Hummus Bar: Dipping into International Markets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hummus Bar: Dipping into International Markets
The founder of Hummus Bar, a successful restaurant in Hungary, is considering expansion. He is struggling to identify and select the most promising market. Should he pursue domestic expansion or consider internationalizing his concept? The founder wants to recruit and involve additional investors to spread risk, enhance the brand through diversified skill sets and ensure he selects the most appropriate entry strategy. Authors Ilan Alon and Jennifer Dugosh are affiliated with Rollins College. Author Yusaf Akbar is affiliated with CEU Business School.
Authors :: Alon Ilan, Jennifer Dugosh, Yusaf Akbar
Swot Analysis of "Hummus Bar: Dipping into International Markets" written by Alon Ilan, Jennifer Dugosh, Yusaf Akbar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hummus Bar facing as an external strategic factors. Some of the topics covered in Hummus Bar: Dipping into International Markets case study are - Strategic Management Strategies, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Hummus Bar: Dipping into International Markets casestudy better are - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, wage bills are increasing, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
there is backlash against globalization, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Hummus Bar: Dipping into International Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hummus Bar: Dipping into International Markets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hummus Bar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hummus Bar 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 Hummus Bar: Dipping into International Markets can be done for the following purposes –
1. Strategic planning using facts provided in Hummus Bar: Dipping into International Markets case study
2. Improving business portfolio management of Hummus Bar
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 Hummus Bar
Strengths Hummus Bar: Dipping into International Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hummus Bar in Hummus Bar: Dipping into International Markets Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Hummus Bar in the sector have low bargaining power. Hummus Bar: Dipping into International Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hummus Bar to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Hummus Bar is one of the leading recruiters in the industry. Managers in the Hummus Bar: Dipping into International Markets are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Hummus Bar 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 Hummus Bar: Dipping into International Markets - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Hummus Bar: Dipping into International Markets firm has clearly differentiated products in the market place. This has enabled Hummus Bar to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Hummus Bar to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Hummus Bar 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 Hummus Bar: Dipping into International Markets HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Hummus Bar
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hummus Bar does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Hummus Bar is one of the most innovative firm in sector. Manager in Hummus Bar: Dipping into International Markets Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Hummus Bar in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Hummus Bar: Dipping into International Markets 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.
Cross disciplinary teams
– Horizontal connected teams at the Hummus Bar 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.
Strong track record of project management
– Hummus Bar 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
– Hummus Bar 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 Hummus Bar in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Hummus Bar: Dipping into International Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hummus Bar: Dipping into International Markets are -
Products dominated business model
– Even though Hummus Bar 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 - Hummus Bar: Dipping into International Markets should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Hummus Bar 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. Hummus Bar 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hummus Bar: Dipping into International Markets, is just above the industry average. Hummus Bar 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.
Lack of clear differentiation of Hummus Bar products
– To increase the profitability and margins on the products, Hummus Bar needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hummus Bar supply chain. Even after few cautionary changes mentioned in the HBR case study - Hummus Bar: Dipping into International Markets, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hummus Bar vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Hummus Bar 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.
No frontier risks strategy
– After analyzing the HBR case study Hummus Bar: Dipping into International Markets, 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hummus Bar is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hummus Bar: Dipping into International Markets 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 operating costs
– Compare to the competitors, firm in the HBR case study Hummus Bar: Dipping into International Markets 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 Hummus Bar 's lucrative customers.
High cash cycle compare to competitors
Hummus Bar 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hummus Bar: Dipping into International Markets, in the dynamic environment Hummus Bar has struggled to respond to the nimble upstart competition. Hummus Bar has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Hummus Bar: Dipping into International Markets | 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 Hummus Bar: Dipping into International Markets are -
Leveraging digital technologies
– Hummus Bar 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 Hummus Bar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hummus Bar 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, Hummus Bar: Dipping into International Markets, 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 Hummus Bar 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 Hummus Bar to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hummus Bar 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.
Building a culture of innovation
– managers at Hummus Bar 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.
Using analytics as competitive advantage
– Hummus Bar 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 Hummus Bar: Dipping into International Markets - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hummus Bar to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hummus Bar can use these opportunities to build new business models that can help the communities that Hummus Bar operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Hummus Bar has opened avenues for new revenue streams for the organization in the industry. This can help Hummus Bar to build a more holistic ecosystem as suggested in the Hummus Bar: Dipping into International Markets case study. Hummus Bar can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hummus Bar 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.
Manufacturing automation
– Hummus Bar 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.
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 Hummus Bar in the consumer business. Now Hummus Bar can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Hummus Bar 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.
Threats Hummus Bar: Dipping into International Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hummus Bar: Dipping into International Markets are -
Shortening product life cycle
– it is one of the major threat that Hummus Bar is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Hummus Bar 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, Hummus Bar 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 Hummus Bar: Dipping into International Markets .
Consumer confidence and its impact on Hummus Bar 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.
Regulatory challenges
– Hummus Bar 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hummus Bar 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.
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 Hummus Bar business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Hummus Bar
– 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 Hummus Bar.
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 Hummus Bar.
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.
Environmental challenges
– Hummus Bar 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. Hummus Bar can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hummus Bar with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Hummus Bar has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Hummus Bar 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.
Weighted SWOT Analysis of Hummus Bar: Dipping into International Markets 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 Hummus Bar: Dipping into International Markets 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 Hummus Bar: Dipping into International Markets 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 Hummus Bar: Dipping into International Markets 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 Hummus Bar: Dipping into International Markets 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 Hummus Bar needs to make to build a sustainable competitive advantage.