Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed
Carvajal traces the 110-year history of one of Colombian's oldest family-owned firms from a small print shop to one of the largest paper product conglomerates in Latin America. Founded in 1904 by Manuel Carvajal, a Colombian educator and erstwhile politician, the company has contributed to Colombia's economic and intellectual development ever since. By the 1950s Carvajal was the leading printer and publishing house in Latin America. Although the company benefitted from state protection, a tradition of technical innovation was established - in 1958 it printed the first telephone directory for BogotA? on two-sheet offset press - and thereafter expanded into neighboring countries, diversifying into inter-linked activities. Throughout the 20th century the firm was led by descendants of the founder. In the 21st century, a non-family CEO was hired for the first time.
Authors :: Morten Bennedsen, Alexander Guzman, Brian Henry, Maria Andrea Trujillo
Swot Analysis of "Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed" written by Morten Bennedsen, Alexander Guzman, Brian Henry, Maria Andrea Trujillo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carvajal Family facing as an external strategic factors. Some of the topics covered in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed casestudy better are - – technology disruption, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carvajal Family, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carvajal Family 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed can be done for the following purposes –
1. Strategic planning using facts provided in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed case study
2. Improving business portfolio management of Carvajal Family
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 Carvajal Family
Strengths Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Carvajal Family in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed Harvard Business Review case study are -
Innovation driven organization
– Carvajal Family is one of the most innovative firm in sector. Manager in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Carvajal Family in the sector have low bargaining power. Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Carvajal Family to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Carvajal Family in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Carvajal Family 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 Carvajal Family in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Carvajal Family 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed - 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
– Carvajal Family has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Carvajal Family to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Carvajal Family 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 Carvajal Family is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Leadership & Managing People industry
– Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed firm has clearly differentiated products in the market place. This has enabled Carvajal Family to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Carvajal Family to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Carvajal Family has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Carvajal Family 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.
Analytics focus
– Carvajal Family 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 Morten Bennedsen, Alexander Guzman, Brian Henry, Maria Andrea Trujillo 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.
Highly skilled collaborators
– Carvajal Family 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Carvajal Family has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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.
Weaknesses Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed are -
Workers concerns about automation
– As automation is fast increasing in the segment, Carvajal Family 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Carvajal Family is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Carvajal Family, firm in the HBR case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Carvajal Family 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 star products
– The top 2 products and services of the firm as mentioned in the Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal Family has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed, it seems that the employees of Carvajal Family 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Morten Bennedsen, Alexander Guzman, Brian Henry, Maria Andrea Trujillo suggests that, Carvajal Family 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 cash cycle compare to competitors
Carvajal Family 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 Carvajal Family 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 - Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal Family 's lucrative customers.
Opportunities Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed | 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed are -
Building a culture of innovation
– managers at Carvajal Family 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.
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 Carvajal Family 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carvajal Family can use these opportunities to build new business models that can help the communities that Carvajal Family operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Carvajal Family in the consumer business. Now Carvajal Family can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Carvajal Family 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carvajal Family to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Carvajal Family 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, Carvajal Family 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, Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Carvajal Family 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.
Creating value in data economy
– The success of analytics program of Carvajal Family has opened avenues for new revenue streams for the organization in the industry. This can help Carvajal Family to build a more holistic ecosystem as suggested in the Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed case study. Carvajal Family can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Carvajal Family can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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.
Leveraging digital technologies
– Carvajal Family 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.
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. Carvajal Family can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Carvajal Family 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.
Threats Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed are -
Regulatory challenges
– Carvajal Family 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.
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. Carvajal Family 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.
Stagnating economy with rate increase
– Carvajal Family 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Carvajal Family 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed .
Consumer confidence and its impact on Carvajal Family 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 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.
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.
Increasing wage structure of Carvajal Family
– 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 Carvajal Family.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Carvajal Family with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Carvajal Family.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed, Carvajal Family 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 .
Shortening product life cycle
– it is one of the major threat that Carvajal Family 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
– Carvajal Family 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.
Weighted SWOT Analysis of Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal: From Soldiers to Diplomats, from Family-Run to Professionally-Managed 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 Carvajal Family needs to make to build a sustainable competitive advantage.
