Case Study Description of Stonyfield Farm: September 1994
Samuel Kaymen and Gary Hirshberg founded Stonyfield Farm in 1983, in part to demonstrate that "environmentally and socially responsible businesses can also be profitable." In 1994, the company has grown to over $21 million in revenues, derived mainly from refrigerated and frozen yogurt. It has expanded beyond its core New England base to natural food stores nationwide and to supermarkets in 20 states. All its production, however, is concentrated in its New Hampshire plant, which has limited the company's growth on the West Coast. Now Stonyfield has to decide whether to build a plant in California. It has also entered a joint venture agreement to make ice cream in Russia. It faces competitive challenges in its traditional markets as well.
Swot Analysis of "Stonyfield Farm: September 1994" written by Amar V. Bhide, Mark Thurber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stonyfield Farm facing as an external strategic factors. Some of the topics covered in Stonyfield Farm: September 1994 case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Organizational structure and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Stonyfield Farm: September 1994 casestudy better are - – there is backlash against globalization, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
increasing commodity prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Stonyfield Farm: September 1994
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stonyfield Farm: September 1994 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stonyfield Farm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stonyfield Farm 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 Stonyfield Farm: September 1994 can be done for the following purposes –
1. Strategic planning using facts provided in Stonyfield Farm: September 1994 case study
2. Improving business portfolio management of Stonyfield Farm
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 Stonyfield Farm
Strengths Stonyfield Farm: September 1994 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stonyfield Farm in Stonyfield Farm: September 1994 Harvard Business Review case study are -
Learning organization
- Stonyfield Farm 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 Stonyfield Farm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stonyfield Farm: September 1994 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Stonyfield Farm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Stonyfield Farm: September 1994 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.
Organizational Resilience of Stonyfield Farm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stonyfield Farm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Stonyfield Farm is present in almost all the verticals within the industry. This has provided firm in Stonyfield Farm: September 1994 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.
Successful track record of launching new products
– Stonyfield Farm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stonyfield Farm 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.
Effective Research and Development (R&D)
– Stonyfield Farm 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 Stonyfield Farm: September 1994 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Stonyfield Farm is one of the leading recruiters in the industry. Managers in the Stonyfield Farm: September 1994 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Stonyfield Farm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stonyfield Farm 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.
High switching costs
– The high switching costs that Stonyfield Farm 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Stonyfield Farm: September 1994 firm has clearly differentiated products in the market place. This has enabled Stonyfield Farm to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Stonyfield Farm to invest into research and development (R&D) and innovation.
Innovation driven organization
– Stonyfield Farm is one of the most innovative firm in sector. Manager in Stonyfield Farm: September 1994 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Innovation & Entrepreneurship field
– Stonyfield Farm 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 Stonyfield Farm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Stonyfield Farm: September 1994 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stonyfield Farm: September 1994 are -
Lack of clear differentiation of Stonyfield Farm products
– To increase the profitability and margins on the products, Stonyfield Farm needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Stonyfield Farm 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Amar V. Bhide, Mark Thurber suggests that, Stonyfield Farm 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.
Products dominated business model
– Even though Stonyfield Farm 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 - Stonyfield Farm: September 1994 should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Stonyfield Farm 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.
Aligning sales with marketing
– It come across in the case study Stonyfield Farm: September 1994 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 Stonyfield Farm: September 1994 can leverage the sales team experience to cultivate customer relationships as Stonyfield Farm is planning to shift buying processes online.
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 Stonyfield Farm supply chain. Even after few cautionary changes mentioned in the HBR case study - Stonyfield Farm: September 1994, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Stonyfield Farm vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Stonyfield Farm needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Stonyfield Farm: September 1994 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 Stonyfield Farm has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Stonyfield Farm 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stonyfield Farm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Stonyfield Farm: September 1994 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Stonyfield Farm: September 1994 | 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 Stonyfield Farm: September 1994 are -
Building a culture of innovation
– managers at Stonyfield Farm 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.
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. Stonyfield Farm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Stonyfield Farm to increase its market reach. Stonyfield Farm 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.
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. Stonyfield Farm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stonyfield Farm 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 Stonyfield Farm 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. Stonyfield Farm 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. Stonyfield Farm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stonyfield Farm 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, Stonyfield Farm: September 1994, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Stonyfield Farm 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.
Leveraging digital technologies
– Stonyfield Farm 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stonyfield Farm can use these opportunities to build new business models that can help the communities that Stonyfield Farm operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Creating value in data economy
– The success of analytics program of Stonyfield Farm has opened avenues for new revenue streams for the organization in the industry. This can help Stonyfield Farm to build a more holistic ecosystem as suggested in the Stonyfield Farm: September 1994 case study. Stonyfield Farm 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 Stonyfield Farm in the consumer business. Now Stonyfield Farm can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Stonyfield Farm is facing challenges because of the dominance of functional experts in the organization. Stonyfield Farm: September 1994 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.
Threats Stonyfield Farm: September 1994 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Stonyfield Farm: September 1994 are -
Environmental challenges
– Stonyfield Farm 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. Stonyfield Farm can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Stonyfield Farm needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Regulatory challenges
– Stonyfield Farm 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.
Consumer confidence and its impact on Stonyfield Farm demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology 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.
Stagnating economy with rate increase
– Stonyfield Farm 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 Stonyfield Farm 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.
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 Stonyfield Farm business can come under increasing regulations regarding data privacy, data security, etc.
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.
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. Stonyfield Farm 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.
High dependence on third party suppliers
– Stonyfield Farm 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.
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 Stonyfield Farm.
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 Stonyfield Farm in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Stonyfield Farm: September 1994 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 Stonyfield Farm: September 1994 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 Stonyfield Farm: September 1994 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 Stonyfield Farm: September 1994 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 Stonyfield Farm: September 1994 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 Stonyfield Farm needs to make to build a sustainable competitive advantage.
