H.J. Heinz Co.: The Administration of Policy (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of H.J. Heinz Co.: The Administration of Policy (A)
Relates the April 1979 discovery of improper income transferal practices used at the H.J. Heinz Co. Background data on the company is presented, along with a detailed description of the organizational practices, the management incentive system, and the corporate ethical policy then in use. Also contains an organization chart and financial data for the 1972-78 fiscal years.
Swot Analysis of "H.J. Heinz Co.: The Administration of Policy (A)" written by Kenneth E. Goodpaster, Richard J. Post includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that H.j Heinz facing as an external strategic factors. Some of the topics covered in H.J. Heinz Co.: The Administration of Policy (A) case study are - Strategic Management Strategies, Boards, Business processes, Compensation, Ethics, Government, Motivating people, Organizational structure, Social responsibility and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the H.J. Heinz Co.: The Administration of Policy (A) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, technology disruption, wage bills are increasing, increasing commodity prices, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of H.J. Heinz Co.: The Administration of Policy (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in H.J. Heinz Co.: The Administration of Policy (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the H.j Heinz, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which H.j Heinz 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 H.J. Heinz Co.: The Administration of Policy (A) can be done for the following purposes –
1. Strategic planning using facts provided in H.J. Heinz Co.: The Administration of Policy (A) case study
2. Improving business portfolio management of H.j Heinz
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 H.j Heinz
Strengths H.J. Heinz Co.: The Administration of Policy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of H.j Heinz in H.J. Heinz Co.: The Administration of Policy (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of H.j Heinz in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that H.j Heinz 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
– H.j Heinz is present in almost all the verticals within the industry. This has provided firm in H.J. Heinz Co.: The Administration of Policy (A) 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For H.j Heinz digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. H.j Heinz 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.
Successful track record of launching new products
– H.j Heinz has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. H.j Heinz 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.
Organizational Resilience of H.j Heinz
– The covid-19 pandemic has put organizational resilience at the centre of everthing that H.j Heinz does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the H.j Heinz 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.
Innovation driven organization
– H.j Heinz is one of the most innovative firm in sector. Manager in H.J. Heinz Co.: The Administration of Policy (A) 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
– H.j Heinz has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in H.J. Heinz Co.: The Administration of Policy (A) 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.
Effective Research and Development (R&D)
– H.j Heinz 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 H.J. Heinz Co.: The Administration of Policy (A) - 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
– H.j Heinz 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 H.j Heinz in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– H.j Heinz has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled H.j Heinz to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses H.J. Heinz Co.: The Administration of Policy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of H.J. Heinz Co.: The Administration of Policy (A) are -
Slow decision making process
– As mentioned earlier in the report, H.j Heinz 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. H.j Heinz 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.
No frontier risks strategy
– After analyzing the HBR case study H.J. Heinz Co.: The Administration of Policy (A), 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth E. Goodpaster, Richard J. Post suggests that, H.j Heinz 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study H.J. Heinz Co.: The Administration of Policy (A), in the dynamic environment H.j Heinz has struggled to respond to the nimble upstart competition. H.j Heinz has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though H.j Heinz 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 - H.J. Heinz Co.: The Administration of Policy (A) should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at H.j Heinz 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.
Lack of clear differentiation of H.j Heinz products
– To increase the profitability and margins on the products, H.j Heinz needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
H.j Heinz 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study H.J. Heinz Co.: The Administration of Policy (A), is just above the industry average. H.j Heinz 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the H.J. Heinz Co.: The Administration of Policy (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though H.j Heinz has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study H.J. Heinz Co.: The Administration of Policy (A) 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 H.j Heinz 's lucrative customers.
Opportunities H.J. Heinz Co.: The Administration of Policy (A) | 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 H.J. Heinz Co.: The Administration of Policy (A) 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, H.j Heinz can use these opportunities to build new business models that can help the communities that H.j Heinz operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for H.j Heinz 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, H.j Heinz 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for H.j Heinz 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.
Manufacturing automation
– H.j Heinz can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– H.j Heinz 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, H.j Heinz is facing challenges because of the dominance of functional experts in the organization. H.J. Heinz Co.: The Administration of Policy (A) 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.
Creating value in data economy
– The success of analytics program of H.j Heinz has opened avenues for new revenue streams for the organization in the industry. This can help H.j Heinz to build a more holistic ecosystem as suggested in the H.J. Heinz Co.: The Administration of Policy (A) case study. H.j Heinz can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, H.j Heinz 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, H.J. Heinz Co.: The Administration of Policy (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. H.j Heinz 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. H.j Heinz 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.
Buying journey improvements
– H.j Heinz can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. H.J. Heinz Co.: The Administration of Policy (A) 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.
Developing new processes and practices
– H.j Heinz 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.
Building a culture of innovation
– managers at H.j Heinz can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Threats H.J. Heinz Co.: The Administration of Policy (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study H.J. Heinz Co.: The Administration of Policy (A) 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. H.j Heinz can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents H.j Heinz with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– H.j Heinz 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.
Environmental challenges
– H.j Heinz 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. H.j Heinz can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– H.j Heinz 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.
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 H.j Heinz.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, H.j Heinz 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 H.J. Heinz Co.: The Administration of Policy (A) .
Shortening product life cycle
– it is one of the major threat that H.j Heinz is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Increasing wage structure of H.j Heinz
– 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 H.j Heinz.
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. H.j Heinz 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.
Consumer confidence and its impact on H.j Heinz 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.
Weighted SWOT Analysis of H.J. Heinz Co.: The Administration of Policy (A) 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 H.J. Heinz Co.: The Administration of Policy (A) 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 H.J. Heinz Co.: The Administration of Policy (A) 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 H.J. Heinz Co.: The Administration of Policy (A) 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 H.J. Heinz Co.: The Administration of Policy (A) 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 H.j Heinz needs to make to build a sustainable competitive advantage.