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 - – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
increasing commodity prices, cloud computing is disrupting traditional business models, 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 -
Successful track record of launching new products
– Soda Baking has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Soda Baking 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.
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.
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.
Effective Research and Development (R&D)
– Soda Baking 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 Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Soda Baking is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Soda Baking in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Soda Baking 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 Soda Baking in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Soda Baking is one of the leading recruiters in the industry. Managers in the Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Soda Baking 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, Heather Beckham 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.
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.
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.
Operational resilience
– The operational resilience strategy in the Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) 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 Soda Baking 's lucrative customers.
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.
High cash cycle compare to competitors
Soda Baking 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Reliance Baking Soda: Optimizing Promotional Spending (Brief Case), 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.
Slow decision making process
– As mentioned earlier in the report, Soda Baking 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. Soda Baking 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 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.
Skills based hiring
– The stress on hiring functional specialists at Soda Baking 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.
Slow to strategic competitive environment developments
– As Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) HBR case study mentions - Soda Baking 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.
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.
Lack of clear differentiation of Soda Baking products
– To increase the profitability and margins on the products, Soda Baking needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Soda Baking is facing challenges because of the dominance of functional experts in the organization. Reliance Baking Soda: Optimizing Promotional Spending (Brief Case) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Building a culture of innovation
– managers at Soda Baking 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 Sales & Marketing segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Soda Baking 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 Soda Baking to hire the very best people irrespective of their geographical location.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Soda Baking 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, Reliance Baking Soda: Optimizing Promotional Spending (Brief Case), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Soda Baking 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.
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 -
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 .
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.
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.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Soda Baking 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.
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.
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.
High dependence on third party suppliers
– Soda Baking 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.
Increasing wage structure of Soda Baking
– 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 Soda Baking.
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.