Iggy's Bread of the World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Iggy's Bread of the World
In January 1994, Igor and Ludmilla Ivanovic opened the doors of their bakery, Iggy's Bread of the World. This case describes their unusual mission statement and the way in which they try to bring a social consciousness mentality to a for-profit business. Six years later, they have grown beyond their physical and administrative capacity. The Ivanovics must decide how to reconfigure the leadership structure of the company without losing their control over the fundamentals.
Swot Analysis of "Iggy's Bread of the World" written by Alexis Gendron, Kathleen L. McGinn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Iggy's Bread facing as an external strategic factors. Some of the topics covered in Iggy's Bread of the World case study are - Strategic Management Strategies, Influence, Organizational culture, Reorganization and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Iggy's Bread of the World casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, technology disruption, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Iggy's Bread of the World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Iggy's Bread of the World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Iggy's Bread, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Iggy's Bread 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 Iggy's Bread of the World can be done for the following purposes –
1. Strategic planning using facts provided in Iggy's Bread of the World case study
2. Improving business portfolio management of Iggy's Bread
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Iggy's Bread
Strengths Iggy's Bread of the World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Iggy's Bread in Iggy's Bread of the World Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Iggy's Bread of the World firm has clearly differentiated products in the market place. This has enabled Iggy's Bread to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Iggy's Bread to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Iggy's Bread has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Iggy's Bread 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.
Operational resilience
– The operational resilience strategy in the Iggy's Bread of the World 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.
Low bargaining power of suppliers
– Suppliers of Iggy's Bread in the sector have low bargaining power. Iggy's Bread of the World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Iggy's Bread to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Iggy's Bread is one of the leading recruiters in the industry. Managers in the Iggy's Bread of the World 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
– Iggy's Bread is one of the most innovative firm in sector. Manager in Iggy's Bread of the World Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Iggy's Bread 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 Iggy's Bread is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Iggy's Bread of the World Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Iggy's Bread
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Iggy's Bread does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Iggy's Bread has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Iggy's Bread of the World 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.
Strong track record of project management
– Iggy's Bread is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Iggy's Bread has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Iggy's Bread digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Iggy's Bread 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.
Weaknesses Iggy's Bread of the World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Iggy's Bread of the World are -
Aligning sales with marketing
– It come across in the case study Iggy's Bread of the World 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 Iggy's Bread of the World can leverage the sales team experience to cultivate customer relationships as Iggy's Bread is planning to shift buying processes online.
Interest costs
– Compare to the competition, Iggy's Bread 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.
Need for greater diversity
– Iggy's Bread 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.
Capital Spending Reduction
– Even during the low interest decade, Iggy's Bread 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.
Lack of clear differentiation of Iggy's Bread products
– To increase the profitability and margins on the products, Iggy's Bread needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Iggy's Bread has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Iggy's Bread even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 Iggy's Bread supply chain. Even after few cautionary changes mentioned in the HBR case study - Iggy's Bread of the World, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Iggy's Bread vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Iggy's Bread of the World, in the dynamic environment Iggy's Bread has struggled to respond to the nimble upstart competition. Iggy's Bread has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Iggy's Bread 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.
Slow to strategic competitive environment developments
– As Iggy's Bread of the World HBR case study mentions - Iggy's Bread takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Iggy's Bread is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Iggy's Bread needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Iggy's Bread to focus more on services rather than just following the product oriented approach.
Opportunities Iggy's Bread of the World | 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 Iggy's Bread of the World are -
Learning at scale
– Online learning technologies has now opened space for Iggy's Bread 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Iggy's Bread 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, Iggy's Bread of the World, 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. Iggy's Bread can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Iggy's Bread can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Iggy's Bread has opened avenues for new revenue streams for the organization in the industry. This can help Iggy's Bread to build a more holistic ecosystem as suggested in the Iggy's Bread of the World case study. Iggy's Bread can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Iggy's Bread can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Iggy's Bread 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Iggy's Bread 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 Iggy's Bread to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Iggy's Bread 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. Iggy's Bread 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, Iggy's Bread can use these opportunities to build new business models that can help the communities that Iggy's Bread operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Better consumer reach
– The expansion of the 5G network will help Iggy's Bread to increase its market reach. Iggy's Bread 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.
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 Iggy's Bread in the consumer business. Now Iggy's Bread can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Iggy's Bread can develop new processes and procedures in Leadership & Managing People 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 Iggy's Bread of the World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Iggy's Bread of the World are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Iggy's Bread of the World, Iggy's Bread may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Iggy's Bread 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Iggy's Bread with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Iggy's Bread is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Iggy's Bread needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Iggy's Bread 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.
Increasing wage structure of Iggy's Bread
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Iggy's Bread.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Iggy's Bread in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Iggy's Bread.
Consumer confidence and its impact on Iggy's Bread 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.
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 Iggy's Bread business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Iggy's Bread 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. Iggy's Bread can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Iggy's Bread of the World 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 Iggy's Bread of the World 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 Iggy's Bread of the World 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 Iggy's Bread of the World 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 Iggy's Bread of the World 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 Iggy's Bread needs to make to build a sustainable competitive advantage.