Case Study Description of Colgate-Palmolive Co.: The Precision Toothbrush
Colgate-Palmolive Co. is considering how to position its new technological toothbrush, Precision. The case explores issues concerned with new product launches and requires students to do profitability analyses of different positioning alternatives.
Swot Analysis of "Colgate-Palmolive Co.: The Precision Toothbrush" written by John A. Quelch, Nathalie Laidler includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toothbrush Colgate facing as an external strategic factors. Some of the topics covered in Colgate-Palmolive Co.: The Precision Toothbrush case study are - Strategic Management Strategies, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Colgate-Palmolive Co.: The Precision Toothbrush casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, technology disruption, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, central banks are concerned over increasing inflation,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Colgate-Palmolive Co.: The Precision Toothbrush
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Colgate-Palmolive Co.: The Precision Toothbrush case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toothbrush Colgate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toothbrush Colgate 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 Colgate-Palmolive Co.: The Precision Toothbrush can be done for the following purposes –
1. Strategic planning using facts provided in Colgate-Palmolive Co.: The Precision Toothbrush case study
2. Improving business portfolio management of Toothbrush Colgate
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Toothbrush Colgate
Strengths Colgate-Palmolive Co.: The Precision Toothbrush | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toothbrush Colgate in Colgate-Palmolive Co.: The Precision Toothbrush Harvard Business Review case study are -
High brand equity
– Toothbrush Colgate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Toothbrush Colgate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Toothbrush Colgate 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 Toothbrush Colgate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Colgate-Palmolive Co.: The Precision Toothbrush Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Toothbrush Colgate is one of the most innovative firm in sector. Manager in Colgate-Palmolive Co.: The Precision Toothbrush 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
– Toothbrush Colgate is one of the leading recruiters in the industry. Managers in the Colgate-Palmolive Co.: The Precision Toothbrush are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– Colgate-Palmolive Co.: The Precision Toothbrush firm has clearly differentiated products in the market place. This has enabled Toothbrush Colgate to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Toothbrush Colgate to invest into research and development (R&D) and innovation.
Strong track record of project management
– Toothbrush Colgate is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Toothbrush Colgate digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Toothbrush Colgate 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.
Superior customer experience
– The customer experience strategy of Toothbrush Colgate in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Toothbrush Colgate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Toothbrush Colgate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Toothbrush Colgate 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 John A. Quelch, Nathalie Laidler 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.
Effective Research and Development (R&D)
– Toothbrush Colgate 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 Colgate-Palmolive Co.: The Precision Toothbrush - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Toothbrush Colgate in the sector have low bargaining power. Colgate-Palmolive Co.: The Precision Toothbrush has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Toothbrush Colgate to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Colgate-Palmolive Co.: The Precision Toothbrush | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colgate-Palmolive Co.: The Precision Toothbrush are -
Interest costs
– Compare to the competition, Toothbrush Colgate 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 bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, Nathalie Laidler suggests that, Toothbrush Colgate 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.
Slow decision making process
– As mentioned earlier in the report, Toothbrush Colgate 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. Toothbrush Colgate 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Colgate-Palmolive Co.: The Precision Toothbrush 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 Toothbrush Colgate 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Toothbrush Colgate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Colgate-Palmolive Co.: The Precision Toothbrush can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Colgate-Palmolive Co.: The Precision Toothbrush, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Products dominated business model
– Even though Toothbrush Colgate 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 - Colgate-Palmolive Co.: The Precision Toothbrush should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Colgate-Palmolive Co.: The Precision Toothbrush, it seems that the employees of Toothbrush Colgate 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.
Capital Spending Reduction
– Even during the low interest decade, Toothbrush Colgate 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.
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 Toothbrush Colgate supply chain. Even after few cautionary changes mentioned in the HBR case study - Colgate-Palmolive Co.: The Precision Toothbrush, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Toothbrush Colgate vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Toothbrush Colgate is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Toothbrush Colgate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Toothbrush Colgate to focus more on services rather than just following the product oriented approach.
Opportunities Colgate-Palmolive Co.: The Precision Toothbrush | 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 Colgate-Palmolive Co.: The Precision Toothbrush are -
Better consumer reach
– The expansion of the 5G network will help Toothbrush Colgate to increase its market reach. Toothbrush Colgate 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.
Using analytics as competitive advantage
– Toothbrush Colgate 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 Colgate-Palmolive Co.: The Precision Toothbrush - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Toothbrush Colgate to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Toothbrush Colgate 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toothbrush Colgate 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.
Learning at scale
– Online learning technologies has now opened space for Toothbrush Colgate to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Toothbrush Colgate can use these opportunities to build new business models that can help the communities that Toothbrush Colgate operates in. Secondly it can use opportunities from government spending in Sales & Marketing 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 Toothbrush Colgate 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Toothbrush Colgate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Toothbrush Colgate can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Colgate-Palmolive Co.: The Precision Toothbrush 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.
Loyalty marketing
– Toothbrush Colgate 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.
Creating value in data economy
– The success of analytics program of Toothbrush Colgate has opened avenues for new revenue streams for the organization in the industry. This can help Toothbrush Colgate to build a more holistic ecosystem as suggested in the Colgate-Palmolive Co.: The Precision Toothbrush case study. Toothbrush Colgate can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toothbrush Colgate in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Toothbrush Colgate 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, Colgate-Palmolive Co.: The Precision Toothbrush, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Colgate-Palmolive Co.: The Precision Toothbrush External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Colgate-Palmolive Co.: The Precision Toothbrush are -
Consumer confidence and its impact on Toothbrush Colgate 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
– Toothbrush Colgate 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Toothbrush Colgate in the Sales & Marketing industry. The Sales & Marketing 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.
Environmental challenges
– Toothbrush Colgate 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. Toothbrush Colgate can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Toothbrush Colgate.
Technology acceleration in Forth Industrial Revolution
– Toothbrush Colgate has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Toothbrush Colgate needs to keep up with the evolution of technology in the Sales & Marketing 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.
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.
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. Toothbrush Colgate 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.
Increasing wage structure of Toothbrush Colgate
– 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 Toothbrush Colgate.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Toothbrush Colgate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Toothbrush Colgate in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Toothbrush Colgate 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 Colgate-Palmolive Co.: The Precision Toothbrush .
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.
Weighted SWOT Analysis of Colgate-Palmolive Co.: The Precision Toothbrush 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 Colgate-Palmolive Co.: The Precision Toothbrush 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 Colgate-Palmolive Co.: The Precision Toothbrush 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 Colgate-Palmolive Co.: The Precision Toothbrush 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 Colgate-Palmolive Co.: The Precision Toothbrush 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 Toothbrush Colgate needs to make to build a sustainable competitive advantage.
