Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version
This is a condensed version of the Handpresso case series #5841. It describes the development from concept to production of the world's first and smallest hand-held espresso machine. It explains the design process and how the product is brought to market. The CEO of Nielsen Innovation, Henrik Nielsen, decides not to license it as he has with other designs but to create a spin-off company for the Handpresso machine. The final chapter finds the team in a quandary, Henrik Nielsen's untimely death leaves his wife at the helm. With two new machines ready for launch within a couple of months, it describes how the product is brought to market through partnerships and alliances. Having made a conscious decision to take this route, an agreement is signed with leading coffee roaster Lavazza, who in turn negotiates an exclusive agreement with the auto giant Fiat.
Authors :: Henrich R. Greve, Manuel E. Sosa, Anne-Marie Carrick
Swot Analysis of "Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version" written by Henrich R. Greve, Manuel E. Sosa, Anne-Marie Carrick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Handpresso Henrik facing as an external strategic factors. Some of the topics covered in Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version case study are - Strategic Management Strategies, Intellectual property, Joint ventures and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version casestudy better are - – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing energy prices, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, wage bills are increasing, etc
Introduction to SWOT Analysis of Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Handpresso Henrik, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Handpresso Henrik 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version can be done for the following purposes –
1. Strategic planning using facts provided in Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version case study
2. Improving business portfolio management of Handpresso Henrik
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 Handpresso Henrik
Strengths Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Handpresso Henrik in Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Handpresso Henrik digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Handpresso Henrik has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Handpresso Henrik in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Handpresso Henrik are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Handpresso Henrik 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Handpresso Henrik is present in almost all the verticals within the industry. This has provided firm in Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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.
High brand equity
– Handpresso Henrik has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Handpresso Henrik to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Handpresso Henrik
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Handpresso Henrik does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Handpresso Henrik 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.
Innovation driven organization
– Handpresso Henrik is one of the most innovative firm in sector. Manager in Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Handpresso Henrik 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 Henrich R. Greve, Manuel E. Sosa, Anne-Marie Carrick 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.
Ability to lead change in Innovation & Entrepreneurship field
– Handpresso Henrik 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 Handpresso Henrik in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Handpresso Henrik is one of the leading recruiters in the industry. Managers in the Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Handpresso Henrik is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 cash cycle compare to competitors
Handpresso Henrik 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version, in the dynamic environment Handpresso Henrik has struggled to respond to the nimble upstart competition. Handpresso Henrik has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso Henrik 's lucrative customers.
Need for greater diversity
– Handpresso Henrik 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version, it seems that the employees of Handpresso Henrik 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.
Aligning sales with marketing
– It come across in the case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version can leverage the sales team experience to cultivate customer relationships as Handpresso Henrik is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Handpresso Henrik 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.
Products dominated business model
– Even though Handpresso Henrik 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 - Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version, is just above the industry average. Handpresso Henrik 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 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 Handpresso Henrik supply chain. Even after few cautionary changes mentioned in the HBR case study - Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Handpresso Henrik vulnerable to further global disruptions in South East Asia.
Opportunities Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version | 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Handpresso Henrik 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, Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Handpresso Henrik can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Handpresso Henrik 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.
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. Handpresso Henrik 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. Handpresso Henrik 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.
Building a culture of innovation
– managers at Handpresso Henrik 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 Handpresso Henrik to increase its market reach. Handpresso Henrik 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.
Buying journey improvements
– Handpresso Henrik can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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.
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. Handpresso Henrik can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Handpresso Henrik 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.
Learning at scale
– Online learning technologies has now opened space for Handpresso Henrik 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.
Using analytics as competitive advantage
– Handpresso Henrik 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Handpresso Henrik to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Handpresso Henrik 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 Handpresso Henrik to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Handpresso Henrik 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.
Threats Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version are -
Shortening product life cycle
– it is one of the major threat that Handpresso Henrik is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version, Handpresso Henrik 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 .
Technology acceleration in Forth Industrial Revolution
– Handpresso Henrik has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Handpresso Henrik 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.
Consumer confidence and its impact on Handpresso Henrik 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.
Environmental challenges
– Handpresso Henrik 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. Handpresso Henrik 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. Handpresso Henrik can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Handpresso Henrik 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.
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.
Stagnating economy with rate increase
– Handpresso Henrik 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Handpresso Henrik 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.
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.
Regulatory challenges
– Handpresso Henrik 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.
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 Handpresso Henrik.
Weighted SWOT Analysis of Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso: From an Innovative Idea to an Alliance Portfolio - Condensed Version 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 Handpresso Henrik needs to make to build a sustainable competitive advantage.
