MIGUEL TORRES: ENSURING THE FAMILY LEGACIES SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MIGUEL TORRES: ENSURING THE FAMILY LEGACIES
VILAFRANCA DEL PENEDA?S, SPAIN, APRIL 2010. "The more we care for the earth, the better our wines..." With those simple words, Miguel A. Torres, the fourth-generation owner of Miguel Torres S.A., one of the largest and most reputed Spanish wine makers and distributors in the world, summarized his concern for climate change.The man was on a mission. With just two years to go before stepping down from the direction of the enterprise, he had his hands full. Not only did he want to ensure that he would leave his ancestors' distinguished house in capable hands but also that the values the firm espoused would flourish. The legacies had to go beyond family and values though: Miguel Torres wanted to convince his family, employees and the rest of the wine industry that climate change was already impacting the business. Environmental responsibility had to become part of the Torres family legacies. And that was still not obvious to most. When he chose global warming as the topic of his keynote address to Rioja wine producers in 2009, the reception was lukewarm. Winemaking peers questioned his priorities. After all, there was a global crisis going on and wine sales were down more than 10%. Why worry about long-term climate issues when there were more urgent short-term challenges to tackle? Was climate change even real? But Miguel Torres had a long-term perspective: "In the wine business one needs to think 15 years ahead. Forget weather statistics: facts are telling. In less than four decades, harvesting of the grapes in the PenedA?s region had to be brought forward more than 10 days on average." To preserve quality, Torres had already adjusted its viticulture practices, planting vines at a higher density per hectare and on higher ground to reduce the impact of increasing temperatures. Climate change was happening and it was impacting the business today. Something had to be done. Another concern for Miguel Torres was how to successfully transition the business to the fifth generation. How could he ensure the preservation of the family values? How could he make the firm attractive for the best non-family managers? How could he nurture the "youngsters" after his retirement? Learning objectives: Family business long-term perspective, sustainability, impact of climate change on the wine business, social and environmental responsibility of business, managing the succession process, brand building and management in the wine industry.
Swot Analysis of "MIGUEL TORRES: ENSURING THE FAMILY LEGACIES" written by Benoit Leleux, Jan Van Der Kaaij includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Torres Miguel facing as an external strategic factors. Some of the topics covered in MIGUEL TORRES: ENSURING THE FAMILY LEGACIES case study are - Strategic Management Strategies, Social responsibility, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the MIGUEL TORRES: ENSURING THE FAMILY LEGACIES casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing transportation and logistics costs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, supply chains are disrupted by pandemic ,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of MIGUEL TORRES: ENSURING THE FAMILY LEGACIES
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MIGUEL TORRES: ENSURING THE FAMILY LEGACIES case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Torres Miguel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Torres Miguel 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES can be done for the following purposes –
1. Strategic planning using facts provided in MIGUEL TORRES: ENSURING THE FAMILY LEGACIES case study
2. Improving business portfolio management of Torres Miguel
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 Torres Miguel
Strengths MIGUEL TORRES: ENSURING THE FAMILY LEGACIES | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Torres Miguel in MIGUEL TORRES: ENSURING THE FAMILY LEGACIES Harvard Business Review case study are -
Innovation driven organization
– Torres Miguel is one of the most innovative firm in sector. Manager in MIGUEL TORRES: ENSURING THE FAMILY LEGACIES Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Torres Miguel 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
– Torres Miguel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Torres Miguel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Torres Miguel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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.
Low bargaining power of suppliers
– Suppliers of Torres Miguel in the sector have low bargaining power. MIGUEL TORRES: ENSURING THE FAMILY LEGACIES has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Torres Miguel to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Torres Miguel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Torres Miguel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Torres Miguel 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 Torres Miguel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Torres Miguel 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Torres Miguel 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 Torres Miguel 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
– Torres Miguel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Torres Miguel 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.
Weaknesses MIGUEL TORRES: ENSURING THE FAMILY LEGACIES | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MIGUEL TORRES: ENSURING THE FAMILY LEGACIES are -
Low market penetration in new markets
– Outside its home market of Torres Miguel, firm in the HBR case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES, is just above the industry average. Torres Miguel needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 Torres Miguel 's lucrative customers.
Need for greater diversity
– Torres Miguel 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.
Capital Spending Reduction
– Even during the low interest decade, Torres Miguel 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Torres Miguel 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES, in the dynamic environment Torres Miguel has struggled to respond to the nimble upstart competition. Torres Miguel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Torres Miguel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES, 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.
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 Torres Miguel supply chain. Even after few cautionary changes mentioned in the HBR case study - MIGUEL TORRES: ENSURING THE FAMILY LEGACIES, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Torres Miguel vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Torres Miguel 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.
Opportunities MIGUEL TORRES: ENSURING THE FAMILY LEGACIES | 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES are -
Building a culture of innovation
– managers at Torres Miguel 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.
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. Torres Miguel 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. Torres Miguel 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
– Torres Miguel 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.
Better consumer reach
– The expansion of the 5G network will help Torres Miguel to increase its market reach. Torres Miguel 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.
Creating value in data economy
– The success of analytics program of Torres Miguel has opened avenues for new revenue streams for the organization in the industry. This can help Torres Miguel to build a more holistic ecosystem as suggested in the MIGUEL TORRES: ENSURING THE FAMILY LEGACIES case study. Torres Miguel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Torres Miguel is facing challenges because of the dominance of functional experts in the organization. MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Torres Miguel 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, MIGUEL TORRES: ENSURING THE FAMILY LEGACIES, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Torres Miguel in the consumer business. Now Torres Miguel can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Torres Miguel can use these opportunities to build new business models that can help the communities that Torres Miguel operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Using analytics as competitive advantage
– Torres Miguel 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Torres Miguel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Torres Miguel 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.
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. Torres Miguel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Torres Miguel 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.
Threats MIGUEL TORRES: ENSURING THE FAMILY LEGACIES External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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. Torres Miguel needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Torres Miguel 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.
Regulatory challenges
– Torres Miguel 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
– Torres Miguel has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Torres Miguel needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Torres Miguel 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES .
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 Torres Miguel business can come under increasing regulations regarding data privacy, data security, etc.
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 Torres Miguel.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MIGUEL TORRES: ENSURING THE FAMILY LEGACIES, Torres Miguel 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 .
High dependence on third party suppliers
– Torres Miguel 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.
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. Torres Miguel 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.
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
– Torres Miguel 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. Torres Miguel can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 MIGUEL TORRES: ENSURING THE FAMILY LEGACIES 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 Torres Miguel needs to make to build a sustainable competitive advantage.
