Forbes – Bake and Sell with Your SWOT

Apr 29, 2015

It’s moist, yellow sponge cake that stands to represent everything glorious and processed; the Twinkie.

Like it or not, Hostess has been a staple in American baked snacks for the better part of a century. They established themselves as a dominant super force in the land of baked goods. But sheer mismanagement, inefficiencies, and years of profits in the red resulted in the ovens shutting down in late 2012. It was a bitter end to the sweet treats.

Let’s fast forward to today. According to a recent article on Forbes, the company was rehabbed and brought back to life for just under 1 billion dollars. But, when you consider the type of brand prestige Hostess commands, it’s a pretty good bargain. Now, they’re producing the same output with one factory and 500 employees that they did with 14 plants and 9,000 employees.

Besides just being smart and efficient, the investors in the new parent company leveraged their SWOT analysis to create a business strategy that quite literally revived an iconic company from the dead. Here’s how they did it:

  1. They identified their SWOT Obviously, you have to complete a SWOT analysis before you can act on it. Hostess went to the drawing board and took a good look in the mirror as to both their shortcomings and successes as a company.
  2. They played off their strengths and opportunities – It sounds like Business 101, but Hostess knew they needed to play on their brand nostalgia and recognizable name to succeed.
  3. They created a strategy to shore up their weaknesses and maximize their strengths – This included making tough decisions, like cutting back on rehiring positions and not reopening every single factory they once owned.
  4. They acted on their new strategy, keeping their previous analysis in mind – In the execution phase of strategy, it’s easy to chart a new course that isn’t based on your previous analyses. However, Hostess knew they had to keep their strengths, weaknesses, opportunities, and threats close by for their strategy to succeed.

It seems like a simple process, but following these four steps can be more daunting than it appears on paper. Remaining vigilant to your SWOT analysis gives your strategy a realistic basis for what can be achieved. There’s nothing quite as sweet as success, except for maybe the inside of a Twinkie.

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