Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good
To maximize their effectiveness, color cases should be printed in color.James Musyoki, Lemmy Mutahi, and Ken Kariuki, all from East African Breweries Limited (EABL), a subsidiary of London-based Diageo, heard the disheartening news in the first week of December 2008. For the second time in six months, the Kenyan Finance Ministry had raised excise taxes on alcoholic beverages in an effort to plug the country's budget deficit; the bill was awaiting the President's signature. The price increase would put EABL's Allsops, Citizen, and President Beers out of the reach of their target markets, and Musyoki, Kariuki, and Mutahi hoped that the increase would not affect the excise-exempt Senator Keg lager - a lower-income brew which had created significant social and economic gains in Kenya since its launch in 2004. What would it take to save Senator Beer?
Swot Analysis of "Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good" written by Rosabeth Moss Kanter, Matthew Bird includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kariuki Musyoki facing as an external strategic factors. Some of the topics covered in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good case study are - Strategic Management Strategies, Innovation and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , increasing energy prices, geopolitical disruptions, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kariuki Musyoki, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kariuki Musyoki 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good can be done for the following purposes –
1. Strategic planning using facts provided in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good case study
2. Improving business portfolio management of Kariuki Musyoki
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 Kariuki Musyoki
Strengths Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kariuki Musyoki in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good Harvard Business Review case study are -
High brand equity
– Kariuki Musyoki has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kariuki Musyoki to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Kariuki Musyoki 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.
Analytics focus
– Kariuki Musyoki 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 Rosabeth Moss Kanter, Matthew Bird can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Leadership & Managing People field
– Kariuki Musyoki 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 Kariuki Musyoki in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Kariuki Musyoki is one of the leading recruiters in the industry. Managers in the Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Leadership & Managing People segment
- digital transformation varies from industry to industry. For Kariuki Musyoki digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kariuki Musyoki 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good firm has clearly differentiated products in the market place. This has enabled Kariuki Musyoki to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Kariuki Musyoki to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Kariuki Musyoki 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.
Diverse revenue streams
– Kariuki Musyoki is present in almost all the verticals within the industry. This has provided firm in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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.
Superior customer experience
– The customer experience strategy of Kariuki Musyoki in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Kariuki Musyoki is one of the most innovative firm in sector. Manager in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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.
Weaknesses Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good are -
Lack of clear differentiation of Kariuki Musyoki products
– To increase the profitability and margins on the products, Kariuki Musyoki needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Kariuki Musyoki 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, Rosabeth Moss Kanter, Matthew Bird suggests that, Kariuki Musyoki 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.
No frontier risks strategy
– After analyzing the HBR case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good, in the dynamic environment Kariuki Musyoki has struggled to respond to the nimble upstart competition. Kariuki Musyoki has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Kariuki Musyoki 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good can leverage the sales team experience to cultivate customer relationships as Kariuki Musyoki is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Kariuki Musyoki, firm in the HBR case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good HBR case study mentions - Kariuki Musyoki 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kariuki Musyoki 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good, is just above the industry average. Kariuki Musyoki needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good | 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good are -
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. Kariuki Musyoki 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. Kariuki Musyoki 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kariuki Musyoki is facing challenges because of the dominance of functional experts in the organization. Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kariuki Musyoki can use these opportunities to build new business models that can help the communities that Kariuki Musyoki operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kariuki Musyoki 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 Kariuki Musyoki to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Kariuki Musyoki 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.
Creating value in data economy
– The success of analytics program of Kariuki Musyoki has opened avenues for new revenue streams for the organization in the industry. This can help Kariuki Musyoki to build a more holistic ecosystem as suggested in the Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good case study. Kariuki Musyoki can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Kariuki Musyoki can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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.
Using analytics as competitive advantage
– Kariuki Musyoki has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kariuki Musyoki to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Kariuki Musyoki 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.
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. Kariuki Musyoki can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kariuki Musyoki 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
– Kariuki Musyoki 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.
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. Kariuki Musyoki can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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. Kariuki Musyoki can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Kariuki Musyoki
– 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 Kariuki Musyoki.
Consumer confidence and its impact on Kariuki Musyoki 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.
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.
Regulatory challenges
– Kariuki Musyoki 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 Kariuki Musyoki 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
– Kariuki Musyoki has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Kariuki Musyoki 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 Kariuki Musyoki with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Kariuki Musyoki 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.
Shortening product life cycle
– it is one of the major threat that Kariuki Musyoki is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Kariuki Musyoki 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. Kariuki Musyoki can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Kariuki Musyoki in the Leadership & Managing People sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Kariuki Musyoki 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.
Weighted SWOT Analysis of Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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 Kariuki Musyoki needs to make to build a sustainable competitive advantage.
