Case Study Description of Clover Food Lab: Sustainability as Competitive Advantage
By July 2012, the founder of Clover Food Lab (Clover) had created a profitable business that served locally sourced, organic, vegetarian fast food. Over the course of four years, Clover had grown from one food truck parked on the Massachusetts Institute of Technology (MIT) campus in Cambridge to five food trucks and two brick-and-mortar restaurants in the metropolitan Boston area. With loyal customers advocating for the brand, the CEO knew that his company was well positioned for continued growth. He dreamed of turning Clover into a global fast-food provider, capturing enough market share to compete directly with international fast-food chains like McDonald's. In 2014, he considered expanding his company into a new market and wondered whether Clover's vision and operations could be duplicated. Michael Crooke is affiliated with Pepperdine University. Mark Chun is affiliated with Pepperdine University. Amanda Kastelic is affiliated with Pepperdine University.
Authors :: Michael Crooke, Mark Chun, Amanda Kastelic
Swot Analysis of "Clover Food Lab: Sustainability as Competitive Advantage" written by Michael Crooke, Mark Chun, Amanda Kastelic includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Clover Food facing as an external strategic factors. Some of the topics covered in Clover Food Lab: Sustainability as Competitive Advantage case study are - Strategic Management Strategies, Competitive strategy, Entrepreneurship, Social responsibility, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Clover Food Lab: Sustainability as Competitive Advantage casestudy better are - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, wage bills are increasing,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Clover Food Lab: Sustainability as Competitive Advantage
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Clover Food Lab: Sustainability as Competitive Advantage case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clover Food, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clover Food 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 Clover Food Lab: Sustainability as Competitive Advantage can be done for the following purposes –
1. Strategic planning using facts provided in Clover Food Lab: Sustainability as Competitive Advantage case study
2. Improving business portfolio management of Clover Food
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 Clover Food
Strengths Clover Food Lab: Sustainability as Competitive Advantage | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clover Food in Clover Food Lab: Sustainability as Competitive Advantage Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Clover Food Lab: Sustainability as Competitive Advantage firm has clearly differentiated products in the market place. This has enabled Clover Food to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Clover Food to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Clover Food 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.
Diverse revenue streams
– Clover Food is present in almost all the verticals within the industry. This has provided firm in Clover Food Lab: Sustainability as Competitive Advantage 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Clover Food digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Clover Food 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.
Superior customer experience
– The customer experience strategy of Clover Food in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Clover Food has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Clover Food Lab: Sustainability as Competitive Advantage 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.
Operational resilience
– The operational resilience strategy in the Clover Food Lab: Sustainability as Competitive Advantage 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.
Ability to recruit top talent
– Clover Food is one of the leading recruiters in the industry. Managers in the Clover Food Lab: Sustainability as Competitive Advantage are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Clover Food is one of the most innovative firm in sector. Manager in Clover Food Lab: Sustainability as Competitive Advantage Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Clover Food 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 Clover Food in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Clover Food has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Clover Food 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.
Cross disciplinary teams
– Horizontal connected teams at the Clover Food 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.
Weaknesses Clover Food Lab: Sustainability as Competitive Advantage | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Clover Food Lab: Sustainability as Competitive Advantage are -
Slow to strategic competitive environment developments
– As Clover Food Lab: Sustainability as Competitive Advantage HBR case study mentions - Clover Food 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 bargaining power of channel partners
– Because of the regulatory requirements, Michael Crooke, Mark Chun, Amanda Kastelic suggests that, Clover Food is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Clover Food 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. Clover Food 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.
Lack of clear differentiation of Clover Food products
– To increase the profitability and margins on the products, Clover Food needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Clover Food Lab: Sustainability as Competitive Advantage, in the dynamic environment Clover Food has struggled to respond to the nimble upstart competition. Clover Food has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Clover Food 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 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 Clover Food supply chain. Even after few cautionary changes mentioned in the HBR case study - Clover Food Lab: Sustainability as Competitive Advantage, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Clover Food vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Clover Food Lab: Sustainability as Competitive Advantage 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 Clover Food 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Clover Food Lab: Sustainability as Competitive Advantage, it seems that the employees of Clover Food 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.
Skills based hiring
– The stress on hiring functional specialists at Clover Food 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.
Products dominated business model
– Even though Clover Food 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 - Clover Food Lab: Sustainability as Competitive Advantage should strive to include more intangible value offerings along with its core products and services.
Opportunities Clover Food Lab: Sustainability as Competitive Advantage | 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 Clover Food Lab: Sustainability as Competitive Advantage are -
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 Clover Food 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Clover Food 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.
Learning at scale
– Online learning technologies has now opened space for Clover Food 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.
Using analytics as competitive advantage
– Clover Food 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 Clover Food Lab: Sustainability as Competitive Advantage - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Clover Food to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Clover Food 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.
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. Clover Food can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Clover Food can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Clover Food 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.
Building a culture of innovation
– managers at Clover Food 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Clover Food is facing challenges because of the dominance of functional experts in the organization. Clover Food Lab: Sustainability as Competitive Advantage 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.
Developing new processes and practices
– Clover Food 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Clover Food can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Clover Food 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 Clover Food to hire the very best people irrespective of their geographical location.
Threats Clover Food Lab: Sustainability as Competitive Advantage External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Clover Food Lab: Sustainability as Competitive Advantage are -
Consumer confidence and its impact on Clover Food 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.
Stagnating economy with rate increase
– Clover Food 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Clover Food Lab: Sustainability as Competitive Advantage, Clover Food 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 .
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 Clover Food business can come under increasing regulations regarding data privacy, data security, etc.
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.
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. Clover Food needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Clover Food.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Clover Food with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clover Food in the Leadership & Managing People industry. The Leadership & Managing People 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.
Regulatory challenges
– Clover Food 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.
High dependence on third party suppliers
– Clover Food 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.
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 Clover Food in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Clover Food Lab: Sustainability as Competitive Advantage 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 Clover Food Lab: Sustainability as Competitive Advantage 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 Clover Food Lab: Sustainability as Competitive Advantage 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 Clover Food Lab: Sustainability as Competitive Advantage 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 Clover Food Lab: Sustainability as Competitive Advantage 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 Clover Food needs to make to build a sustainable competitive advantage.
