Case Study Description of Reliance Baking Soda: Optimizing Promotional Spending (Brief Case)
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.Reliance Baking Soda is Stewart Corporation's oldest and most established product. The new Domestic Brand Director needs to create a 2008 marketing budget that delivers a profit increase of 10% over 2007 levels. She must first evaluate the effectiveness of past consumer and trade promotions and determine if a price increase will have net bottom line benefits. Then she must decide on the optimal allocation of her marketing budget, taking into account the brand's apparent "cash cow" role in the Household Division of Stewart Corporation. Students are expected to complete a quantitative assignment: create and defend a budget.
Swot Analysis of "Reliance Baking Soda: Optimizing Promotional Spending (Brief Case)" written by John A. Quelch, Heather Beckham includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Soda Baking facing as an external strategic factors. Some of the topics covered in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) case study are - Strategic Management Strategies, Budgeting, Communication, Marketing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Reliance Baking Soda: Optimizing Promotional Spending (Brief Case)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Soda Baking, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Soda Baking 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) can be done for the following purposes –
1. Strategic planning using facts provided in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) case study
2. Improving business portfolio management of Soda Baking
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 Soda Baking
Strengths Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Soda Baking in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) Harvard Business Review case study are -
Diverse revenue streams
– Soda Baking is present in almost all the verticals within the industry. This has provided firm in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Soda Baking digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Soda Baking 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.
Organizational Resilience of Soda Baking
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Soda Baking does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Soda Baking 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.
Low bargaining power of suppliers
– Suppliers of Soda Baking in the sector have low bargaining power. Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Soda Baking to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Soda Baking has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Soda Baking to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Soda Baking 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
– Soda Baking 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Soda Baking is one of the most innovative firm in sector. Manager in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Sales & Marketing industry
– Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) firm has clearly differentiated products in the market place. This has enabled Soda Baking to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Soda Baking to invest into research and development (R&D) and innovation.
Learning organization
- Soda Baking 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 Soda Baking is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Soda Baking has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) are -
Workers concerns about automation
– As automation is fast increasing in the segment, Soda Baking 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Soda Baking is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Soda Baking is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Soda Baking needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Soda Baking to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Soda Baking, firm in the HBR case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case), is just above the industry average. Soda Baking 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.
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 Soda Baking supply chain. Even after few cautionary changes mentioned in the HBR case study - Reliance Baking Soda: Optimizing Promotional Spending (Brief Case), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Soda Baking vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Soda Baking 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 - Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case), it seems that the employees of Soda Baking 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.
Aligning sales with marketing
– It come across in the case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) can leverage the sales team experience to cultivate customer relationships as Soda Baking is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, Heather Beckham suggests that, Soda Baking 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.
Capital Spending Reduction
– Even during the low interest decade, Soda Baking 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.
Opportunities Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) | 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) are -
Creating value in data economy
– The success of analytics program of Soda Baking has opened avenues for new revenue streams for the organization in the industry. This can help Soda Baking to build a more holistic ecosystem as suggested in the Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) case study. Soda Baking can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Soda Baking can develop new processes and procedures in Sales & Marketing 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.
Buying journey improvements
– Soda Baking can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Soda Baking can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Soda Baking 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Soda Baking to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Soda Baking can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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
– Soda Baking 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Soda Baking 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. Soda Baking 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Soda Baking in the consumer business. Now Soda Baking can target international markets with far fewer capital restrictions requirements than the existing system.
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. Soda Baking can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Soda Baking 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Soda Baking 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.
Better consumer reach
– The expansion of the 5G network will help Soda Baking to increase its market reach. Soda Baking 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.
Threats Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) are -
Consumer confidence and its impact on Soda Baking 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Soda Baking with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Soda Baking.
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. Soda Baking needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Soda Baking has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Soda Baking 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Soda Baking 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) .
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 Soda Baking in the Sales & Marketing sector and impact the bottomline of the organization.
Regulatory challenges
– Soda Baking 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 Sales & Marketing industry regulations.
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. Soda Baking 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.
Stagnating economy with rate increase
– Soda Baking 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case), Soda Baking may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Shortening product life cycle
– it is one of the major threat that Soda Baking is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Soda Baking needs to make to build a sustainable competitive advantage.
