E.I. du Pont de Nemours & Co.: Titanium Dioxide SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of E.I. du Pont de Nemours & Co.: Titanium Dioxide
Disequilibrium in the $350 million TiO2 market has prompted Du Pont's Pigments Department to develop two strategies for competing in this market in the future. The growth strategy has a smaller internal rate of return than the alternative strategy due to large capital outlays in early years and positive cash flows arising only in later years. However, it is the more valuable project on a net present value basis for all discount rates less than 21%. Students are faced with the task of converting strategic plans and objectives into free cash flow projections and determining a breakeven discount rate between these mutually exclusive projects. A decision about which strategy to pursue must then be made. Rewritten version of an earlier case by the same author.
Authors :: W. Carl Kester, Robert R. Glauber, David W. Mullins Jr., Stacy S. Dick
Swot Analysis of "E.I. du Pont de Nemours & Co.: Titanium Dioxide" written by W. Carl Kester, Robert R. Glauber, David W. Mullins Jr., Stacy S. Dick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Du Discount facing as an external strategic factors. Some of the topics covered in E.I. du Pont de Nemours & Co.: Titanium Dioxide case study are - Strategic Management Strategies, Budgeting, Forecasting, Growth strategy, Project management, Strategic planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the E.I. du Pont de Nemours & Co.: Titanium Dioxide casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of E.I. du Pont de Nemours & Co.: Titanium Dioxide
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in E.I. du Pont de Nemours & Co.: Titanium Dioxide case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Du Discount, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Du Discount 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide can be done for the following purposes –
1. Strategic planning using facts provided in E.I. du Pont de Nemours & Co.: Titanium Dioxide case study
2. Improving business portfolio management of Du Discount
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Du Discount
Strengths E.I. du Pont de Nemours & Co.: Titanium Dioxide | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Du Discount in E.I. du Pont de Nemours & Co.: Titanium Dioxide Harvard Business Review case study are -
Innovation driven organization
– Du Discount is one of the most innovative firm in sector. Manager in E.I. du Pont de Nemours & Co.: Titanium Dioxide Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Du Discount is one of the leading recruiters in the industry. Managers in the E.I. du Pont de Nemours & Co.: Titanium Dioxide are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Du Discount is present in almost all the verticals within the industry. This has provided firm in E.I. du Pont de Nemours & Co.: Titanium Dioxide 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.
Learning organization
- Du Discount 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 Du Discount is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in E.I. du Pont de Nemours & Co.: Titanium Dioxide Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Du Discount in the sector have low bargaining power. E.I. du Pont de Nemours & Co.: Titanium Dioxide has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Du Discount to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Du Discount 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.
Highly skilled collaborators
– Du Discount 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Du Discount
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Du Discount does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Du Discount in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the E.I. du Pont de Nemours & Co.: Titanium Dioxide 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.
Ability to lead change in Finance & Accounting field
– Du Discount 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 Du Discount in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Du Discount has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Du Discount 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of E.I. du Pont de Nemours & Co.: Titanium Dioxide are -
Increasing silos among functional specialists
– The organizational structure of Du Discount is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Du Discount needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Du Discount to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As E.I. du Pont de Nemours & Co.: Titanium Dioxide HBR case study mentions - Du Discount 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.
Need for greater diversity
– Du Discount 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study E.I. du Pont de Nemours & Co.: Titanium Dioxide, is just above the industry average. Du Discount 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.
Products dominated business model
– Even though Du Discount 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 - E.I. du Pont de Nemours & Co.: Titanium Dioxide should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Du Discount 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study E.I. du Pont de Nemours & Co.: Titanium Dioxide, in the dynamic environment Du Discount has struggled to respond to the nimble upstart competition. Du Discount has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Du Discount is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study E.I. du Pont de Nemours & Co.: Titanium Dioxide can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Du Discount has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Du Discount even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Du Discount 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 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 Du Discount supply chain. Even after few cautionary changes mentioned in the HBR case study - E.I. du Pont de Nemours & Co.: Titanium Dioxide, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Du Discount vulnerable to further global disruptions in South East Asia.
Opportunities E.I. du Pont de Nemours & Co.: Titanium Dioxide | 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Du Discount 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. Du Discount 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.
Manufacturing automation
– Du Discount can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Du Discount 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 Du Discount can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Du Discount 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 Finance & Accounting segment.
Developing new processes and practices
– Du Discount can develop new processes and procedures in Finance & Accounting 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Du Discount can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Du Discount 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Du Discount to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Du Discount can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. E.I. du Pont de Nemours & Co.: Titanium Dioxide 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Du Discount can use these opportunities to build new business models that can help the communities that Du Discount operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Better consumer reach
– The expansion of the 5G network will help Du Discount to increase its market reach. Du Discount 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.
Leveraging digital technologies
– Du Discount 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.
Loyalty marketing
– Du Discount 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study E.I. du Pont de Nemours & Co.: Titanium Dioxide are -
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. Du Discount 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.
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. Du Discount needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Du Discount in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Du Discount
– 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 Du Discount.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study E.I. du Pont de Nemours & Co.: Titanium Dioxide, Du Discount may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Consumer confidence and its impact on Du Discount 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.
High dependence on third party suppliers
– Du Discount 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.
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.
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 Du Discount.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Du Discount 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide .
Technology acceleration in Forth Industrial Revolution
– Du Discount has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Du Discount needs to keep up with the evolution of technology in the Finance & Accounting 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Du Discount can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of E.I. du Pont de Nemours & Co.: Titanium Dioxide 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide 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 E.I. du Pont de Nemours & Co.: Titanium Dioxide 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 Du Discount needs to make to build a sustainable competitive advantage.
