Case Study Description of Executive Remuneration at Reckitt Benckiser plc.
Reckitt Benckiser plc has developed an executive compensation system. This case outlines the structure of the system, its emphasis on performance-based pay and a global outlook, and explains the role of the human resources department, the board of directors, and company shareholders in determining pay. It raises questions about how to balance incentive remuneration effectively in recruiting and retaining top managers, while addressing shareholder concerns about executive compensation.
Authors :: Jay W. Lorsch, V.G. Narayanan, Krishna G. Palepu, Lisa Brem
Swot Analysis of "Executive Remuneration at Reckitt Benckiser plc." written by Jay W. Lorsch, V.G. Narayanan, Krishna G. Palepu, Lisa Brem includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Benckiser Reckitt facing as an external strategic factors. Some of the topics covered in Executive Remuneration at Reckitt Benckiser plc. case study are - Strategic Management Strategies, Corporate communications, Human resource management and Organizational Development.
Some of the macro environment factors that can be used to understand the Executive Remuneration at Reckitt Benckiser plc. casestudy better are - – talent flight as more people leaving formal jobs, there is backlash against globalization, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, etc
Introduction to SWOT Analysis of Executive Remuneration at Reckitt Benckiser plc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Executive Remuneration at Reckitt Benckiser plc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Benckiser Reckitt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Benckiser Reckitt 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 Executive Remuneration at Reckitt Benckiser plc. can be done for the following purposes –
1. Strategic planning using facts provided in Executive Remuneration at Reckitt Benckiser plc. case study
2. Improving business portfolio management of Benckiser Reckitt
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Benckiser Reckitt
Strengths Executive Remuneration at Reckitt Benckiser plc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Benckiser Reckitt in Executive Remuneration at Reckitt Benckiser plc. Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Benckiser Reckitt in the sector have low bargaining power. Executive Remuneration at Reckitt Benckiser plc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Benckiser Reckitt to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Organizational Development field
– Benckiser Reckitt 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 Benckiser Reckitt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Benckiser Reckitt 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 Executive Remuneration at Reckitt Benckiser plc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Benckiser Reckitt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Benckiser Reckitt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Executive Remuneration at Reckitt Benckiser plc. 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.
Highly skilled collaborators
– Benckiser Reckitt 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 Executive Remuneration at Reckitt Benckiser plc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Benckiser Reckitt 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.
Sustainable margins compare to other players in Organizational Development industry
– Executive Remuneration at Reckitt Benckiser plc. firm has clearly differentiated products in the market place. This has enabled Benckiser Reckitt to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Benckiser Reckitt to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Benckiser Reckitt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Benckiser Reckitt is present in almost all the verticals within the industry. This has provided firm in Executive Remuneration at Reckitt Benckiser plc. 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.
High switching costs
– The high switching costs that Benckiser Reckitt 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.
Successful track record of launching new products
– Benckiser Reckitt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Benckiser Reckitt 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 Executive Remuneration at Reckitt Benckiser plc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Executive Remuneration at Reckitt Benckiser plc. are -
Increasing silos among functional specialists
– The organizational structure of Benckiser Reckitt is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Benckiser Reckitt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Benckiser Reckitt to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Benckiser Reckitt, firm in the HBR case study Executive Remuneration at Reckitt Benckiser plc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Executive Remuneration at Reckitt Benckiser plc., it seems that company is thinking about the frontier risks that can impact Organizational Development 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 star products
– The top 2 products and services of the firm as mentioned in the Executive Remuneration at Reckitt Benckiser plc. 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 Benckiser Reckitt has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Benckiser Reckitt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Executive Remuneration at Reckitt Benckiser plc. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Benckiser Reckitt 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jay W. Lorsch, V.G. Narayanan, Krishna G. Palepu, Lisa Brem suggests that, Benckiser Reckitt 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 industry.
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 Benckiser Reckitt supply chain. Even after few cautionary changes mentioned in the HBR case study - Executive Remuneration at Reckitt Benckiser plc., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Benckiser Reckitt vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Benckiser Reckitt 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.
Aligning sales with marketing
– It come across in the case study Executive Remuneration at Reckitt Benckiser plc. 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 Executive Remuneration at Reckitt Benckiser plc. can leverage the sales team experience to cultivate customer relationships as Benckiser Reckitt is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Executive Remuneration at Reckitt Benckiser plc. 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 Benckiser Reckitt 's lucrative customers.
Opportunities Executive Remuneration at Reckitt Benckiser plc. | 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 Executive Remuneration at Reckitt Benckiser plc. are -
Manufacturing automation
– Benckiser Reckitt can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. 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.
Using analytics as competitive advantage
– Benckiser Reckitt 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 Executive Remuneration at Reckitt Benckiser plc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Benckiser Reckitt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Benckiser Reckitt 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. Benckiser Reckitt 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Benckiser Reckitt is facing challenges because of the dominance of functional experts in the organization. Executive Remuneration at Reckitt Benckiser plc. 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.
Creating value in data economy
– The success of analytics program of Benckiser Reckitt has opened avenues for new revenue streams for the organization in the industry. This can help Benckiser Reckitt to build a more holistic ecosystem as suggested in the Executive Remuneration at Reckitt Benckiser plc. case study. Benckiser Reckitt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Benckiser Reckitt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Benckiser Reckitt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Benckiser Reckitt 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, Executive Remuneration at Reckitt Benckiser plc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Benckiser Reckitt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Executive Remuneration at Reckitt Benckiser plc. 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.
Developing new processes and practices
– Benckiser Reckitt can develop new processes and procedures in Organizational Development 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.
Building a culture of innovation
– managers at Benckiser Reckitt 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 Organizational Development segment.
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 Benckiser Reckitt 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.
Loyalty marketing
– Benckiser Reckitt 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.
Threats Executive Remuneration at Reckitt Benckiser plc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Executive Remuneration at Reckitt Benckiser plc. are -
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 Benckiser Reckitt in the Organizational Development sector and impact the bottomline of the organization.
Environmental challenges
– Benckiser Reckitt 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. Benckiser Reckitt can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Technology acceleration in Forth Industrial Revolution
– Benckiser Reckitt has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Benckiser Reckitt needs to keep up with the evolution of technology in the Organizational Development 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 wage structure of Benckiser Reckitt
– 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 Benckiser Reckitt.
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. Benckiser Reckitt 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.
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 Benckiser Reckitt business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Benckiser Reckitt 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 the industry and other sectors.
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 Benckiser Reckitt.
Regulatory challenges
– Benckiser Reckitt 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 Organizational Development industry regulations.
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.
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. Benckiser Reckitt needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Benckiser Reckitt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Executive Remuneration at Reckitt Benckiser plc. 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 Executive Remuneration at Reckitt Benckiser plc. 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 Executive Remuneration at Reckitt Benckiser plc. 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 Executive Remuneration at Reckitt Benckiser plc. 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 Executive Remuneration at Reckitt Benckiser plc. 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 Benckiser Reckitt needs to make to build a sustainable competitive advantage.
