Case Study Description of UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN
The case documents Unilever's journey to revitalize Lipton brand through sourcing all its tea from Rainforest Alliance Certified (TM) farms. It provides a framework for discussions around the challenges of aligning supply chains behind the re-positioning of a high-value brand as sustainable. It also explores the business case for sustainable sourcing of agricultural raw materials and raises questions on the potential to improve the economic health of the entire supply chain. Learning objectives: Understand the business case for major brands to convert to sustainable sourcing. Understand the challenges of aligning suppliers behind a major market transformation effort. Illustrate the dilemmas of adapting to a changing business context while staying on course with long-term objectives. Change the traditional perception of business responsibility in pushing forward the agenda for action on sustainable agriculture and other "mega-issues."
Swot Analysis of "UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN" written by Ralf W. Seifert, Aileen Lonescu-Somers, Tania Braga, Heidi Strebel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sourcing Sustainable facing as an external strategic factors. Some of the topics covered in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, geopolitical disruptions, increasing household debt because of falling income levels, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sourcing Sustainable, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sourcing Sustainable 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN can be done for the following purposes –
1. Strategic planning using facts provided in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN case study
2. Improving business portfolio management of Sourcing Sustainable
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 Sourcing Sustainable
Strengths UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sourcing Sustainable in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Sourcing Sustainable in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Sourcing Sustainable is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Sourcing Sustainable is one of the leading recruiters in the industry. Managers in the UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Sourcing Sustainable 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 Ralf W. Seifert, Aileen Lonescu-Somers, Tania Braga, Heidi Strebel 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 lead change in Leadership & Managing People field
– Sourcing Sustainable 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 Sourcing Sustainable in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Sourcing Sustainable has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sourcing Sustainable to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Sourcing Sustainable
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sourcing Sustainable does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Sourcing Sustainable is one of the most innovative firm in sector. Manager in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Sourcing Sustainable digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sourcing Sustainable 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.
Highly skilled collaborators
– Sourcing Sustainable 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Sourcing Sustainable 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 Sourcing Sustainable is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN, it seems that the employees of Sourcing Sustainable 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.
No frontier risks strategy
– After analyzing the HBR case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN, 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.
Increasing silos among functional specialists
– The organizational structure of Sourcing Sustainable is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Sourcing Sustainable needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sourcing Sustainable to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Sourcing Sustainable 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. Sourcing Sustainable 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, Sourcing Sustainable is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Sourcing Sustainable 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.
Capital Spending Reduction
– Even during the low interest decade, Sourcing Sustainable 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.
High cash cycle compare to competitors
Sourcing Sustainable 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.
Lack of clear differentiation of Sourcing Sustainable products
– To increase the profitability and margins on the products, Sourcing Sustainable needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN, is just above the industry average. Sourcing Sustainable 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.
Aligning sales with marketing
– It come across in the case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN can leverage the sales team experience to cultivate customer relationships as Sourcing Sustainable is planning to shift buying processes online.
Opportunities UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN | 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN are -
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. Sourcing Sustainable can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Sourcing Sustainable 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.
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 Sourcing Sustainable in the consumer business. Now Sourcing Sustainable can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Sourcing Sustainable 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.
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. Sourcing Sustainable 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. Sourcing Sustainable 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.
Buying journey improvements
– Sourcing Sustainable can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sourcing Sustainable 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, UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Sourcing Sustainable 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.
Creating value in data economy
– The success of analytics program of Sourcing Sustainable has opened avenues for new revenue streams for the organization in the industry. This can help Sourcing Sustainable to build a more holistic ecosystem as suggested in the UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN case study. Sourcing Sustainable can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Sourcing Sustainable 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.
Manufacturing automation
– Sourcing Sustainable 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, Sourcing Sustainable is facing challenges because of the dominance of functional experts in the organization. UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sourcing Sustainable 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.
Threats UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN are -
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.
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.
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. Sourcing Sustainable needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sourcing Sustainable 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN .
High dependence on third party suppliers
– Sourcing Sustainable 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. Sourcing Sustainable 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 Sourcing Sustainable 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 Sourcing Sustainable in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Sourcing Sustainable 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. Sourcing Sustainable can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Sourcing Sustainable.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sourcing Sustainable with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Sourcing Sustainable can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Sourcing Sustainable in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 Sourcing Sustainable needs to make to build a sustainable competitive advantage.
