Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International
This background note provides an overview of the U.S. wine industry and a history of Terlato Wines International. Data on market trends, key competitors, distribution channels and Terlato's segmentation and targeting for specific brands are included.
Authors :: Alice M. Tybout, Patrick Bennett, Brie Koenigs
Swot Analysis of "Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International" written by Alice M. Tybout, Patrick Bennett, Brie Koenigs includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Terlato Wines facing as an external strategic factors. Some of the topics covered in Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International case study are - Strategic Management Strategies, Pricing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
talent flight as more people leaving formal jobs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Terlato Wines, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Terlato Wines 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International can be done for the following purposes –
1. Strategic planning using facts provided in Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International case study
2. Improving business portfolio management of Terlato Wines
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 Terlato Wines
Strengths Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Terlato Wines in Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International Harvard Business Review case study are -
Successful track record of launching new products
– Terlato Wines has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Terlato Wines 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 switching costs
– The high switching costs that Terlato Wines 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.
Analytics focus
– Terlato Wines 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 Alice M. Tybout, Patrick Bennett, Brie Koenigs 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 Terlato Wines in the sector have low bargaining power. Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Terlato Wines to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Terlato Wines 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 Terlato Wines is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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
– Terlato Wines 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Terlato Wines has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Terlato Wines to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Terlato Wines 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Terlato Wines is one of the most innovative firm in sector. Manager in Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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
– Terlato Wines 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 Terlato Wines in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Terlato Wines digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Terlato Wines 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.
Weaknesses Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International are -
Slow to strategic competitive environment developments
– As Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International HBR case study mentions - Terlato Wines 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.
Skills based hiring
– The stress on hiring functional specialists at Terlato Wines 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.
Capital Spending Reduction
– Even during the low interest decade, Terlato Wines 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Terlato Wines is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Alice M. Tybout, Patrick Bennett, Brie Koenigs suggests that, Terlato Wines 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.
Aligning sales with marketing
– It come across in the case study Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International can leverage the sales team experience to cultivate customer relationships as Terlato Wines is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Terlato Wines 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. Terlato Wines 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Terlato Wines 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International, 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 cash cycle compare to competitors
Terlato Wines 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.
Products dominated business model
– Even though Terlato Wines 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 - Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International should strive to include more intangible value offerings along with its core products and services.
Opportunities Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International | 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Terlato Wines 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, Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International, 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. Terlato Wines 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. Terlato Wines 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.
Using analytics as competitive advantage
– Terlato Wines 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Terlato Wines to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Terlato Wines can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Terlato Wines 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.
Developing new processes and practices
– Terlato Wines 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.
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 Terlato Wines 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Terlato Wines 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 Terlato Wines to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Terlato Wines 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 Terlato Wines to increase its market reach. Terlato Wines 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Terlato Wines 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.
Manufacturing automation
– Terlato Wines 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Terlato Wines is facing challenges because of the dominance of functional experts in the organization. Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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.
Threats Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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. Terlato Wines can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Terlato Wines
– 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 Terlato Wines.
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. Terlato Wines 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.
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 Terlato Wines business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Terlato Wines with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International, Terlato Wines 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 .
Consumer confidence and its impact on Terlato Wines 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.
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 Terlato Wines.
Shortening product life cycle
– it is one of the major threat that Terlato Wines is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Terlato Wines 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Terlato Wines 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International .
Environmental challenges
– Terlato Wines 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. Terlato Wines can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International 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 Terlato Wines needs to make to build a sustainable competitive advantage.
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