The Chocolate Factory (B): 'Sold for 20p' SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Chocolate Factory (B): 'Sold for 20p'
Part 2 "Sold for 20p" analyses the many governance challenges the Cadburys faced. From their merger with the troubled Fry's in 1918, which significantly enlarged the number of family owners, the transfer of their ownership to charity foundations, the motivation and long-term consequences of listing the firm in 1962, a strategic merger with Schweppes in 1969 and forced demerger in 2008, and the family's exit with the hostile takeover by Kraft in 2010, it offers valuable lessons in how family firms can use ownership design to mitigate business and family roadblocks, and how dilution of ownership can have unforeseen consequences and ultimately leave the family firm vulnerable to predators.
Swot Analysis of "The Chocolate Factory (B): 'Sold for 20p'" written by Morten Bennedsen, Deborah Cadbury includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 20p Family facing as an external strategic factors. Some of the topics covered in The Chocolate Factory (B): 'Sold for 20p' case study are - Strategic Management Strategies, Mergers & acquisitions, Organizational culture, Social responsibility and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Chocolate Factory (B): 'Sold for 20p' casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of The Chocolate Factory (B): 'Sold for 20p'
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Chocolate Factory (B): 'Sold for 20p' case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 20p Family, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 20p Family 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 Chocolate Factory (B): 'Sold for 20p' can be done for the following purposes –
1. Strategic planning using facts provided in The Chocolate Factory (B): 'Sold for 20p' case study
2. Improving business portfolio management of 20p Family
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 20p Family
Strengths The Chocolate Factory (B): 'Sold for 20p' | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 20p Family in The Chocolate Factory (B): 'Sold for 20p' Harvard Business Review case study are -
Diverse revenue streams
– 20p Family is present in almost all the verticals within the industry. This has provided firm in The Chocolate Factory (B): 'Sold for 20p' 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.
Highly skilled collaborators
– 20p Family 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 Chocolate Factory (B): 'Sold for 20p' HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Innovation & Entrepreneurship field
– 20p Family 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 20p Family in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– The Chocolate Factory (B): 'Sold for 20p' firm has clearly differentiated products in the market place. This has enabled 20p Family to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped 20p Family to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– 20p Family is one of the leading recruiters in the industry. Managers in the The Chocolate Factory (B): 'Sold for 20p' 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
– 20p Family is one of the most innovative firm in sector. Manager in The Chocolate Factory (B): 'Sold for 20p' Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of 20p Family
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 20p Family does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– 20p Family has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Chocolate Factory (B): 'Sold for 20p' 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For 20p Family digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. 20p Family 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.
Low bargaining power of suppliers
– Suppliers of 20p Family in the sector have low bargaining power. The Chocolate Factory (B): 'Sold for 20p' has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 20p Family to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of 20p Family in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– 20p Family is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses The Chocolate Factory (B): 'Sold for 20p' | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Chocolate Factory (B): 'Sold for 20p' are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, 20p Family is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Chocolate Factory (B): 'Sold for 20p' can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Chocolate Factory (B): 'Sold for 20p' 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 20p Family has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study The Chocolate Factory (B): 'Sold for 20p', 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.
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 20p Family supply chain. Even after few cautionary changes mentioned in the HBR case study - The Chocolate Factory (B): 'Sold for 20p', it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left 20p Family vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Morten Bennedsen, Deborah Cadbury suggests that, 20p Family 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Chocolate Factory (B): 'Sold for 20p', is just above the industry average. 20p Family 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 cash cycle compare to competitors
20p Family 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.
Low market penetration in new markets
– Outside its home market of 20p Family, firm in the HBR case study The Chocolate Factory (B): 'Sold for 20p' needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at 20p Family 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Chocolate Factory (B): 'Sold for 20p' 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 20p Family 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Chocolate Factory (B): 'Sold for 20p', it seems that the employees of 20p Family 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 The Chocolate Factory (B): 'Sold for 20p' | 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 Chocolate Factory (B): 'Sold for 20p' are -
Creating value in data economy
– The success of analytics program of 20p Family has opened avenues for new revenue streams for the organization in the industry. This can help 20p Family to build a more holistic ecosystem as suggested in the The Chocolate Factory (B): 'Sold for 20p' case study. 20p Family can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– 20p Family can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Chocolate Factory (B): 'Sold for 20p' 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.
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 20p Family in the consumer business. Now 20p Family can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– 20p Family 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.
Building a culture of innovation
– managers at 20p Family can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Better consumer reach
– The expansion of the 5G network will help 20p Family to increase its market reach. 20p Family 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 20p Family is facing challenges because of the dominance of functional experts in the organization. The Chocolate Factory (B): 'Sold for 20p' 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.
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. 20p Family can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help 20p Family to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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. 20p Family can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, 20p Family can use these opportunities to build new business models that can help the communities that 20p Family operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 20p Family 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 Chocolate Factory (B): 'Sold for 20p', to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for 20p Family 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 The Chocolate Factory (B): 'Sold for 20p' External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Chocolate Factory (B): 'Sold for 20p' are -
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. 20p Family needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Environmental challenges
– 20p Family 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. 20p Family can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Regulatory challenges
– 20p Family 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 20p Family 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 20p Family 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.
Stagnating economy with rate increase
– 20p Family can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for 20p Family in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
High dependence on third party suppliers
– 20p Family 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.
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. 20p Family can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 20p Family business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that 20p Family is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 20p Family 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 Chocolate Factory (B): 'Sold for 20p' .
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.
Weighted SWOT Analysis of The Chocolate Factory (B): 'Sold for 20p' 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 Chocolate Factory (B): 'Sold for 20p' 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 Chocolate Factory (B): 'Sold for 20p' 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 Chocolate Factory (B): 'Sold for 20p' 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 Chocolate Factory (B): 'Sold for 20p' 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 20p Family needs to make to build a sustainable competitive advantage.
