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 - – geopolitical disruptions, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
increasing energy prices, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
Ability to lead change in Leadership & Managing People field
– Sodastream Carbonated 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 Sodastream Carbonated in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the SodaStream Takes on Coke and Pepsi 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.
Successful track record of launching new products
– Sodastream Carbonated has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sodastream Carbonated 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.
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.
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.
Diverse revenue streams
– Sodastream Carbonated is present in almost all the verticals within the industry. This has provided firm in SodaStream Takes on Coke and Pepsi 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.
Low bargaining power of suppliers
– Suppliers of Sodastream Carbonated in the sector have low bargaining power. SodaStream Takes on Coke and Pepsi has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sodastream Carbonated to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
Slow decision making process
– As mentioned earlier in the report, Sodastream Carbonated 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. Sodastream Carbonated 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.
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.
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 Sodastream Carbonated supply chain. Even after few cautionary changes mentioned in the HBR case study - SodaStream Takes on Coke and Pepsi, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sodastream Carbonated vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
Interest costs
– Compare to the competition, Sodastream Carbonated 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SodaStream Takes on Coke and Pepsi, it seems that the employees of Sodastream Carbonated 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.
Skills based hiring
– The stress on hiring functional specialists at Sodastream Carbonated has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study SodaStream Takes on Coke and Pepsi 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 Sodastream Carbonated 's lucrative customers.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sodastream Carbonated can use these opportunities to build new business models that can help the communities that Sodastream Carbonated operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
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 Sodastream Carbonated in the consumer business. Now Sodastream Carbonated 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, 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.
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.
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.
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.
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.
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.
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.
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.
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.
Loyalty marketing
– Sodastream Carbonated 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.
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 -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sodastream Carbonated can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Sodastream Carbonated needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
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.
Regulatory challenges
– Sodastream Carbonated 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 Leadership & Managing People industry regulations.
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.
Technology acceleration in Forth Industrial Revolution
– Sodastream Carbonated has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Sodastream Carbonated needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
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 .
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.
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 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.