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 - – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, 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 -
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.
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.
Ability to recruit top talent
– Chardonnay Mondavi's is one of the leading recruiters in the industry. Managers in the Chardonnay Shortage at Mondavi Winery are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Chardonnay Mondavi's in the sector have low bargaining power. Chardonnay Shortage at Mondavi Winery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chardonnay Mondavi's to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Chardonnay Mondavi's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High 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.
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.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study Chardonnay Shortage at Mondavi Winery 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 Chardonnay Shortage at Mondavi Winery can leverage the sales team experience to cultivate customer relationships as Chardonnay Mondavi's is planning to shift buying processes online.
Products dominated business model
– Even though Chardonnay Mondavi's 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 - Chardonnay Shortage at Mondavi Winery should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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 -
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.
Building a culture of innovation
– managers at Chardonnay Mondavi's 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 Finance & Accounting segment.
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.
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.
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.
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.
Leveraging digital technologies
– Chardonnay Mondavi's 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chardonnay Mondavi's can use these opportunities to build new business models that can help the communities that Chardonnay Mondavi's operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chardonnay Mondavi's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chardonnay Mondavi's 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 Chardonnay Mondavi's to hire the very best people irrespective of their geographical location.
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.
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 -
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.
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.
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.
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. Chardonnay Mondavi's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Chardonnay Mondavi's is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chardonnay Mondavi's in the Finance & Accounting industry. The Finance & Accounting 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 Chardonnay Mondavi's business can come under increasing regulations regarding data privacy, data security, etc.
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 Chardonnay Mondavi's in the Finance & Accounting sector and impact the bottomline of the organization.
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 .
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.
Consumer confidence and its impact on Chardonnay Mondavi's 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 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.
