Case Study Description of Chardonnay Shortage at Mondavi Winery
Mondavi Winery is facing a shortage of its Chardonnay wine. This shortage will disrupt its positioning in wine outlets and impact earnings. Allows students to discuss how to communicate such temporary--but financially important--shocks to the capital markets and Mondavi's other stakeholders. Mondavi's subsequent problems in meeting prior earnings forecasts also allow for a discussion of earnings guidance policies.
Swot Analysis of "Chardonnay Shortage at Mondavi Winery" written by Gregory S. Miller, Thomas Doyle includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chardonnay Mondavi's facing as an external strategic factors. Some of the topics covered in Chardonnay Shortage at Mondavi Winery case study are - Strategic Management Strategies, Communication, Financial markets, Forecasting and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Chardonnay Shortage at Mondavi Winery casestudy better are - – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Chardonnay Shortage at Mondavi Winery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chardonnay Shortage at Mondavi Winery case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chardonnay Mondavi's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chardonnay Mondavi's 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 Chardonnay Shortage at Mondavi Winery can be done for the following purposes –
1. Strategic planning using facts provided in Chardonnay Shortage at Mondavi Winery case study
2. Improving business portfolio management of Chardonnay Mondavi's
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chardonnay Mondavi's
Strengths Chardonnay Shortage at Mondavi Winery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chardonnay Mondavi's in Chardonnay Shortage at Mondavi Winery Harvard Business Review case study are -
Highly skilled collaborators
– Chardonnay Mondavi's 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 Chardonnay Shortage at Mondavi Winery HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Chardonnay Mondavi's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Chardonnay Mondavi's 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 Chardonnay Shortage at Mondavi Winery - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Chardonnay Mondavi's 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 Chardonnay Mondavi's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chardonnay Shortage at Mondavi Winery Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Chardonnay Mondavi's is one of the most innovative firm in sector. Manager in Chardonnay Shortage at Mondavi Winery Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Chardonnay Mondavi's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chardonnay Mondavi's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Chardonnay Mondavi's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Chardonnay Mondavi's 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 Gregory S. Miller, Thomas Doyle 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 Finance & Accounting field
– Chardonnay Mondavi's 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 Chardonnay Mondavi's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Chardonnay Mondavi's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chardonnay Mondavi's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Chardonnay Shortage at Mondavi Winery firm has clearly differentiated products in the market place. This has enabled Chardonnay Mondavi's to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Chardonnay Mondavi's to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Chardonnay Mondavi's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chardonnay Mondavi's 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.
Weaknesses Chardonnay Shortage at Mondavi Winery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chardonnay Shortage at Mondavi Winery are -
High cash cycle compare to competitors
Chardonnay Mondavi's 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 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 Chardonnay Mondavi's supply chain. Even after few cautionary changes mentioned in the HBR case study - Chardonnay Shortage at Mondavi Winery, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chardonnay Mondavi's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Chardonnay Shortage at Mondavi Winery, is just above the industry average. Chardonnay Mondavi's 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 operating costs
– Compare to the competitors, firm in the HBR case study Chardonnay Shortage at Mondavi Winery 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 Chardonnay Mondavi's 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Chardonnay Mondavi's 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. Chardonnay Mondavi's 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.
Interest costs
– Compare to the competition, Chardonnay Mondavi's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Chardonnay Shortage at Mondavi Winery, it seems that the employees of Chardonnay Mondavi's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Chardonnay Mondavi's 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gregory S. Miller, Thomas Doyle suggests that, Chardonnay Mondavi's 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 strategic competitive environment developments
– As Chardonnay Shortage at Mondavi Winery HBR case study mentions - Chardonnay Mondavi's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Chardonnay Mondavi's, firm in the HBR case study Chardonnay Shortage at Mondavi Winery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Chardonnay Shortage at Mondavi Winery | 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 Chardonnay Shortage at Mondavi Winery are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Chardonnay Mondavi's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chardonnay Mondavi's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Chardonnay Mondavi's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chardonnay Shortage at Mondavi Winery 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chardonnay Mondavi's 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. Chardonnay Mondavi's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chardonnay Mondavi's 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, Chardonnay Shortage at Mondavi Winery, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Chardonnay Mondavi's to increase its market reach. Chardonnay Mondavi's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chardonnay Mondavi's 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.
Developing new processes and practices
– Chardonnay Mondavi's can develop new processes and procedures in Finance & Accounting 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.
Learning at scale
– Online learning technologies has now opened space for Chardonnay Mondavi's 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.
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 Chardonnay Mondavi's in the consumer business. Now Chardonnay Mondavi's can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Chardonnay Mondavi's can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Loyalty marketing
– Chardonnay Mondavi's 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.
Creating value in data economy
– The success of analytics program of Chardonnay Mondavi's has opened avenues for new revenue streams for the organization in the industry. This can help Chardonnay Mondavi's to build a more holistic ecosystem as suggested in the Chardonnay Shortage at Mondavi Winery case study. Chardonnay Mondavi's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Chardonnay Shortage at Mondavi Winery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chardonnay Shortage at Mondavi Winery are -
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 Chardonnay Mondavi's.
High dependence on third party suppliers
– Chardonnay Mondavi's 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.
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 Chardonnay Mondavi's business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Chardonnay Mondavi's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chardonnay Shortage at Mondavi Winery, Chardonnay Mondavi's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chardonnay Mondavi's 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 Chardonnay Shortage at Mondavi Winery .
Technology acceleration in Forth Industrial Revolution
– Chardonnay Mondavi's has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Chardonnay Mondavi's needs to keep up with the evolution of technology in the Finance & Accounting 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 wage structure of Chardonnay Mondavi's
– 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 Chardonnay Mondavi's.
Environmental challenges
– Chardonnay Mondavi's 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. Chardonnay Mondavi's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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. Chardonnay Mondavi's 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.
Stagnating economy with rate increase
– Chardonnay Mondavi's 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.
Regulatory challenges
– Chardonnay Mondavi's 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 Finance & Accounting industry regulations.
Weighted SWOT Analysis of Chardonnay Shortage at Mondavi Winery 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 Chardonnay Shortage at Mondavi Winery 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 Chardonnay Shortage at Mondavi Winery 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 Chardonnay Shortage at Mondavi Winery 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 Chardonnay Shortage at Mondavi Winery 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 Chardonnay Mondavi's needs to make to build a sustainable competitive advantage.