Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function
Supplement to case IMD780. 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 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?
Swot Analysis of "Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function" written by Wolfgang Ulaga, Athanasios Kondis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adade Dsm facing as an external strategic factors. Some of the topics covered in Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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 (B): The Challenge of Establishing the Corporate Marketing Function casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices,
increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adade Dsm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adade Dsm 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 (B): The Challenge of Establishing the Corporate Marketing Function can be done for the following purposes –
1. Strategic planning using facts provided in Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function case study
2. Improving business portfolio management of Adade Dsm
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 Dsm
Strengths Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adade Dsm in Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Adade Dsm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Adade Dsm 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.
Learning organization
- Adade Dsm 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 Dsm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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.
Highly skilled collaborators
– Adade Dsm 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 Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Adade Dsm 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 (B): The Challenge of Establishing the Corporate Marketing Function - 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
– Adade Dsm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Adade Dsm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Adade Dsm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Adade Dsm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Adade Dsm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Adade Dsm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Adade Dsm 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.
Superior customer experience
– The customer experience strategy of Adade Dsm 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 Dsm 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.
Analytics focus
– Adade Dsm 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.
Weaknesses Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Adade Dsm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function, in the dynamic environment Adade Dsm has struggled to respond to the nimble upstart competition. Adade Dsm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Dsm supply chain. Even after few cautionary changes mentioned in the HBR case study - Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Adade Dsm vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Adade Dsm 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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 Dsm has relatively successful track record of launching new products.
Need for greater diversity
– Adade Dsm 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.
High cash cycle compare to competitors
Adade Dsm 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.
Capital Spending Reduction
– Even during the low interest decade, Adade Dsm 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function, it seems that the employees of Adade Dsm 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.
Interest costs
– Compare to the competition, Adade Dsm 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 Dsm 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 (B): The Challenge of Establishing the Corporate Marketing Function should strive to include more intangible value offerings along with its core products and services.
Opportunities Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function | 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 (B): The Challenge of Establishing the Corporate Marketing Function are -
Learning at scale
– Online learning technologies has now opened space for Adade Dsm 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.
Better consumer reach
– The expansion of the 5G network will help Adade Dsm to increase its market reach. Adade Dsm 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.
Creating value in data economy
– The success of analytics program of Adade Dsm has opened avenues for new revenue streams for the organization in the industry. This can help Adade Dsm to build a more holistic ecosystem as suggested in the Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function case study. Adade Dsm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Adade Dsm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Adade Dsm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Adade Dsm is facing challenges because of the dominance of functional experts in the organization. Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Adade Dsm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Adade Dsm 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.
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 Dsm can use these opportunities to build new business models that can help the communities that Adade Dsm 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. Adade Dsm 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. Adade Dsm 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Adade Dsm to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Adade Dsm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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 Adade Dsm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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 (B): The Challenge of Establishing the Corporate Marketing Function are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Adade Dsm 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 (B): The Challenge of Establishing the Corporate Marketing Function .
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.
High dependence on third party suppliers
– Adade Dsm 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.
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 Dsm needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Adade Dsm 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.
Regulatory challenges
– Adade Dsm 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.
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. Adade Dsm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Adade Dsm in the Sales & Marketing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adade Dsm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Adade Dsm 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 Dsm can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology acceleration in Forth Industrial Revolution
– Adade Dsm has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Adade Dsm 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.
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 Dsm 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.
Shortening product life cycle
– it is one of the major threat that Adade Dsm 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 Royal DSM (B): The Challenge of Establishing the Corporate Marketing Function 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 (B): The Challenge of Establishing the Corporate Marketing Function 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 (B): The Challenge of Establishing the Corporate Marketing Function 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 (B): The Challenge of Establishing the Corporate Marketing Function 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 (B): The Challenge of Establishing the Corporate Marketing Function 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 Dsm needs to make to build a sustainable competitive advantage.