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 - – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Bakery Wooden digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bakery Wooden 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.
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.
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.
Superior customer experience
– The customer experience strategy of Bakery Wooden in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Bakery Wooden 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)
– 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.
Training and development
– Bakery Wooden has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wooden Bakery: Should It Enter the U.S. Market? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Bakery Wooden 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.
Innovation driven organization
– Bakery Wooden is one of the most innovative firm in sector. Manager in Wooden Bakery: Should It Enter the U.S. Market? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– 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.
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 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wooden Bakery: Should It Enter the U.S. Market?, it seems that the employees of Bakery Wooden 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.
Capital Spending Reduction
– Even during the low interest decade, Bakery Wooden 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.
Slow decision making process
– As mentioned earlier in the report, Bakery Wooden 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. Bakery Wooden 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.
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 cash cycle compare to competitors
Bakery Wooden 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.
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.
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.
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 -
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Bakery Wooden can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Bakery Wooden has opened avenues for new revenue streams for the organization in the industry. This can help Bakery Wooden to build a more holistic ecosystem as suggested in the Wooden Bakery: Should It Enter the U.S. Market? case study. Bakery Wooden can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Developing new processes and practices
– Bakery Wooden can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bakery Wooden is facing challenges because of the dominance of functional experts in the organization. Wooden Bakery: Should It Enter the U.S. Market? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bakery Wooden can use these opportunities to build new business models that can help the communities that Bakery Wooden operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
Buying journey improvements
– Bakery Wooden can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wooden Bakery: Should It Enter the U.S. Market? 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 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bakery Wooden with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Environmental challenges
– Bakery Wooden 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. Bakery Wooden can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
Increasing wage structure of Bakery Wooden
– 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 Bakery Wooden.
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.
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 Bakery Wooden in the Leadership & Managing People sector and impact the bottomline 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.
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.
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.
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.