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, increasing energy prices, there is increasing trade war between United States & China, there is backlash against globalization, increasing household debt because of falling income levels, technology disruption, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
Training and development
– Sourcing Sustainable has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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.
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.
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 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.
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.
Successful track record of launching new products
– Sourcing Sustainable has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sourcing Sustainable 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.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN firm has clearly differentiated products in the market place. This has enabled Sourcing Sustainable to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sourcing Sustainable to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Sourcing Sustainable 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.
Diverse revenue streams
– Sourcing Sustainable is present in almost all the verticals within the industry. This has provided firm in UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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.
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.
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 -
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ralf W. Seifert, Aileen Lonescu-Somers, Tania Braga, Heidi Strebel suggests that, Sourcing Sustainable 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 Sourcing Sustainable 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, 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.
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.
Low market penetration in new markets
– Outside its home market of Sourcing Sustainable, firm in the HBR case study UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN 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 Sourcing Sustainable has relatively successful track record of launching new products.
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.
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 -
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sourcing Sustainable 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 Sourcing Sustainable to hire the very best people irrespective of their geographical location.
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.
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.
Using analytics as competitive advantage
– Sourcing Sustainable 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 UNILEVER TEA (A): REVITALIZING LIPTON'S SUPPLY CHAIN - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sourcing Sustainable 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 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sourcing Sustainable can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sourcing Sustainable can use these opportunities to build new business models that can help the communities that Sourcing Sustainable operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Learning at scale
– Online learning technologies has now opened space for Sourcing Sustainable 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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Increasing wage structure of Sourcing Sustainable
– 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 Sourcing Sustainable.
Shortening product life cycle
– it is one of the major threat that Sourcing Sustainable is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Sourcing Sustainable has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Sourcing Sustainable 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.
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.
Stagnating economy with rate increase
– Sourcing Sustainable can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.