Akzo Nobel UK: Managing the Brand Portfolio SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Akzo Nobel UK: Managing the Brand Portfolio
In June 1999, Leif Abildgaard, the managing director of Akzo Nobel UK, faced a difficult decision: he had to figure out how to revive the company's trade business. Akzo Nobel UK had two principal lines of business: the retail business, which sold paint to the domestic, do-it-yourself market, and the trade business, which sold paint to professionals using a network of traditional paint merchants, builders merchants, and the company's own distribution outlets. Abildgaard, along with some of his more senior managers, decided in 1999 to reduce the number of brands in the trade business portfolio. Although Akzo Nobel had successfully reduced the number of brands in its retail business portfolio, no attempt had ever been made to drop brands from the trade portfolio. Because the trade business consisted of professionals who tended to be brand loyal, Abildgaard knew that any decision he made would likely alienate some of his customers. Nevertheless, Abildgaard pressed ahead in his effort and had to decide which brands to discontinue.
Swot Analysis of "Akzo Nobel UK: Managing the Brand Portfolio" written by Nirmalya Kumar, Brian Rogers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abildgaard Akzo facing as an external strategic factors. Some of the topics covered in Akzo Nobel UK: Managing the Brand Portfolio case study are - Strategic Management Strategies, Decision making and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Akzo Nobel UK: Managing the Brand Portfolio casestudy better are - – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing energy prices,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Akzo Nobel UK: Managing the Brand Portfolio
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Akzo Nobel UK: Managing the Brand Portfolio case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abildgaard Akzo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio can be done for the following purposes –
1. Strategic planning using facts provided in Akzo Nobel UK: Managing the Brand Portfolio case study
2. Improving business portfolio management of Abildgaard Akzo
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 Abildgaard Akzo
Strengths Akzo Nobel UK: Managing the Brand Portfolio | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abildgaard Akzo in Akzo Nobel UK: Managing the Brand Portfolio Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Abildgaard Akzo in the sector have low bargaining power. Akzo Nobel UK: Managing the Brand Portfolio has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abildgaard Akzo to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Abildgaard Akzo is one of the most innovative firm in sector. Manager in Akzo Nobel UK: Managing the Brand Portfolio 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
– Akzo Nobel UK: Managing the Brand Portfolio firm has clearly differentiated products in the market place. This has enabled Abildgaard Akzo to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Abildgaard Akzo to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Abildgaard Akzo is present in almost all the verticals within the industry. This has provided firm in Akzo Nobel UK: Managing the Brand Portfolio 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.
Successful track record of launching new products
– Abildgaard Akzo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abildgaard Akzo 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.
Effective Research and Development (R&D)
– Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Abildgaard Akzo 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 Nirmalya Kumar, Brian Rogers 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.
High brand equity
– Abildgaard Akzo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abildgaard Akzo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Akzo Nobel UK: Managing the Brand Portfolio Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Sales & Marketing field
– Abildgaard Akzo 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 Abildgaard Akzo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Abildgaard Akzo 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 Abildgaard Akzo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Akzo Nobel UK: Managing the Brand Portfolio Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Akzo Nobel UK: Managing the Brand Portfolio | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Akzo Nobel UK: Managing the Brand Portfolio are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Akzo Nobel UK: Managing the Brand Portfolio, in the dynamic environment Abildgaard Akzo has struggled to respond to the nimble upstart competition. Abildgaard Akzo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Abildgaard Akzo 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 - Akzo Nobel UK: Managing the Brand Portfolio should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Nirmalya Kumar, Brian Rogers suggests that, Abildgaard Akzo 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.
Increasing silos among functional specialists
– The organizational structure of Abildgaard Akzo is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Abildgaard Akzo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abildgaard Akzo to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Abildgaard Akzo has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Abildgaard Akzo 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Akzo Nobel UK: Managing the Brand Portfolio, it seems that the employees of Abildgaard Akzo 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 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 Abildgaard Akzo supply chain. Even after few cautionary changes mentioned in the HBR case study - Akzo Nobel UK: Managing the Brand Portfolio, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Abildgaard Akzo vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Abildgaard Akzo, firm in the HBR case study Akzo Nobel UK: Managing the Brand Portfolio needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Abildgaard Akzo products
– To increase the profitability and margins on the products, Abildgaard Akzo needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Akzo Nobel UK: Managing the Brand Portfolio 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 Abildgaard Akzo has relatively successful track record of launching new products.
Opportunities Akzo Nobel UK: Managing the Brand Portfolio | 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 Akzo Nobel UK: Managing the Brand Portfolio are -
Manufacturing automation
– Abildgaard Akzo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abildgaard Akzo can use these opportunities to build new business models that can help the communities that Abildgaard Akzo operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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. Abildgaard Akzo 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. Abildgaard Akzo 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abildgaard Akzo 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, Akzo Nobel UK: Managing the Brand Portfolio, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Abildgaard Akzo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Akzo Nobel UK: Managing the Brand Portfolio 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 Abildgaard Akzo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abildgaard Akzo 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 Abildgaard Akzo to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Abildgaard Akzo has opened avenues for new revenue streams for the organization in the industry. This can help Abildgaard Akzo to build a more holistic ecosystem as suggested in the Akzo Nobel UK: Managing the Brand Portfolio case study. Abildgaard Akzo can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Abildgaard Akzo in the consumer business. Now Abildgaard Akzo can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Abildgaard Akzo 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.
Using analytics as competitive advantage
– Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abildgaard Akzo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Abildgaard Akzo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Abildgaard Akzo to increase its market reach. Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Akzo Nobel UK: Managing the Brand Portfolio are -
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.
Increasing wage structure of Abildgaard Akzo
– 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 Abildgaard Akzo.
Shortening product life cycle
– it is one of the major threat that Abildgaard Akzo is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio .
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. Abildgaard Akzo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Abildgaard Akzo.
Regulatory challenges
– Abildgaard Akzo 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.
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 Abildgaard Akzo in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Abildgaard Akzo 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 Akzo Nobel UK: Managing the Brand Portfolio, Abildgaard Akzo 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 .
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 Abildgaard Akzo business can come under increasing regulations regarding data privacy, data security, etc.
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. Abildgaard Akzo 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.
Weighted SWOT Analysis of Akzo Nobel UK: Managing the Brand Portfolio 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 Akzo Nobel UK: Managing the Brand Portfolio 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 Akzo Nobel UK: Managing the Brand Portfolio 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 Akzo Nobel UK: Managing the Brand Portfolio 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 Akzo Nobel UK: Managing the Brand Portfolio 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 Abildgaard Akzo needs to make to build a sustainable competitive advantage.
