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 government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, there is backlash against globalization, increasing commodity prices, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, 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 -
Effective Research and Development (R&D)
– Ggmw Fleury 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 Borjomi: Rebuilding a Brand Icon in Russia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
High switching costs
– The high switching costs that Ggmw Fleury 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.
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.
Strong track record of project management
– Ggmw Fleury is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ggmw Fleury digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ggmw Fleury 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.
Operational resilience
– The operational resilience strategy in the Borjomi: Rebuilding a Brand Icon in Russia 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.
Highly skilled collaborators
– Ggmw Fleury 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 Borjomi: Rebuilding a Brand Icon in Russia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Dominique Turpin, Mope Ogunsulire suggests that, Ggmw Fleury 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Borjomi: Rebuilding a Brand Icon in Russia 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 Ggmw Fleury 's lucrative customers.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ggmw Fleury 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.
Aligning sales with marketing
– It come across in the case study Borjomi: Rebuilding a Brand Icon in Russia 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 Borjomi: Rebuilding a Brand Icon in Russia can leverage the sales team experience to cultivate customer relationships as Ggmw Fleury is planning to shift buying processes online.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Ggmw Fleury is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ggmw Fleury needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ggmw Fleury to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Borjomi: Rebuilding a Brand Icon in Russia 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 Ggmw Fleury has relatively successful track record of launching new products.
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.
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 -
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.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ggmw Fleury 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, Borjomi: Rebuilding a Brand Icon in Russia, 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. Ggmw Fleury 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. Ggmw Fleury 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.
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.
Learning at scale
– Online learning technologies has now opened space for Ggmw Fleury 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.
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.
Leveraging digital technologies
– Ggmw Fleury 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.
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.
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 -
High dependence on third party suppliers
– Ggmw Fleury 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.
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.
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. Ggmw Fleury can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Ggmw Fleury is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Ggmw Fleury
– 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 Ggmw Fleury.
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 .
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 Ggmw Fleury.
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. Ggmw Fleury 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 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.
