Borjomi: Rebuilding a Brand Icon in Russia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Borjomi: Rebuilding a Brand Icon in Russia
Borjomi is one of Russia's oldest, best-known and well-loved mineral waters. After going through a steep decline at the end of the Soviet era, the brand was bought by Georgian Glass & Mineral Water (GGMW) in 1995. Two years later, GGMW hired Frenchman Jacques Fleury-he turned the company around, and in 2001 had restored Borjomi to its former glory. In 2002, GGMW was bought by venture capital firm, Salford. Together with Fleury, Salford partner, Vladimir Ashurov, led a further transformation of the company turning it from a local, almost family-run company into a professional corporate enterprise, and growing annual sales from $25 to $125 million, and from 54 to 366 million liters. Their achievement did not go unnoticed. In 2005, GGMW received two offers from two multinationals to either sell the business, or create a partnership. But Fleury and Ashurov believe there is still significant room for growth. Indeed, that they can grow revenues further to $320 million (without acquisitions) in 3-4 years, of which $155 million will come from Russia alone. The rest would come from Ukraine and other markets. This case focuses on Russia where GGMW has a three-product portfolio. Fleury and his team are now asking themselves whether, to achieve that growth, GGMW should use all three, or rationalize its portfolio and focus on Borjomi Classic, its flagship product?
Swot Analysis of "Borjomi: Rebuilding a Brand Icon in Russia" written by Dominique Turpin, Mope Ogunsulire includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ggmw Fleury facing as an external strategic factors. Some of the topics covered in Borjomi: Rebuilding a Brand Icon in Russia case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Borjomi: Rebuilding a Brand Icon in Russia casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, technology disruption, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is backlash against globalization,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Borjomi: Rebuilding a Brand Icon in Russia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Borjomi: Rebuilding a Brand Icon in Russia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ggmw Fleury, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ggmw Fleury 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 Borjomi: Rebuilding a Brand Icon in Russia can be done for the following purposes –
1. Strategic planning using facts provided in Borjomi: Rebuilding a Brand Icon in Russia case study
2. Improving business portfolio management of Ggmw Fleury
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 Ggmw Fleury
Strengths Borjomi: Rebuilding a Brand Icon in Russia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ggmw Fleury in Borjomi: Rebuilding a Brand Icon in Russia Harvard Business Review case study are -
Innovation driven organization
– Ggmw Fleury is one of the most innovative firm in sector. Manager in Borjomi: Rebuilding a Brand Icon in Russia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Ggmw Fleury 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 Ggmw Fleury in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Ggmw Fleury 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 Dominique Turpin, Mope Ogunsulire 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 Ggmw Fleury in the sector have low bargaining power. Borjomi: Rebuilding a Brand Icon in Russia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ggmw Fleury to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Ggmw Fleury
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ggmw Fleury does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Ggmw Fleury has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Borjomi: Rebuilding a Brand Icon in Russia 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.
Learning organization
- Ggmw Fleury 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 Ggmw Fleury is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Borjomi: Rebuilding a Brand Icon in Russia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Ggmw Fleury 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.
Successful track record of launching new products
– Ggmw Fleury has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ggmw Fleury 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.
High brand equity
– Ggmw Fleury has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ggmw Fleury to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Leadership & Managing People industry
– Borjomi: Rebuilding a Brand Icon in Russia firm has clearly differentiated products in the market place. This has enabled Ggmw Fleury to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ggmw Fleury to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Ggmw Fleury is one of the leading recruiters in the industry. Managers in the Borjomi: Rebuilding a Brand Icon in Russia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Borjomi: Rebuilding a Brand Icon in Russia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Borjomi: Rebuilding a Brand Icon in Russia are -
Lack of clear differentiation of Ggmw Fleury products
– To increase the profitability and margins on the products, Ggmw Fleury needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Ggmw Fleury, firm in the HBR case study Borjomi: Rebuilding a Brand Icon in Russia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Borjomi: Rebuilding a Brand Icon in Russia, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Borjomi: Rebuilding a Brand Icon in Russia, is just above the industry average. Ggmw Fleury 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Borjomi: Rebuilding a Brand Icon in Russia, in the dynamic environment Ggmw Fleury has struggled to respond to the nimble upstart competition. Ggmw Fleury 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
– Ggmw Fleury 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.
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 Ggmw Fleury supply chain. Even after few cautionary changes mentioned in the HBR case study - Borjomi: Rebuilding a Brand Icon in Russia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ggmw Fleury vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Ggmw Fleury has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Borjomi: Rebuilding a Brand Icon in Russia, it seems that the employees of Ggmw Fleury 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.
Capital Spending Reduction
– Even during the low interest decade, Ggmw Fleury 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.
Slow to strategic competitive environment developments
– As Borjomi: Rebuilding a Brand Icon in Russia HBR case study mentions - Ggmw Fleury 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.
Opportunities Borjomi: Rebuilding a Brand Icon in Russia | 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 Borjomi: Rebuilding a Brand Icon in Russia are -
Manufacturing automation
– Ggmw Fleury 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ggmw Fleury 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.
Better consumer reach
– The expansion of the 5G network will help Ggmw Fleury to increase its market reach. Ggmw Fleury 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.
Building a culture of innovation
– managers at Ggmw Fleury 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ggmw Fleury is facing challenges because of the dominance of functional experts in the organization. Borjomi: Rebuilding a Brand Icon in Russia case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Ggmw Fleury can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Borjomi: Rebuilding a Brand Icon in Russia 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
– Ggmw Fleury 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.
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 Ggmw Fleury in the consumer business. Now Ggmw Fleury can target international markets with far fewer capital restrictions requirements than the existing system.
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 Ggmw Fleury 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ggmw Fleury 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.
Creating value in data economy
– The success of analytics program of Ggmw Fleury has opened avenues for new revenue streams for the organization in the industry. This can help Ggmw Fleury to build a more holistic ecosystem as suggested in the Borjomi: Rebuilding a Brand Icon in Russia case study. Ggmw Fleury can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Ggmw Fleury 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ggmw Fleury 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 Ggmw Fleury to hire the very best people irrespective of their geographical location.
Threats Borjomi: Rebuilding a Brand Icon in Russia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Borjomi: Rebuilding a Brand Icon in Russia are -
Technology acceleration in Forth Industrial Revolution
– Ggmw Fleury has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ggmw Fleury 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 Ggmw Fleury with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Ggmw Fleury 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.
Consumer confidence and its impact on Ggmw Fleury 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.
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.
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. Ggmw Fleury 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.
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 Ggmw Fleury in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Ggmw Fleury 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.
Environmental challenges
– Ggmw Fleury 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. Ggmw Fleury can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ggmw Fleury 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 Borjomi: Rebuilding a Brand Icon in Russia .
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.
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 Ggmw Fleury business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ggmw Fleury 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.
Weighted SWOT Analysis of Borjomi: Rebuilding a Brand Icon in Russia 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 Borjomi: Rebuilding a Brand Icon in Russia 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 Borjomi: Rebuilding a Brand Icon in Russia 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 Borjomi: Rebuilding a Brand Icon in Russia 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 Borjomi: Rebuilding a Brand Icon in Russia 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 Ggmw Fleury needs to make to build a sustainable competitive advantage.