Israeli Wines in China: Reaching for New Heights SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Israeli Wines in China: Reaching for New Heights
In 2012, Golan Heights Wines wanted to take advantage of the Chinese market. In recent years, China had demonstrated incredible growth in the wine market. Consumers' growing interest in wine products had made wineries and vineyards like Golan Heights hungry for entry. The CEO of Golan Heights Winery had gone to China with her products in 2009. She had chosen distributorships as the mode of entry because of their expertise and experience in the Chinese market, something she did not possess. Since she had entered the market, however, she had learned of the seemingly disappointing demand for Israeli wines. Sales were rather limited given the size of the market. Most Chinese consumers who sought imported wines wanted them from Europe, particularly France. Additionally, vendors and distributors did a poor job of pushing Israel products. The CEO needed to devise and execute a series of strategies to better take advantage of the impressive Chinese market, establish a brand for Golan Heights Wines and create a platform for future growth. Authors Ilan Alon, Jennifer Dugosh and Meredith Lohwasser are affiliated with Rollins College.
Authors :: Ilan Alon, Jennifer Dugosh, Meredith Lohwasser
Swot Analysis of "Israeli Wines in China: Reaching for New Heights" written by Ilan Alon, Jennifer Dugosh, Meredith Lohwasser includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Golan Heights facing as an external strategic factors. Some of the topics covered in Israeli Wines in China: Reaching for New Heights case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Israeli Wines in China: Reaching for New Heights casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, technology disruption, there is backlash against globalization,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Israeli Wines in China: Reaching for New Heights
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Israeli Wines in China: Reaching for New Heights case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Golan Heights, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Golan Heights 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 Israeli Wines in China: Reaching for New Heights can be done for the following purposes –
1. Strategic planning using facts provided in Israeli Wines in China: Reaching for New Heights case study
2. Improving business portfolio management of Golan Heights
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 Golan Heights
Strengths Israeli Wines in China: Reaching for New Heights | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Golan Heights in Israeli Wines in China: Reaching for New Heights Harvard Business Review case study are -
Ability to recruit top talent
– Golan Heights is one of the leading recruiters in the industry. Managers in the Israeli Wines in China: Reaching for New Heights are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Israeli Wines in China: Reaching for New Heights 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Israeli Wines in China: Reaching for New Heights firm has clearly differentiated products in the market place. This has enabled Golan Heights to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Golan Heights to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Golan Heights 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
– Golan Heights is present in almost all the verticals within the industry. This has provided firm in Israeli Wines in China: Reaching for New Heights 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.
Successful track record of launching new products
– Golan Heights has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Golan Heights 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.
Superior customer experience
– The customer experience strategy of Golan Heights in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Golan Heights 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 Golan Heights in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Golan Heights 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 Israeli Wines in China: Reaching for New Heights HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Golan Heights is one of the most innovative firm in sector. Manager in Israeli Wines in China: Reaching for New Heights Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Golan Heights has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Golan Heights to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Golan Heights
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Golan Heights does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Israeli Wines in China: Reaching for New Heights | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Israeli Wines in China: Reaching for New Heights are -
High cash cycle compare to competitors
Golan Heights 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 operating costs
– Compare to the competitors, firm in the HBR case study Israeli Wines in China: Reaching for New Heights 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 Golan Heights 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Israeli Wines in China: Reaching for New Heights, is just above the industry average. Golan Heights 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ilan Alon, Jennifer Dugosh, Meredith Lohwasser suggests that, Golan Heights 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Golan Heights is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Israeli Wines in China: Reaching for New Heights can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Golan Heights 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. Golan Heights 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Israeli Wines in China: Reaching for New Heights, in the dynamic environment Golan Heights has struggled to respond to the nimble upstart competition. Golan Heights has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Golan Heights 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.
Skills based hiring
– The stress on hiring functional specialists at Golan Heights 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Israeli Wines in China: Reaching for New Heights 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 Golan Heights has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Golan Heights, firm in the HBR case study Israeli Wines in China: Reaching for New Heights needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Israeli Wines in China: Reaching for New Heights | 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 Israeli Wines in China: Reaching for New Heights are -
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 Golan Heights 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.
Developing new processes and practices
– Golan Heights 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.
Better consumer reach
– The expansion of the 5G network will help Golan Heights to increase its market reach. Golan Heights 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.
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. Golan Heights can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Golan Heights 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 Israeli Wines in China: Reaching for New Heights - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Golan Heights to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Golan Heights in the consumer business. Now Golan Heights can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Golan Heights 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Golan Heights can use these opportunities to build new business models that can help the communities that Golan Heights operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Golan Heights 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 Golan Heights to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Golan Heights 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, Israeli Wines in China: Reaching for New Heights, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Golan Heights can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Golan Heights is facing challenges because of the dominance of functional experts in the organization. Israeli Wines in China: Reaching for New Heights 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.
Learning at scale
– Online learning technologies has now opened space for Golan Heights 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.
Threats Israeli Wines in China: Reaching for New Heights External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Israeli Wines in China: Reaching for New Heights are -
Stagnating economy with rate increase
– Golan Heights 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.
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 Golan Heights 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 Golan Heights 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 Golan Heights with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Golan Heights can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Golan Heights 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. Golan Heights can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Golan Heights 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.
Shortening product life cycle
– it is one of the major threat that Golan Heights is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Golan Heights
– 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 Golan Heights.
Technology acceleration in Forth Industrial Revolution
– Golan Heights has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Golan Heights 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Golan Heights 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 Israeli Wines in China: Reaching for New Heights .
Consumer confidence and its impact on Golan Heights 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.
Weighted SWOT Analysis of Israeli Wines in China: Reaching for New Heights 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 Israeli Wines in China: Reaching for New Heights 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 Israeli Wines in China: Reaching for New Heights 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 Israeli Wines in China: Reaching for New Heights 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 Israeli Wines in China: Reaching for New Heights 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 Golan Heights needs to make to build a sustainable competitive advantage.