Amorim: The Future of Natural Cork SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Amorim: The Future of Natural Cork
In 2015, Corticeira Amorim, S.G.P.S., S.A. (Amorim), the world's largest cork manufacturer, was facing multiple strategic dilemmas. After enjoying a near-monopoly in the wine stopper market for over 300 years, cork's reputation had been damaged in the 20th century by concerns over "cork taint," and the cork industry had been challenged by the resulting disruptive technologies of screw caps and synthetic corks. Amorim needed to rethink its core assumptions, including product design and supply chain strategy. The company had taken a new direction in the previous 15 years, and appeared to have regained a secure niche for the foreseeable future. The family-owned business was now emerging from its comeback and reviewing various strategic options to secure a sustainable future. Should Amorim rely more or less heavily on its wine stopper business in the future? Which form of competition should Amorim confront most directly? Should the company compete primarily based on cost or value? Chris Laszlo is affiliated with Case Western Reserve University - Fowler Center. Katherine Gullett is affiliated with Case Western Reserve University.
Authors :: Katherine Gullett, Chris Laszlo, Tim Krueger
Swot Analysis of "Amorim: The Future of Natural Cork" written by Katherine Gullett, Chris Laszlo, Tim Krueger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amorim Cork facing as an external strategic factors. Some of the topics covered in Amorim: The Future of Natural Cork case study are - Strategic Management Strategies, Marketing, Mergers & acquisitions, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Amorim: The Future of Natural Cork casestudy better are - – increasing energy prices, increasing transportation and logistics costs, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Amorim: The Future of Natural Cork
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amorim: The Future of Natural Cork case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amorim Cork, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amorim Cork 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 Amorim: The Future of Natural Cork can be done for the following purposes –
1. Strategic planning using facts provided in Amorim: The Future of Natural Cork case study
2. Improving business portfolio management of Amorim Cork
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 Amorim Cork
Strengths Amorim: The Future of Natural Cork | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amorim Cork in Amorim: The Future of Natural Cork Harvard Business Review case study are -
Training and development
– Amorim Cork has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Amorim: The Future of Natural Cork 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.
Analytics focus
– Amorim Cork 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 Katherine Gullett, Chris Laszlo, Tim Krueger 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.
Cross disciplinary teams
– Horizontal connected teams at the Amorim Cork 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.
Strong track record of project management
– Amorim Cork is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– Amorim: The Future of Natural Cork firm has clearly differentiated products in the market place. This has enabled Amorim Cork to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Amorim Cork to invest into research and development (R&D) and innovation.
Ability to lead change in Leadership & Managing People field
– Amorim Cork 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 Amorim Cork in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Amorim Cork is one of the most innovative firm in sector. Manager in Amorim: The Future of Natural Cork Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Amorim Cork is present in almost all the verticals within the industry. This has provided firm in Amorim: The Future of Natural Cork 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.
Ability to recruit top talent
– Amorim Cork is one of the leading recruiters in the industry. Managers in the Amorim: The Future of Natural Cork are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Amorim Cork in the sector have low bargaining power. Amorim: The Future of Natural Cork has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amorim Cork to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Amorim: The Future of Natural Cork 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Amorim Cork digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amorim Cork 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.
Weaknesses Amorim: The Future of Natural Cork | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amorim: The Future of Natural Cork are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amorim: The Future of Natural Cork, it seems that the employees of Amorim Cork 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.
Interest costs
– Compare to the competition, Amorim Cork 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 bargaining power of channel partners
– Because of the regulatory requirements, Katherine Gullett, Chris Laszlo, Tim Krueger suggests that, Amorim Cork 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.
Aligning sales with marketing
– It come across in the case study Amorim: The Future of Natural Cork that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Amorim: The Future of Natural Cork can leverage the sales team experience to cultivate customer relationships as Amorim Cork is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Amorim: The Future of Natural Cork, in the dynamic environment Amorim Cork has struggled to respond to the nimble upstart competition. Amorim Cork has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Amorim Cork 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 - Amorim: The Future of Natural Cork should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Amorim Cork products
– To increase the profitability and margins on the products, Amorim Cork needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Amorim Cork needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Amorim: The Future of Natural Cork 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 Amorim Cork 's lucrative customers.
Need for greater diversity
– Amorim Cork has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Amorim: The Future of Natural Cork 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 Amorim Cork has relatively successful track record of launching new products.
Opportunities Amorim: The Future of Natural Cork | 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 Amorim: The Future of Natural Cork are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amorim Cork can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Amorim Cork 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 Amorim: The Future of Natural Cork - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amorim Cork to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Amorim Cork 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.
Buying journey improvements
– Amorim Cork can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Amorim: The Future of Natural Cork 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.
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 Amorim Cork in the consumer business. Now Amorim Cork can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Amorim Cork can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Amorim Cork to increase its market reach. Amorim Cork 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amorim Cork 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amorim Cork 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, Amorim: The Future of Natural Cork, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amorim Cork 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 Amorim Cork to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Amorim Cork 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.
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. Amorim Cork can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amorim Cork can use these opportunities to build new business models that can help the communities that Amorim Cork operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Amorim: The Future of Natural Cork External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amorim: The Future of Natural Cork 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. Amorim Cork needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Amorim Cork in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Amorim: The Future of Natural Cork, Amorim Cork 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 Amorim Cork 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.
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. Amorim Cork 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amorim Cork with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Environmental challenges
– Amorim Cork 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. Amorim Cork can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Amorim Cork can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amorim Cork 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 Amorim: The Future of Natural Cork .
High dependence on third party suppliers
– Amorim Cork 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.
Stagnating economy with rate increase
– Amorim Cork 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.
Weighted SWOT Analysis of Amorim: The Future of Natural Cork 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 Amorim: The Future of Natural Cork 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 Amorim: The Future of Natural Cork 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 Amorim: The Future of Natural Cork 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 Amorim: The Future of Natural Cork 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 Amorim Cork needs to make to build a sustainable competitive advantage.
