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Milking Money out of Parmalat SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Milking Money out of Parmalat


At Parmalat's headquarters in Collecchio (Parma), top management was desperately trying to rescue the Group, negotiating a cash infusion of three billion euros with LBO funds, Blackstone and KKR, and the investment banking arm of Deutsche Bank. At the end of 2003, Parmalat Group was Italy's eighth largest industrial concern and arguably one of its most international. With over 37,000 employees, 139 production sites in 30 countries in all five continents, revenues in excess of 7.6 billion euros at the end of 2002, EBIT of about 600 million euros and a market capitalization of 2.3 billion euros, Parmalat was one of the largest food processing companies in the world and a renowned leader in UHT (ultra high temperature) milk production. Before that time, very few analysts had presented doubts about the Group's financial strength, and none could imagine the dimensions of the financial problems that would soon be discovered.

Authors :: Josep Tapies, Francesca Toninato

Topics :: Finance & Accounting

Tags :: Budgeting, Crisis communication, Globalization, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Milking Money out of Parmalat" written by Josep Tapies, Francesca Toninato includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Euros Parmalat facing as an external strategic factors. Some of the topics covered in Milking Money out of Parmalat case study are - Strategic Management Strategies, Budgeting, Crisis communication, Globalization and Finance & Accounting.


Some of the macro environment factors that can be used to understand the Milking Money out of Parmalat casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing commodity prices, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc



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Introduction to SWOT Analysis of Milking Money out of Parmalat


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Milking Money out of Parmalat case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Euros Parmalat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Euros Parmalat 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 Milking Money out of Parmalat can be done for the following purposes –
1. Strategic planning using facts provided in Milking Money out of Parmalat case study
2. Improving business portfolio management of Euros Parmalat
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 Euros Parmalat




Strengths Milking Money out of Parmalat | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Euros Parmalat in Milking Money out of Parmalat Harvard Business Review case study are -

Effective Research and Development (R&D)

– Euros Parmalat 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 Milking Money out of Parmalat - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

– Euros Parmalat 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 Milking Money out of Parmalat HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Euros Parmalat is present in almost all the verticals within the industry. This has provided firm in Milking Money out of Parmalat 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.

Analytics focus

– Euros Parmalat 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 Josep Tapies, Francesca Toninato 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.

Innovation driven organization

– Euros Parmalat is one of the most innovative firm in sector. Manager in Milking Money out of Parmalat Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Digital Transformation in Finance & Accounting segment

- digital transformation varies from industry to industry. For Euros Parmalat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Euros Parmalat has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Ability to lead change in Finance & Accounting field

– Euros Parmalat 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 Euros Parmalat in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Euros Parmalat 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.

Cross disciplinary teams

– Horizontal connected teams at the Euros Parmalat 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.

Successful track record of launching new products

– Euros Parmalat has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Euros Parmalat 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.

Organizational Resilience of Euros Parmalat

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Euros Parmalat does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Strong track record of project management

– Euros Parmalat is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.






Weaknesses Milking Money out of Parmalat | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Milking Money out of Parmalat are -

Interest costs

– Compare to the competition, Euros Parmalat 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.

High cash cycle compare to competitors

Euros Parmalat 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.

No frontier risks strategy

– After analyzing the HBR case study Milking Money out of Parmalat, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 strategic competitive environment developments

– As Milking Money out of Parmalat HBR case study mentions - Euros Parmalat 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.

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 Euros Parmalat supply chain. Even after few cautionary changes mentioned in the HBR case study - Milking Money out of Parmalat, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Euros Parmalat vulnerable to further global disruptions in South East Asia.

High operating costs

– Compare to the competitors, firm in the HBR case study Milking Money out of Parmalat 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 Euros Parmalat 's lucrative customers.

Lack of clear differentiation of Euros Parmalat products

– To increase the profitability and margins on the products, Euros Parmalat needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Euros Parmalat is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Milking Money out of Parmalat 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 bargaining power of channel partners

– Because of the regulatory requirements, Josep Tapies, Francesca Toninato suggests that, Euros Parmalat 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Milking Money out of Parmalat, it seems that the employees of Euros Parmalat 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.

Increasing silos among functional specialists

– The organizational structure of Euros Parmalat is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Euros Parmalat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Euros Parmalat to focus more on services rather than just following the product oriented approach.




Opportunities Milking Money out of Parmalat | 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 Milking Money out of Parmalat are -

Better consumer reach

– The expansion of the 5G network will help Euros Parmalat to increase its market reach. Euros Parmalat 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, Euros Parmalat can use these opportunities to build new business models that can help the communities that Euros Parmalat operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.

Manufacturing automation

– Euros Parmalat 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.

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. Euros Parmalat 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. Euros Parmalat 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.

Using analytics as competitive advantage

– Euros Parmalat 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 Milking Money out of Parmalat - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Euros Parmalat to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Buying journey improvements

– Euros Parmalat can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Milking Money out of Parmalat 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.

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. Euros Parmalat can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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 Euros Parmalat 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Euros Parmalat can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Euros Parmalat 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.

Developing new processes and practices

– Euros Parmalat 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.

Leveraging digital technologies

– Euros Parmalat 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Euros Parmalat 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.




Threats Milking Money out of Parmalat External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Milking Money out of Parmalat are -

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. Euros Parmalat needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Euros Parmalat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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 Euros Parmalat business can come under increasing regulations regarding data privacy, data security, etc.

Technology acceleration in Forth Industrial Revolution

– Euros Parmalat has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Euros Parmalat 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.

Stagnating economy with rate increase

– Euros Parmalat 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.

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 Euros Parmalat.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Milking Money out of Parmalat, Euros Parmalat 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 .

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 Euros Parmalat in the Finance & Accounting sector and impact the bottomline of the organization.

Environmental challenges

– Euros Parmalat 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. Euros Parmalat 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.

Consumer confidence and its impact on Euros Parmalat 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Euros Parmalat 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 Milking Money out of Parmalat .

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. Euros Parmalat 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.




Weighted SWOT Analysis of Milking Money out of Parmalat 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 Milking Money out of Parmalat 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 Milking Money out of Parmalat 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 Milking Money out of Parmalat 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 Milking Money out of Parmalat 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 Euros Parmalat needs to make to build a sustainable competitive advantage.



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