WD-40 Company: The Squeak, Smell, and Dirt Business (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of WD-40 Company: The Squeak, Smell, and Dirt Business (B)
In the fall of 1999 Garry Ridge, the newly appointed CEO of WD-40 Company, wanted to rejuvenate the company and stimulate its employees to look beyond the firm's relatively narrow focus of the last 43 years. The very nature of WD-40 Company's success in capturing the market had created its own limited growth opportunities. The A case describes the company's one-product business success, and Ridge's background. The B case reveals some of the challenges Ridge faced in implementing change. The B case tells how the new CEO helped WD-40 company achieve growth in both new products and markets through related acquisitions. Despite these purchases, though, the company's earnings failed to climb in the years between 1998 and 2001. Ridge concluded that he needed to do more than just buy more companies, so he framed a model of strong leadership and "learning theory" that he thought would enable the company outsmart its competitors. He built a framework that was demanding, yet forgiving, when individuals fell short. Ridge held employees responsible for their results, but he encouraged everyone to acknowledge mistakes and learn from them. The company's financial results suggest success for his leadership model. This case set lends instructors a valuable tool to conduct conversations in the classroom about leadership and leading strategic change.
Authors :: Gerry Yemen, James G. Clawson, Marcia Conner
Swot Analysis of "WD-40 Company: The Squeak, Smell, and Dirt Business (B)" written by Gerry Yemen, James G. Clawson, Marcia Conner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wd Ridge facing as an external strategic factors. Some of the topics covered in WD-40 Company: The Squeak, Smell, and Dirt Business (B) case study are - Strategic Management Strategies, Knowledge management, Marketing, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the WD-40 Company: The Squeak, Smell, and Dirt Business (B) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels,
increasing commodity prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of WD-40 Company: The Squeak, Smell, and Dirt Business (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in WD-40 Company: The Squeak, Smell, and Dirt Business (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wd Ridge, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wd Ridge 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) can be done for the following purposes –
1. Strategic planning using facts provided in WD-40 Company: The Squeak, Smell, and Dirt Business (B) case study
2. Improving business portfolio management of Wd Ridge
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 Wd Ridge
Strengths WD-40 Company: The Squeak, Smell, and Dirt Business (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wd Ridge in WD-40 Company: The Squeak, Smell, and Dirt Business (B) Harvard Business Review case study are -
Ability to recruit top talent
– Wd Ridge is one of the leading recruiters in the industry. Managers in the WD-40 Company: The Squeak, Smell, and Dirt Business (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Wd Ridge 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.
High brand equity
– Wd Ridge has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wd Ridge to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Wd Ridge 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Wd Ridge has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wd Ridge 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.
Analytics focus
– Wd Ridge 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 industry. The technology infrastructure suggested by Gerry Yemen, James G. Clawson, Marcia Conner can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Wd Ridge 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.
Diverse revenue streams
– Wd Ridge is present in almost all the verticals within the industry. This has provided firm in WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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.
Innovation driven organization
– Wd Ridge is one of the most innovative firm in sector. Manager in WD-40 Company: The Squeak, Smell, and Dirt Business (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Wd Ridge
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wd Ridge does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Organizational Development industry
– WD-40 Company: The Squeak, Smell, and Dirt Business (B) firm has clearly differentiated products in the market place. This has enabled Wd Ridge to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Wd Ridge to invest into research and development (R&D) and innovation.
Learning organization
- Wd Ridge 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 Wd Ridge is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in WD-40 Company: The Squeak, Smell, and Dirt Business (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses WD-40 Company: The Squeak, Smell, and Dirt Business (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of WD-40 Company: The Squeak, Smell, and Dirt Business (B) are -
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 Wd Ridge supply chain. Even after few cautionary changes mentioned in the HBR case study - WD-40 Company: The Squeak, Smell, and Dirt Business (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wd Ridge vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wd Ridge is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study WD-40 Company: The Squeak, Smell, and Dirt Business (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Wd Ridge has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - WD-40 Company: The Squeak, Smell, and Dirt Business (B) should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Wd Ridge 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.
Interest costs
– Compare to the competition, Wd Ridge 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 cash cycle compare to competitors
Wd Ridge has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Wd Ridge 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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 Wd Ridge has relatively successful track record of launching new products.
Lack of clear differentiation of Wd Ridge products
– To increase the profitability and margins on the products, Wd Ridge needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As WD-40 Company: The Squeak, Smell, and Dirt Business (B) HBR case study mentions - Wd Ridge 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study WD-40 Company: The Squeak, Smell, and Dirt Business (B), is just above the industry average. Wd Ridge 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.
Opportunities WD-40 Company: The Squeak, Smell, and Dirt Business (B) | 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) are -
Manufacturing automation
– Wd Ridge 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.
Leveraging digital technologies
– Wd Ridge 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.
Better consumer reach
– The expansion of the 5G network will help Wd Ridge to increase its market reach. Wd Ridge 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 Wd Ridge 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 Wd Ridge to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wd Ridge 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, WD-40 Company: The Squeak, Smell, and Dirt Business (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Wd Ridge 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Wd Ridge can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wd Ridge can use these opportunities to build new business models that can help the communities that Wd Ridge operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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 Wd Ridge 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.
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. Wd Ridge 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. Wd Ridge 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wd Ridge in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Wd Ridge 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.
Creating value in data economy
– The success of analytics program of Wd Ridge has opened avenues for new revenue streams for the organization in the industry. This can help Wd Ridge to build a more holistic ecosystem as suggested in the WD-40 Company: The Squeak, Smell, and Dirt Business (B) case study. Wd Ridge can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats WD-40 Company: The Squeak, Smell, and Dirt Business (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study WD-40 Company: The Squeak, Smell, and Dirt Business (B) are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wd Ridge can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Wd Ridge 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.
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.
Technology acceleration in Forth Industrial Revolution
– Wd Ridge has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Wd Ridge 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wd Ridge with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wd Ridge 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 prominent markets illustrated in HBR case study WD-40 Company: The Squeak, Smell, and Dirt Business (B) .
Regulatory challenges
– Wd Ridge 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.
Consumer confidence and its impact on Wd Ridge 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.
Environmental challenges
– Wd Ridge 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. Wd Ridge can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing wage structure of Wd Ridge
– 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 Wd Ridge.
Stagnating economy with rate increase
– Wd Ridge 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.
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 Wd Ridge business can come under increasing regulations regarding data privacy, data security, etc.
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 Wd Ridge in the Organizational Development sector and impact the bottomline of the organization.
Weighted SWOT Analysis of WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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 WD-40 Company: The Squeak, Smell, and Dirt Business (B) 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 Wd Ridge needs to make to build a sustainable competitive advantage.