New Age Beverages (NBEV) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for New Age Beverages (United States)

Based on various researches at Oak Spring University , New Age Beverages is operating in a macro-environment that has been destablized by – increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of New Age Beverages

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that New Age Beverages can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the New Age Beverages, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which New Age Beverages 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of New Age Beverages can be done for the following purposes –
1. Strategic planning of New Age Beverages
2. Improving business portfolio management of New Age Beverages
3. Assessing feasibility of the new initiative in United States
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of New Age Beverages

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Strengths of New Age Beverages | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of New Age Beverages are -

Analytics focus

– New Age Beverages 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 Beverages (Alcoholic) industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Low bargaining power of suppliers

– Suppliers of New Age Beverages in the Consumer/Non-Cyclical sector have low bargaining power. New Age Beverages has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps New Age Beverages to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the New Age Beverages 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.

Digital Transformation in Beverages (Alcoholic) industry

- digital transformation varies from industry to industry. For New Age Beverages digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. New Age Beverages 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.

Organizational Resilience of New Age Beverages

– The covid-19 pandemic has put organizational resilience at the centre of everthing New Age Beverages does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

High switching costs

– The high switching costs that New Age Beverages 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.

Ability to lead change in Beverages (Alcoholic)

– New Age Beverages is one of the leading players in the Beverages (Alcoholic) industry in United States. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in United States but also across the existing markets. The ability to lead change has enabled New Age Beverages in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High brand equity

– New Age Beverages has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled New Age Beverages to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to recruit top talent

– New Age Beverages is one of the leading players in the Beverages (Alcoholic) industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.

Learning organization

- New Age Beverages 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 New Age Beverages is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at New Age Beverages emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– New Age Beverages has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. New Age Beverages 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.

Superior customer experience

– The customer experience strategy of New Age Beverages in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses of New Age Beverages | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of New Age Beverages are -

Employees’ less understanding of New Age Beverages strategy

– From the outside it seems that the employees of New Age Beverages 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.

Need for greater diversity

– New Age Beverages 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.

Slow to strategic competitive environment developments

– As New Age Beverages is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.

Low market penetration in new markets

– Outside its home market of United States, New Age Beverages needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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 New Age Beverages supply chain. Even after few cautionary changes, New Age Beverages is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left New Age Beverages vulnerable to further global disruptions in South East Asia.

High operating costs

– Compare to the competitors, New Age Beverages has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract New Age Beverages lucrative customers.

Skills based hiring in Beverages (Alcoholic) industry

– The stress on hiring functional specialists at New Age Beverages 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.

Increasing silos among functional specialists

– The organizational structure of New Age Beverages is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but New Age Beverages needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help New Age Beverages to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative at New Age Beverages, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. New Age Beverages has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Interest costs

– Compare to the competition, New Age Beverages 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, New Age Beverages is slow explore the new channels of communication. These new channels of communication can help New Age Beverages to provide better information regarding Beverages (Alcoholic) products and services. It can also build an online community to further reach out to potential customers.

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New Age Beverages Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of New Age Beverages are -

Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for New Age Beverages in the Beverages (Alcoholic) industry. Now New Age Beverages can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– New Age Beverages has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled New Age Beverages to build a competitive advantage using analytics. The analytics driven competitive advantage can help New Age Beverages to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, New Age Beverages can use these opportunities to build new business models that can help the communities that New Age Beverages operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.

Loyalty marketing

– New Age Beverages 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.

Better consumer reach

– The expansion of the 5G network will help New Age Beverages to increase its market reach. New Age Beverages 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for New Age Beverages 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 New Age Beverages to hire the very best people irrespective of their geographical location.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. New Age Beverages can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, New Age Beverages 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 New Age Beverages to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Manufacturing automation

– New Age Beverages can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects New Age Beverages can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Lowering marketing communication costs

– 5G expansion will open new opportunities for New Age Beverages in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, 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. New Age Beverages can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. New Age Beverages 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. New Age Beverages 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.

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Threats New Age Beverages External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of New Age Beverages are -

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 New Age Beverages.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents New Age Beverages with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.

Environmental challenges

– New Age Beverages 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. New Age Beverages can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.

High dependence on third party suppliers

– New Age Beverages 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.

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 New Age Beverages in the Beverages (Alcoholic) sector and impact the bottomline of the organization.

Consumer confidence and its impact on New Age Beverages demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Beverages (Alcoholic) industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, New Age Beverages may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for New Age Beverages in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.

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 New Age Beverages business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that New Age Beverages is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of New Age Beverages

– 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 New Age Beverages.

Regulatory challenges

– New Age Beverages 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 Beverages (Alcoholic) industry regulations.

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.

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Weighted SWOT Analysis of New Age Beverages Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at New Age Beverages 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 New Age Beverages 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 New Age Beverages 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 New Age Beverages 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 New Age Beverages needs to make to build a sustainable competitive advantage.

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