Henry Heinz: Making Markets for Processed Foods SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Henry Heinz: Making Markets for Processed Foods
Outlines many of the supply-side innovations, such as improved transportation, communication, and technological developments, that greatly expanded the productive capacity of the United States in the late 19th century. Explores a range of demand-side shifts, including rising incomes, population growth, and urbanization, that changed consumers' wants and needs. These developments, taken together with those on the supply side, altered the nature of the American economy, ushering in widespread industrialization, markets of unprecedented size, and consumption on an entirely new scale. Investigates how, within this context, H.J. Heinz created a successful food-processing business in the last three decades of the 19th century.
Swot Analysis of "Henry Heinz: Making Markets for Processed Foods" written by Nancy F. Koehn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Heinz 19th facing as an external strategic factors. Some of the topics covered in Henry Heinz: Making Markets for Processed Foods case study are - Strategic Management Strategies, Customers, Entrepreneurship, Innovation, Leadership and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Henry Heinz: Making Markets for Processed Foods casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, geopolitical disruptions, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Henry Heinz: Making Markets for Processed Foods
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Henry Heinz: Making Markets for Processed Foods case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Heinz 19th, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Heinz 19th 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 Henry Heinz: Making Markets for Processed Foods can be done for the following purposes –
1. Strategic planning using facts provided in Henry Heinz: Making Markets for Processed Foods case study
2. Improving business portfolio management of Heinz 19th
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 Heinz 19th
Strengths Henry Heinz: Making Markets for Processed Foods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Heinz 19th in Henry Heinz: Making Markets for Processed Foods Harvard Business Review case study are -
High switching costs
– The high switching costs that Heinz 19th 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.
Superior customer experience
– The customer experience strategy of Heinz 19th in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– Henry Heinz: Making Markets for Processed Foods firm has clearly differentiated products in the market place. This has enabled Heinz 19th to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Heinz 19th to invest into research and development (R&D) and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Heinz 19th digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Heinz 19th 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.
Learning organization
- Heinz 19th 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 Heinz 19th is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Henry Heinz: Making Markets for Processed Foods Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Heinz 19th has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Henry Heinz: Making Markets for Processed Foods HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Heinz 19th has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Heinz 19th to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Heinz 19th 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 Nancy F. Koehn 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.
Training and development
– Heinz 19th has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Henry Heinz: Making Markets for Processed Foods Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Leadership & Managing People field
– Heinz 19th 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 Heinz 19th 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 Henry Heinz: Making Markets for Processed Foods 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
– Heinz 19th has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Heinz 19th 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.
Weaknesses Henry Heinz: Making Markets for Processed Foods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Henry Heinz: Making Markets for Processed Foods are -
Need for greater diversity
– Heinz 19th 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 Henry Heinz: Making Markets for Processed Foods 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 Henry Heinz: Making Markets for Processed Foods can leverage the sales team experience to cultivate customer relationships as Heinz 19th is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Heinz 19th has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Henry Heinz: Making Markets for Processed Foods, in the dynamic environment Heinz 19th has struggled to respond to the nimble upstart competition. Heinz 19th has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Heinz 19th is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Heinz 19th needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Heinz 19th to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Henry Heinz: Making Markets for Processed Foods 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 Heinz 19th 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Henry Heinz: Making Markets for Processed Foods, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Henry Heinz: Making Markets for Processed Foods, it seems that the employees of Heinz 19th 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.
Lack of clear differentiation of Heinz 19th products
– To increase the profitability and margins on the products, Heinz 19th needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Heinz 19th 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.
Slow decision making process
– As mentioned earlier in the report, Heinz 19th 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. Heinz 19th 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.
Opportunities Henry Heinz: Making Markets for Processed Foods | 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 Henry Heinz: Making Markets for Processed Foods are -
Creating value in data economy
– The success of analytics program of Heinz 19th has opened avenues for new revenue streams for the organization in the industry. This can help Heinz 19th to build a more holistic ecosystem as suggested in the Henry Heinz: Making Markets for Processed Foods case study. Heinz 19th can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Heinz 19th to increase its market reach. Heinz 19th 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.
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. Heinz 19th can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Heinz 19th 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 Henry Heinz: Making Markets for Processed Foods - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Heinz 19th 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 Heinz 19th 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.
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 Heinz 19th 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Heinz 19th can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Heinz 19th 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.
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. Heinz 19th 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. Heinz 19th 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Heinz 19th 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 Heinz 19th to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Heinz 19th 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.
Building a culture of innovation
– managers at Heinz 19th 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.
Leveraging digital technologies
– Heinz 19th 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.
Threats Henry Heinz: Making Markets for Processed Foods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Henry Heinz: Making Markets for Processed Foods are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Henry Heinz: Making Markets for Processed Foods, Heinz 19th 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 .
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 Heinz 19th.
Increasing wage structure of Heinz 19th
– 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 Heinz 19th.
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. Heinz 19th needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Heinz 19th 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.
Environmental challenges
– Heinz 19th 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. Heinz 19th can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Heinz 19th 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 Henry Heinz: Making Markets for Processed Foods .
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 Heinz 19th business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Heinz 19th 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.
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. Heinz 19th can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Heinz 19th 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.
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 Heinz 19th in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Henry Heinz: Making Markets for Processed Foods 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 Henry Heinz: Making Markets for Processed Foods 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 Henry Heinz: Making Markets for Processed Foods 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 Henry Heinz: Making Markets for Processed Foods 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 Henry Heinz: Making Markets for Processed Foods 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 Heinz 19th needs to make to build a sustainable competitive advantage.
