oriented approach.
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 Cd Commonwealth supply chain. Even after few cautionary changes mentioned in the HBR case study - Growing Pains at Commonwealth Dairy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cd Commonwealth vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Peter Cohan, Sam Hariharan suggests that, Cd Commonwealth 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Growing Pains at Commonwealth Dairy, it seems that the employees of Cd Commonwealth 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Growing Pains at Commonwealth Dairy, is just above the industry average. Cd Commonwealth 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.
Capital Spending Reduction
– Even during the low interest decade, Cd Commonwealth 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.
Opportunities Growing Pains at Commonwealth Dairy | 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 Growing Pains at Commonwealth Dairy are -
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. Cd Commonwealth can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cd Commonwealth can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Cd Commonwealth 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.
Learning at scale
– Online learning technologies has now opened space for Cd Commonwealth 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 Cd Commonwealth to increase its market reach. Cd Commonwealth 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cd Commonwealth 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.
Buying journey improvements
– Cd Commonwealth can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Growing Pains at Commonwealth Dairy 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.
Creating value in data economy
– The success of analytics program of Cd Commonwealth has opened avenues for new revenue streams for the organization in the industry. This can help Cd Commonwealth to build a more holistic ecosystem as suggested in the Growing Pains at Commonwealth Dairy case study. Cd Commonwealth can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Cd Commonwealth in the consumer business. Now Cd Commonwealth can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cd Commonwealth 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 Cd Commonwealth to hire the very best people irrespective of their geographical location.
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. Cd Commonwealth 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. Cd Commonwealth 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cd Commonwealth can use these opportunities to build new business models that can help the communities that Cd Commonwealth operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Cd Commonwealth can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Growing Pains at Commonwealth Dairy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Growing Pains at Commonwealth Dairy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cd Commonwealth 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 Growing Pains at Commonwealth Dairy .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cd Commonwealth 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.
Consumer confidence and its impact on Cd Commonwealth 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.
Regulatory challenges
– Cd Commonwealth 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.
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 Cd Commonwealth in the Innovation & Entrepreneurship sector and impact the bottomline 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 Cd Commonwealth.
Environmental challenges
– Cd Commonwealth 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. Cd Commonwealth can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Shortening product life cycle
– it is one of the major threat that Cd Commonwealth is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Cd Commonwealth has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Cd Commonwealth 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Growing Pains at Commonwealth Dairy, Cd Commonwealth 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cd Commonwealth with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Cd Commonwealth 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.
Weighted SWOT Analysis of Growing Pains at Commonwealth Dairy 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 Growing Pains at Commonwealth Dairy 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 Growing Pains at Commonwealth Dairy 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 Growing Pains at Commonwealth Dairy 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 Growing Pains at Commonwealth Dairy 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 Cd Commonwealth needs to make to build a sustainable competitive advantage.
