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 - – there is increasing trade war between United States & China, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, 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 -
Effective Research and Development (R&D)
– Kariuki Musyoki 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to 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.
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.
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.
Training and development
– Kariuki Musyoki has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Kariuki Musyoki in the sector have low bargaining power. Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kariuki Musyoki to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Kariuki Musyoki is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Kariuki Musyoki has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kariuki Musyoki 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.
Learning organization
- Kariuki Musyoki 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 Kariuki Musyoki is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 -
Products dominated business model
– Even though Kariuki Musyoki 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 - Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good, it seems that the employees of Kariuki Musyoki 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.
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.
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.
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.
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 Kariuki Musyoki supply chain. Even after few cautionary changes mentioned in the HBR case study - Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kariuki Musyoki vulnerable to further global disruptions in South East Asia.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Kariuki Musyoki has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kariuki Musyoki is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good 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
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.
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 -
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.
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.
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.
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 Kariuki Musyoki 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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Kariuki Musyoki to increase its market reach. Kariuki Musyoki 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.
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.
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 Kariuki Musyoki in the consumer business. Now Kariuki Musyoki can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kariuki Musyoki 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 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.
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.
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 -
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kariuki Musyoki 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 Diageo and East African Breweries Ltd.: Tapping New Markets for Social Good .
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.
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.
Stagnating economy with rate increase
– Kariuki Musyoki 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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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 Kariuki Musyoki business can come under increasing regulations regarding data privacy, data security, 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. Kariuki Musyoki needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.