Case Study Description of Appellation Shanxi: Grace Vineyard
Grace Vineyard was a rare family-owned, private winery in China that was set on establishing itself as a world-renowned, quality vintner. Judy Leissner, the second generation company leader was at a crossroads in how she wanted to grow the business that her father founded in 1997. Their wines were rapidly growing a strong following and had won international awards. How could the company capitalize on this success? Should Grace expand its operations to multiple Chinese provinces? Should Grace continue as a premium boutique winery serving a growing but ultimately limited niche market in China, or should it seek to make a mark internationally? Or should Grace respond to buy-out offers?
Authors :: William C. Kirby, Michael Shih-ta Chen, Keith Chi-ho Wong
Swot Analysis of "Appellation Shanxi: Grace Vineyard" written by William C. Kirby, Michael Shih-ta Chen, Keith Chi-ho Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Grace Vineyard facing as an external strategic factors. Some of the topics covered in Appellation Shanxi: Grace Vineyard case study are - Strategic Management Strategies, Product development and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Appellation Shanxi: Grace Vineyard casestudy better are - – geopolitical disruptions, increasing commodity prices, central banks are concerned over increasing inflation, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Appellation Shanxi: Grace Vineyard
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Appellation Shanxi: Grace Vineyard case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Grace Vineyard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Grace Vineyard 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 Appellation Shanxi: Grace Vineyard can be done for the following purposes –
1. Strategic planning using facts provided in Appellation Shanxi: Grace Vineyard case study
2. Improving business portfolio management of Grace Vineyard
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 Grace Vineyard
Strengths Appellation Shanxi: Grace Vineyard | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Grace Vineyard in Appellation Shanxi: Grace Vineyard Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Grace Vineyard 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.
Highly skilled collaborators
– Grace Vineyard 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 Appellation Shanxi: Grace Vineyard HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Grace Vineyard 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 Grace Vineyard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Appellation Shanxi: Grace Vineyard Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Grace Vineyard 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 Grace Vineyard in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Grace Vineyard 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 William C. Kirby, Michael Shih-ta Chen, Keith Chi-ho Wong 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.
Superior customer experience
– The customer experience strategy of Grace Vineyard in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Grace Vineyard is present in almost all the verticals within the industry. This has provided firm in Appellation Shanxi: Grace Vineyard case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Grace Vineyard in the sector have low bargaining power. Appellation Shanxi: Grace Vineyard has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Grace Vineyard to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Grace Vineyard is one of the most innovative firm in sector. Manager in Appellation Shanxi: Grace Vineyard Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Grace Vineyard has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Appellation Shanxi: Grace Vineyard 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.
Successful track record of launching new products
– Grace Vineyard has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Grace Vineyard 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
– Grace Vineyard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Grace Vineyard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Appellation Shanxi: Grace Vineyard | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Appellation Shanxi: Grace Vineyard are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Appellation Shanxi: Grace Vineyard, it seems that the employees of Grace Vineyard 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Grace Vineyard 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.
No frontier risks strategy
– After analyzing the HBR case study Appellation Shanxi: Grace Vineyard, 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.
Slow decision making process
– As mentioned earlier in the report, Grace Vineyard 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. Grace Vineyard 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Grace Vineyard is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Appellation Shanxi: Grace Vineyard can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Grace Vineyard, firm in the HBR case study Appellation Shanxi: Grace Vineyard needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Grace Vineyard 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 cash cycle compare to competitors
Grace Vineyard 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.
High bargaining power of channel partners
– Because of the regulatory requirements, William C. Kirby, Michael Shih-ta Chen, Keith Chi-ho Wong suggests that, Grace Vineyard 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.
Skills based hiring
– The stress on hiring functional specialists at Grace Vineyard 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, Grace Vineyard 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.
Opportunities Appellation Shanxi: Grace Vineyard | 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 Appellation Shanxi: Grace Vineyard are -
Buying journey improvements
– Grace Vineyard can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Appellation Shanxi: Grace Vineyard 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.
Learning at scale
– Online learning technologies has now opened space for Grace Vineyard 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.
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. Grace Vineyard can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Grace Vineyard to increase its market reach. Grace Vineyard 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.
Manufacturing automation
– Grace Vineyard 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.
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. Grace Vineyard 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. Grace Vineyard 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Grace Vineyard is facing challenges because of the dominance of functional experts in the organization. Appellation Shanxi: Grace Vineyard 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Grace Vineyard 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, Appellation Shanxi: Grace Vineyard, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Grace Vineyard 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 Grace Vineyard to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Grace Vineyard 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 Appellation Shanxi: Grace Vineyard - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Grace Vineyard to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Grace Vineyard 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.
Leveraging digital technologies
– Grace Vineyard 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Grace Vineyard can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Appellation Shanxi: Grace Vineyard External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Appellation Shanxi: Grace Vineyard are -
Environmental challenges
– Grace Vineyard 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. Grace Vineyard can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Grace Vineyard is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Grace Vineyard business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Appellation Shanxi: Grace Vineyard, Grace Vineyard 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 .
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. Grace Vineyard can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Grace Vineyard has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Grace Vineyard 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.
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. Grace Vineyard 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Grace Vineyard 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 Appellation Shanxi: Grace Vineyard .
High dependence on third party suppliers
– Grace Vineyard 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.
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. Grace Vineyard needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Grace Vineyard
– 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 Grace Vineyard.
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.
Regulatory challenges
– Grace Vineyard 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.
Weighted SWOT Analysis of Appellation Shanxi: Grace Vineyard 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 Appellation Shanxi: Grace Vineyard 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 Appellation Shanxi: Grace Vineyard 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 Appellation Shanxi: Grace Vineyard 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 Appellation Shanxi: Grace Vineyard 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 Grace Vineyard needs to make to build a sustainable competitive advantage.
