J D Wetherspoon (JDW) SWOT Analysis / TOWS Matrix / MBA Resources
Restaurants
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for J D Wetherspoon (United Kingdom)
Based on various researches at Oak Spring University , J D Wetherspoon is operating in a macro-environment that has been destablized by – geopolitical disruptions, cloud computing is disrupting traditional business models, there is backlash against globalization, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, wage bills are increasing, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that J D Wetherspoon can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the J D Wetherspoon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which J D Wetherspoon 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 J D Wetherspoon can be done for the following purposes –
1. Strategic planning of J D Wetherspoon
2. Improving business portfolio management of J D Wetherspoon
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of J D Wetherspoon
Strengths of J D Wetherspoon | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of J D Wetherspoon are -
Organizational Resilience of J D Wetherspoon
– The covid-19 pandemic has put organizational resilience at the centre of everthing J D Wetherspoon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Restaurants industry
- digital transformation varies from industry to industry. For J D Wetherspoon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. J D Wetherspoon 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.
Training and development
– J D Wetherspoon has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– J D Wetherspoon is one of the leading players in the Restaurants industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– J D Wetherspoon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. J D Wetherspoon 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 of J D Wetherspoon comprises – understanding the underlying the factors in the Restaurants 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 switching costs
– The high switching costs that J D Wetherspoon 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.
Diverse revenue streams
– J D Wetherspoon is present in almost all the verticals within the Restaurants industry. This has provided J D Wetherspoon 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.
Highly skilled collaborators
– J D Wetherspoon has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Restaurants industry. Secondly the value chain collaborators of J D Wetherspoon have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– J D Wetherspoon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled J D Wetherspoon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the J D Wetherspoon 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 in the Restaurants industry
– J D Wetherspoon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of J D Wetherspoon | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of J D Wetherspoon are -
Low market penetration in new markets
– Outside its home market of United Kingdom, J D Wetherspoon needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though J D Wetherspoon has some of the most successful models in the Restaurants industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. J D Wetherspoon should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at J D Wetherspoon, in the dynamic environment of Restaurants industry it has struggled to respond to the nimble upstart competition. J D Wetherspoon has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of J D Wetherspoon strategy
– From the outside it seems that the employees of J D Wetherspoon 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.
Skills based hiring in Restaurants industry
– The stress on hiring functional specialists at J D Wetherspoon 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.
High bargaining power of channel partners in Restaurants industry
– because of the regulatory requirements in United Kingdom, J D Wetherspoon 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 Restaurants industry.
Lack of clear differentiation of J D Wetherspoon products
– To increase the profitability and margins on the products, J D Wetherspoon needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As J D Wetherspoon is one of the leading players in the Restaurants industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Restaurants industry in last five years.
Aligning sales with marketing
– From the outside it seems that J D Wetherspoon needs to have more collaboration between its sales team and marketing team. Sales professionals in the Restaurants industry have deep experience in developing customer relationships. Marketing department at J D Wetherspoon can leverage the sales team experience to cultivate customer relationships as J D Wetherspoon is planning to shift buying processes online.
High operating costs
– Compare to the competitors, J D Wetherspoon has high operating costs in the Restaurants industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract J D Wetherspoon lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of J D Wetherspoon, it seems that company is thinking out the frontier risks that can impact Restaurants industry. 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.
J D Wetherspoon Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of J D Wetherspoon are -
Building a culture of innovation
– managers at J D Wetherspoon 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 Restaurants industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, J D Wetherspoon 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects J D Wetherspoon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, J D Wetherspoon is facing challenges because of the dominance of functional experts in the organization. J D Wetherspoon can utilize new technology in the field of Restaurants industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of J D Wetherspoon has opened avenues for new revenue streams for the organization in Restaurants industry. This can help J D Wetherspoon to build a more holistic ecosystem for J D Wetherspoon products in the Restaurants industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for J D Wetherspoon in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Restaurants industry, and it will provide faster access to the consumers.
Manufacturing automation
– J D Wetherspoon can use the latest technology developments to improve its manufacturing and designing process in Restaurants sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Buying journey improvements
– J D Wetherspoon can improve the customer journey of consumers in the Restaurants industry by using analytics and artificial intelligence. It 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.
Loyalty marketing
– J D Wetherspoon 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 Restaurants industry, but it has also influenced the consumer preferences. J D Wetherspoon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for J D Wetherspoon 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 J D Wetherspoon to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– J D Wetherspoon has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Restaurants sector. This continuous investment in analytics has enabled J D Wetherspoon to build a competitive advantage using analytics. The analytics driven competitive advantage can help J D Wetherspoon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, J D Wetherspoon 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 J D Wetherspoon to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats J D Wetherspoon External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of J D Wetherspoon 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.
Technology acceleration in Forth Industrial Revolution
– J D Wetherspoon has witnessed rapid integration of technology during Covid-19 in the Restaurants industry. As one of the leading players in the industry, J D Wetherspoon needs to keep up with the evolution of technology in the Restaurants 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for J D Wetherspoon in Restaurants industry. The Restaurants 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.
High dependence on third party suppliers
– J D Wetherspoon 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
– J D Wetherspoon 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 Restaurants industry regulations.
Easy access to finance
– Easy access to finance in Restaurants industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. J D Wetherspoon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Restaurants industry are lowering. It can presents J D Wetherspoon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Restaurants sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, J D Wetherspoon 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 J D Wetherspoon prominent markets.
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 J D Wetherspoon in the Restaurants sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that J D Wetherspoon is facing in Restaurants sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, J D Wetherspoon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Restaurants sector.
Increasing wage structure of J D Wetherspoon
– 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 J D Wetherspoon.
Stagnating economy with rate increase
– J D Wetherspoon 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 Restaurants industry.
Weighted SWOT Analysis of J D Wetherspoon Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at J D Wetherspoon 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 J D Wetherspoon 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 J D Wetherspoon 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 J D Wetherspoon 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 J D Wetherspoon needs to make to build a sustainable competitive advantage.
