Case Study Description of V-Cola: General Instructions
V-Cola is a six-party exercise that simulates a negotiation between a boutique advertising agency and a beverage company that is launching a new product. Each of the six parties has different incentives and information, which leads to a complex, realistic simulation about agency issues, misaligned incentives, and the (mis)use of contingent contracts.
Swot Analysis of "V-Cola: General Instructions" written by Ian I. Larkin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cola Incentives facing as an external strategic factors. Some of the topics covered in V-Cola: General Instructions case study are - Strategic Management Strategies, Knowledge management, Marketing, Negotiations, Risk management and Communication.
Some of the macro environment factors that can be used to understand the V-Cola: General Instructions casestudy better are - – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, technology disruption, increasing commodity prices, geopolitical disruptions, there is increasing trade war between United States & China, there is backlash against globalization,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of V-Cola: General Instructions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in V-Cola: General Instructions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cola Incentives, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cola Incentives 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 V-Cola: General Instructions can be done for the following purposes –
1. Strategic planning using facts provided in V-Cola: General Instructions case study
2. Improving business portfolio management of Cola Incentives
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cola Incentives
Strengths V-Cola: General Instructions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cola Incentives in V-Cola: General Instructions Harvard Business Review case study are -
Ability to recruit top talent
– Cola Incentives is one of the leading recruiters in the industry. Managers in the V-Cola: General Instructions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Cola Incentives 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 Cola Incentives is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in V-Cola: General Instructions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Communication field
– Cola Incentives 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 Cola Incentives in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Cola Incentives is present in almost all the verticals within the industry. This has provided firm in V-Cola: General Instructions 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.
Successful track record of launching new products
– Cola Incentives has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cola Incentives 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.
Operational resilience
– The operational resilience strategy in the V-Cola: General Instructions 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.
High brand equity
– Cola Incentives has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cola Incentives to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Cola Incentives has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Cola Incentives digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cola Incentives 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.
Effective Research and Development (R&D)
– Cola Incentives 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 V-Cola: General Instructions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Cola Incentives in the sector have low bargaining power. V-Cola: General Instructions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cola Incentives to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Cola Incentives has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in V-Cola: General Instructions 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 V-Cola: General Instructions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of V-Cola: General Instructions are -
Slow to strategic competitive environment developments
– As V-Cola: General Instructions HBR case study mentions - Cola Incentives 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.
Increasing silos among functional specialists
– The organizational structure of Cola Incentives is dominated by functional specialists. It is not different from other players in the Communication segment. Cola Incentives needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cola Incentives to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Cola Incentives 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 V-Cola: General Instructions 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 Cola Incentives has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Cola Incentives 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.
Aligning sales with marketing
– It come across in the case study V-Cola: General Instructions 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 V-Cola: General Instructions can leverage the sales team experience to cultivate customer relationships as Cola Incentives is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Cola Incentives, firm in the HBR case study V-Cola: General Instructions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Cola Incentives 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study V-Cola: General Instructions, is just above the industry average. Cola Incentives 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 V-Cola: General Instructions 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 Cola Incentives 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Cola Incentives 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. Cola Incentives 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.
Opportunities V-Cola: General Instructions | 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 V-Cola: General Instructions are -
Buying journey improvements
– Cola Incentives can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. V-Cola: General Instructions 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cola Incentives can use these opportunities to build new business models that can help the communities that Cola Incentives operates in. Secondly it can use opportunities from government spending in Communication sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cola Incentives 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, V-Cola: General Instructions, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Cola Incentives can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Cola Incentives 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cola Incentives 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cola Incentives 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. Cola Incentives 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cola Incentives can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Cola Incentives can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Cola Incentives 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 Communication segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cola Incentives is facing challenges because of the dominance of functional experts in the organization. V-Cola: General Instructions 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cola Incentives in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication segment, and it will provide faster access to the consumers.
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 Cola Incentives 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.
Threats V-Cola: General Instructions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study V-Cola: General Instructions are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cola Incentives in the Communication industry. The Communication 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.
Shortening product life cycle
– it is one of the major threat that Cola Incentives is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Cola Incentives 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.
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 Cola Incentives 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.
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 Cola Incentives in the Communication sector and impact the bottomline 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 V-Cola: General Instructions, Cola Incentives may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Increasing wage structure of Cola Incentives
– 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 Cola Incentives.
Environmental challenges
– Cola Incentives 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. Cola Incentives can take advantage of this fund but it will also bring new competitors in the Communication industry.
High dependence on third party suppliers
– Cola Incentives 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.
Regulatory challenges
– Cola Incentives 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 Communication industry regulations.
Stagnating economy with rate increase
– Cola Incentives 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 V-Cola: General Instructions 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 V-Cola: General Instructions 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 V-Cola: General Instructions 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 V-Cola: General Instructions 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 V-Cola: General Instructions 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 Cola Incentives needs to make to build a sustainable competitive advantage.