Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm
This three-part case series examines the change management challenge of putting corporate marketing at the top of the corporate executive suite (C-suite) agenda in a business-to-business (B2B) multinational. It follows the four-year journey, from 2010 to 2014, of Mauricio Adade, the newly appointed chief marketing officer (CMO) of Royal DSM - a global leader in life sciences and material sciences headquartered in the Netherlands. The case series, together with the video supplement, delves into the issues faced by the company's top leadership, including Adade, in its effort to transform a diversified industrial company into an organization with best-in-class marketing and sales capabilities. Case A begins by highlighting the culture and organizational structure of Royal DSM and the decision to raise the profile of headquarters-based corporate marketing, with the appointment of Adade in 2010. It discusses the marketing and sales excellence project launched by the new CMO during his first year at the helm and concludes by putting the spotlight on the resistance posed by the company's most powerful stakeholders: the business group leaders. Case B focuses on the implementation journey during the period 2011-2014. Adade and his team adopted a new plan of action and positioned the corporate marketing department as a partner that worked with the business groups to deliver projects with quantifiable results. Did the new strategy work? Case C provides an update on the replacement of Adade (announced in December 2014) and allows for a discussion on the challenges that lie ahead for the new CMO and the organization as a whole.
Swot Analysis of "Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm" written by Wolfgang Ulaga, Athanasios Kondis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adade Cmo facing as an external strategic factors. Some of the topics covered in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm case study are - Strategic Management Strategies, Change management, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm casestudy better are - – increasing household debt because of falling income levels, technology disruption, increasing commodity prices, supply chains are disrupted by pandemic , increasing transportation and logistics costs, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adade Cmo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adade Cmo 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm can be done for the following purposes –
1. Strategic planning using facts provided in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm case study
2. Improving business portfolio management of Adade Cmo
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 Adade Cmo
Strengths Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adade Cmo in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm Harvard Business Review case study are -
Learning organization
- Adade Cmo 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 Adade Cmo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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.
Training and development
– Adade Cmo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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.
Diverse revenue streams
– Adade Cmo is present in almost all the verticals within the industry. This has provided firm in Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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.
Analytics focus
– Adade Cmo 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 Wolfgang Ulaga, Athanasios Kondis 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.
Strong track record of project management
– Adade Cmo 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 Adade Cmo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Adade Cmo 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)
– Adade Cmo 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Adade Cmo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Adade Cmo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Adade Cmo in the sector have low bargaining power. Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Adade Cmo to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Adade Cmo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Adade Cmo 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.
Weaknesses Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Adade Cmo supply chain. Even after few cautionary changes mentioned in the HBR case study - Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Adade Cmo vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Adade Cmo, firm in the HBR case study Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Adade Cmo 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm, in the dynamic environment Adade Cmo has struggled to respond to the nimble upstart competition. Adade Cmo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Adade Cmo 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.
Products dominated business model
– Even though Adade Cmo 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 - Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Adade Cmo 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.
No frontier risks strategy
– After analyzing the HBR case study Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm, it seems that the employees of Adade Cmo 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Adade Cmo has relatively successful track record of launching new products.
Lack of clear differentiation of Adade Cmo products
– To increase the profitability and margins on the products, Adade Cmo needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm | 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm are -
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. Adade Cmo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Adade Cmo 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, Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Adade Cmo 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 Adade Cmo 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.
Developing new processes and practices
– Adade Cmo 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.
Loyalty marketing
– Adade Cmo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Adade Cmo can use these opportunities to build new business models that can help the communities that Adade Cmo operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Leveraging digital technologies
– Adade Cmo 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.
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 Adade Cmo in the consumer business. Now Adade Cmo can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Adade Cmo 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 Adade Cmo 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.
Buying journey improvements
– Adade Cmo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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.
Using analytics as competitive advantage
– Adade Cmo 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Adade Cmo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm are -
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. Adade Cmo 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
– Adade Cmo has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Adade Cmo 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 wage structure of Adade Cmo
– 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 Adade Cmo.
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. Adade Cmo 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Adade Cmo 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adade Cmo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Adade Cmo 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.
High dependence on third party suppliers
– Adade Cmo 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Adade Cmo business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Adade Cmo 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm, Adade Cmo 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 .
Environmental challenges
– Adade Cmo 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. Adade Cmo can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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 Royal DSM (A): Creating a Chief Marketing Officer (CMO) Position in a B2B Firm 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 Adade Cmo needs to make to build a sustainable competitive advantage.
