Wooden Bakery: Should It Enter the U.S. Market? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wooden Bakery: Should It Enter the U.S. Market?
A leading family-owned Lebanese bakery-convenience store chain, Wooden Bakery, was in the process of deciding the company's next options for growth in Lebanon and in the Gulf Cooperation Council countries. The owner was pondering the use of aggressive growth strategies such as franchising and area-development franchising. Additionally, the founder of the company and its board members were facing the biggest decision in the company's history as they prepared to vote on whether to enter the U.S. market. What competitive and functional-level strategies would be required to implement such an ambitious growth strategy in a very challenging and unfamiliar market environment? Hagop Panossian is affiliated with American University of Beirut. Dima Jamali is affiliated with American University of Beirut.
Swot Analysis of "Wooden Bakery: Should It Enter the U.S. Market?" written by Hagop Panossian, Dima Jamali includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bakery Wooden facing as an external strategic factors. Some of the topics covered in Wooden Bakery: Should It Enter the U.S. Market? case study are - Strategic Management Strategies, Growth strategy, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Wooden Bakery: Should It Enter the U.S. Market? casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, wage bills are increasing, cloud computing is disrupting traditional business models, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of Wooden Bakery: Should It Enter the U.S. Market?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wooden Bakery: Should It Enter the U.S. Market? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bakery Wooden, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bakery Wooden 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 Wooden Bakery: Should It Enter the U.S. Market? can be done for the following purposes –
1. Strategic planning using facts provided in Wooden Bakery: Should It Enter the U.S. Market? case study
2. Improving business portfolio management of Bakery Wooden
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 Bakery Wooden
Strengths Wooden Bakery: Should It Enter the U.S. Market? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bakery Wooden in Wooden Bakery: Should It Enter the U.S. Market? Harvard Business Review case study are -
Highly skilled collaborators
– Bakery Wooden 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 Wooden Bakery: Should It Enter the U.S. Market? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Bakery Wooden is one of the leading recruiters in the industry. Managers in the Wooden Bakery: Should It Enter the U.S. Market? 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 Wooden Bakery: Should It Enter the U.S. Market? 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.
Effective Research and Development (R&D)
– Bakery Wooden 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 Wooden Bakery: Should It Enter the U.S. Market? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Bakery Wooden has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bakery Wooden to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Bakery Wooden in the sector have low bargaining power. Wooden Bakery: Should It Enter the U.S. Market? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bakery Wooden to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Bakery Wooden is present in almost all the verticals within the industry. This has provided firm in Wooden Bakery: Should It Enter the U.S. Market? 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.
Cross disciplinary teams
– Horizontal connected teams at the Bakery Wooden 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Wooden Bakery: Should It Enter the U.S. Market? firm has clearly differentiated products in the market place. This has enabled Bakery Wooden to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Bakery Wooden to invest into research and development (R&D) and innovation.
Organizational Resilience of Bakery Wooden
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bakery Wooden does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Bakery Wooden 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 Bakery Wooden is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wooden Bakery: Should It Enter the U.S. Market? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Bakery Wooden 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 Hagop Panossian, Dima Jamali 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.
Weaknesses Wooden Bakery: Should It Enter the U.S. Market? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wooden Bakery: Should It Enter the U.S. Market? are -
High operating costs
– Compare to the competitors, firm in the HBR case study Wooden Bakery: Should It Enter the U.S. Market? 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 Bakery Wooden 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Bakery Wooden is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Bakery Wooden needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bakery Wooden to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wooden Bakery: Should It Enter the U.S. Market? 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 Bakery Wooden has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Bakery Wooden 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wooden Bakery: Should It Enter the U.S. Market?, in the dynamic environment Bakery Wooden has struggled to respond to the nimble upstart competition. Bakery Wooden has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wooden Bakery: Should It Enter the U.S. Market?, is just above the industry average. Bakery Wooden 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, Hagop Panossian, Dima Jamali suggests that, Bakery Wooden 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.
Products dominated business model
– Even though Bakery Wooden 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 - Wooden Bakery: Should It Enter the U.S. Market? should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Bakery Wooden 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.
Slow to strategic competitive environment developments
– As Wooden Bakery: Should It Enter the U.S. Market? HBR case study mentions - Bakery Wooden 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.
Lack of clear differentiation of Bakery Wooden products
– To increase the profitability and margins on the products, Bakery Wooden needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Wooden Bakery: Should It Enter the U.S. Market? | 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 Wooden Bakery: Should It Enter the U.S. Market? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Bakery Wooden can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Bakery Wooden 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.
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 Bakery Wooden in the consumer business. Now Bakery Wooden can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Bakery Wooden to increase its market reach. Bakery Wooden 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bakery Wooden can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Bakery Wooden can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bakery Wooden 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, Wooden Bakery: Should It Enter the U.S. Market?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Bakery Wooden 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 Wooden Bakery: Should It Enter the U.S. Market? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bakery Wooden to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Bakery Wooden 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bakery Wooden in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bakery Wooden 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. Bakery Wooden 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.
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. Bakery Wooden can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Bakery Wooden 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.
Threats Wooden Bakery: Should It Enter the U.S. Market? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wooden Bakery: Should It Enter the U.S. Market? are -
Shortening product life cycle
– it is one of the major threat that Bakery Wooden is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Bakery Wooden 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.
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. Bakery Wooden can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Bakery Wooden.
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.
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 Bakery Wooden business can come under increasing regulations regarding data privacy, data security, etc.
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. Bakery Wooden needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wooden Bakery: Should It Enter the U.S. Market?, Bakery Wooden may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Consumer confidence and its impact on Bakery Wooden 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.
High dependence on third party suppliers
– Bakery Wooden 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bakery Wooden 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 Wooden Bakery: Should It Enter the U.S. Market? .
Technology acceleration in Forth Industrial Revolution
– Bakery Wooden has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Bakery Wooden 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.
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. Bakery Wooden 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 Wooden Bakery: Should It Enter the U.S. Market? 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 Wooden Bakery: Should It Enter the U.S. Market? 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 Wooden Bakery: Should It Enter the U.S. Market? 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 Wooden Bakery: Should It Enter the U.S. Market? 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 Wooden Bakery: Should It Enter the U.S. Market? 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 Bakery Wooden needs to make to build a sustainable competitive advantage.