SodaStream Takes on Coke and Pepsi SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SodaStream Takes on Coke and Pepsi
SodaStream International Limited is an Israel-based company that pioneered the home carbonation market. It sells soda makers that enable the consumer to prepare at home sparkling water or a variety of flavoured carbonated beverages. After its initial public offering in 2010, its chief executive officer sought to aggressively grow the company and set a $1 billion revenue target (from 2012 revenues of $436.32 million) by principally focusing on the U.S. market, the largest in the world for non-carbonated beverages. In addition to going up against global beverage behemoths, Coca-Cola Company and PepsiCo - whose advertising budgets alone are five to eight times SodaStream's revenues - SodaStream faces new competitors in Green Mountain Coffee Roasters and Primo Water Corporation, who pose a direct challenge to its ambitious goal. Author Ram Subramanian is affiliated with Montclair State University.
Swot Analysis of "SodaStream Takes on Coke and Pepsi" written by Ram Subramanian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sodastream Carbonated facing as an external strategic factors. Some of the topics covered in SodaStream Takes on Coke and Pepsi case study are - Strategic Management Strategies, Disruptive innovation and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the SodaStream Takes on Coke and Pepsi casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
Introduction to SWOT Analysis of SodaStream Takes on Coke and Pepsi
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SodaStream Takes on Coke and Pepsi case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sodastream Carbonated, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sodastream Carbonated 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 SodaStream Takes on Coke and Pepsi can be done for the following purposes –
1. Strategic planning using facts provided in SodaStream Takes on Coke and Pepsi case study
2. Improving business portfolio management of Sodastream Carbonated
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 Sodastream Carbonated
Strengths SodaStream Takes on Coke and Pepsi | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sodastream Carbonated in SodaStream Takes on Coke and Pepsi Harvard Business Review case study are -
Training and development
– Sodastream Carbonated has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SodaStream Takes on Coke and Pepsi 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.
Ability to recruit top talent
– Sodastream Carbonated is one of the leading recruiters in the industry. Managers in the SodaStream Takes on Coke and Pepsi are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Sodastream Carbonated 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 SodaStream Takes on Coke and Pepsi - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Sodastream Carbonated in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Sodastream Carbonated is one of the most innovative firm in sector. Manager in SodaStream Takes on Coke and Pepsi Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Sodastream Carbonated 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 Ram Subramanian 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.
Organizational Resilience of Sodastream Carbonated
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sodastream Carbonated does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– SodaStream Takes on Coke and Pepsi firm has clearly differentiated products in the market place. This has enabled Sodastream Carbonated to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sodastream Carbonated to invest into research and development (R&D) and innovation.
Learning organization
- Sodastream Carbonated 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 Sodastream Carbonated is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SodaStream Takes on Coke and Pepsi Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Sodastream Carbonated 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.
High brand equity
– Sodastream Carbonated has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sodastream Carbonated to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Sodastream Carbonated 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 SodaStream Takes on Coke and Pepsi HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses SodaStream Takes on Coke and Pepsi | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SodaStream Takes on Coke and Pepsi are -
High cash cycle compare to competitors
Sodastream Carbonated 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.
Lack of clear differentiation of Sodastream Carbonated products
– To increase the profitability and margins on the products, Sodastream Carbonated needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Sodastream Carbonated 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 - SodaStream Takes on Coke and Pepsi should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Ram Subramanian suggests that, Sodastream Carbonated 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.
Aligning sales with marketing
– It come across in the case study SodaStream Takes on Coke and Pepsi 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 SodaStream Takes on Coke and Pepsi can leverage the sales team experience to cultivate customer relationships as Sodastream Carbonated is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Sodastream Carbonated 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sodastream Carbonated is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SodaStream Takes on Coke and Pepsi can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Sodastream Carbonated, firm in the HBR case study SodaStream Takes on Coke and Pepsi needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study SodaStream Takes on Coke and Pepsi, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Capital Spending Reduction
– Even during the low interest decade, Sodastream Carbonated 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.
Increasing silos among functional specialists
– The organizational structure of Sodastream Carbonated is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Sodastream Carbonated needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sodastream Carbonated to focus more on services rather than just following the product oriented approach.
Opportunities SodaStream Takes on Coke and Pepsi | 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 SodaStream Takes on Coke and Pepsi are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Sodastream Carbonated 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
– Sodastream Carbonated 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.
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 Sodastream Carbonated 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.
Buying journey improvements
– Sodastream Carbonated can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SodaStream Takes on Coke and Pepsi 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sodastream Carbonated 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, SodaStream Takes on Coke and Pepsi, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Sodastream Carbonated to increase its market reach. Sodastream Carbonated 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.
Developing new processes and practices
– Sodastream Carbonated 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sodastream Carbonated is facing challenges because of the dominance of functional experts in the organization. SodaStream Takes on Coke and Pepsi 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sodastream Carbonated can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Sodastream Carbonated can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Sodastream Carbonated 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sodastream Carbonated in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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. Sodastream Carbonated 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. Sodastream Carbonated 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.
Threats SodaStream Takes on Coke and Pepsi External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SodaStream Takes on Coke and Pepsi are -
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.
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 Sodastream Carbonated.
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. Sodastream Carbonated 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sodastream Carbonated 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 SodaStream Takes on Coke and Pepsi .
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 Sodastream Carbonated business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sodastream Carbonated 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.
Consumer confidence and its impact on Sodastream Carbonated 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SodaStream Takes on Coke and Pepsi, Sodastream Carbonated 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 .
High dependence on third party suppliers
– Sodastream Carbonated 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sodastream Carbonated with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Sodastream Carbonated 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 Sodastream Carbonated
– 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 Sodastream Carbonated.
Environmental challenges
– Sodastream Carbonated 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. Sodastream Carbonated can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of SodaStream Takes on Coke and Pepsi 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 SodaStream Takes on Coke and Pepsi 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 SodaStream Takes on Coke and Pepsi 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 SodaStream Takes on Coke and Pepsi 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 SodaStream Takes on Coke and Pepsi 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 Sodastream Carbonated needs to make to build a sustainable competitive advantage.
