Transcend Coffee: Local Sustainability Challenges in a Global Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Transcend Coffee: Local Sustainability Challenges in a Global Industry
In 2014, Transcend Coffee-an independent coffee shop and coffee bean roaster with several locations in Edmonton, Alberta-was selling premium coffee to a loyal base of customers. While it had taken several years to establish its presence in a marketplace that was filled with coffee retailers, Transcend Coffee's success was in part due to its direct trade supply chain strategy. By working closely with its coffee bean farmers, Transcend Coffee was able to assist in improving both the growing process of the beans and the quality of the coffee. When one of its farmers experienced a disastrous coffee bean season, the company was faced with several challenges that could have an impact on not just its profits but also the livelihood of its farmers. With demand for its coffee at an all-time high, Transcend Coffee had to consider how to mitigate a supply shortage without sacrificing quality. The founder was unsure if the current supply chain could guarantee a steady supply of high-quality coffee, or whether he could maintain transparency with consumers and suppliers if there was variability with the product. He had to quickly decide what to do about the poor harvest and his relationship with the supplier and also figure out how to meet customer demand. Joel Gehman is affiliated with University of Alberta. Nicole Neufeld is affiliated with University of Alberta. Dasha Smirnow is affiliated with University of Alberta. Siddharth Agrawal is affiliated with University of Alberta. Danielle Sandberg is affiliated with University of Alberta. Manav Deol is affiliated with University of Alberta.
Authors :: Joel Gehman, Nicole Neufeld, Dasha Smirnow, Siddharth Agrawal
Swot Analysis of "Transcend Coffee: Local Sustainability Challenges in a Global Industry" written by Joel Gehman, Nicole Neufeld, Dasha Smirnow, Siddharth Agrawal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coffee Alberta facing as an external strategic factors. Some of the topics covered in Transcend Coffee: Local Sustainability Challenges in a Global Industry case study are - Strategic Management Strategies, Financial management, International business, Strategy, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Transcend Coffee: Local Sustainability Challenges in a Global Industry casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
supply chains are disrupted by pandemic , there is backlash against globalization, etc
Introduction to SWOT Analysis of Transcend Coffee: Local Sustainability Challenges in a Global Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transcend Coffee: Local Sustainability Challenges in a Global Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coffee Alberta, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coffee Alberta 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry can be done for the following purposes –
1. Strategic planning using facts provided in Transcend Coffee: Local Sustainability Challenges in a Global Industry case study
2. Improving business portfolio management of Coffee Alberta
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 Coffee Alberta
Strengths Transcend Coffee: Local Sustainability Challenges in a Global Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coffee Alberta in Transcend Coffee: Local Sustainability Challenges in a Global Industry Harvard Business Review case study are -
Highly skilled collaborators
– Coffee Alberta 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Coffee Alberta in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Coffee Alberta is present in almost all the verticals within the industry. This has provided firm in Transcend Coffee: Local Sustainability Challenges in a Global Industry 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.
High brand equity
– Coffee Alberta has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Coffee Alberta to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Transcend Coffee: Local Sustainability Challenges in a Global Industry 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.
Successful track record of launching new products
– Coffee Alberta has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coffee Alberta 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.
Training and development
– Coffee Alberta has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Transcend Coffee: Local Sustainability Challenges in a Global Industry 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
– Coffee Alberta 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 Joel Gehman, Nicole Neufeld, Dasha Smirnow, Siddharth Agrawal 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.
Effective Research and Development (R&D)
– Coffee Alberta 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Coffee Alberta is one of the most innovative firm in sector. Manager in Transcend Coffee: Local Sustainability Challenges in a Global Industry 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
– Coffee Alberta 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 Coffee Alberta in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Coffee Alberta digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coffee Alberta 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transcend Coffee: Local Sustainability Challenges in a Global Industry are -
High operating costs
– Compare to the competitors, firm in the HBR case study Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Coffee Alberta 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Coffee Alberta is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Coffee Alberta needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coffee Alberta to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry can leverage the sales team experience to cultivate customer relationships as Coffee Alberta is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Coffee Alberta, firm in the HBR case study Transcend Coffee: Local Sustainability Challenges in a Global Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Coffee Alberta 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.
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 Coffee Alberta supply chain. Even after few cautionary changes mentioned in the HBR case study - Transcend Coffee: Local Sustainability Challenges in a Global Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coffee Alberta vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Coffee Alberta 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. Coffee Alberta 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.
Slow to strategic competitive environment developments
– As Transcend Coffee: Local Sustainability Challenges in a Global Industry HBR case study mentions - Coffee Alberta 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Coffee Alberta 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.
Skills based hiring
– The stress on hiring functional specialists at Coffee Alberta 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.
Lack of clear differentiation of Coffee Alberta products
– To increase the profitability and margins on the products, Coffee Alberta needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Transcend Coffee: Local Sustainability Challenges in a Global Industry | 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry are -
Leveraging digital technologies
– Coffee Alberta 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 Coffee Alberta to increase its market reach. Coffee Alberta 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.
Building a culture of innovation
– managers at Coffee Alberta 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, Coffee Alberta is facing challenges because of the dominance of functional experts in the organization. Transcend Coffee: Local Sustainability Challenges in a Global Industry 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coffee Alberta 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 Coffee Alberta to hire the very best people irrespective of their geographical location.
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. Coffee Alberta 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. Coffee Alberta 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.
Developing new processes and practices
– Coffee Alberta 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.
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. Coffee Alberta can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Coffee Alberta can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transcend Coffee: Local Sustainability Challenges in a Global Industry 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Coffee Alberta 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 Coffee Alberta to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coffee Alberta 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.
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. Coffee Alberta can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Transcend Coffee: Local Sustainability Challenges in a Global Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Transcend Coffee: Local Sustainability Challenges in a Global Industry are -
High dependence on third party suppliers
– Coffee Alberta high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Coffee Alberta
– 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 Coffee Alberta.
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 Coffee Alberta 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coffee Alberta 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coffee Alberta 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.
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. Coffee Alberta can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Coffee Alberta 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.
Technology acceleration in Forth Industrial Revolution
– Coffee Alberta has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Coffee Alberta 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.
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 Coffee Alberta.
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.
Environmental challenges
– Coffee Alberta 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. Coffee Alberta can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Coffee Alberta in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Transcend Coffee: Local Sustainability Challenges in a Global Industry 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 Coffee Alberta needs to make to build a sustainable competitive advantage.