Trome: News for the Base of the Pyramid SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Trome: News for the Base of the Pyramid
In June 2001, Empresa Editora El Comercio (EEEC) had launched a new popular newspaper, Trome, for low-income families. Although several studies had preceded this launch, sales in following months failed to reach expected levels and actually displayed a decreasing trend. Trome embodied the company's effort to expand its news coverage to new population segments that were not served by its other newspaper, El Comercio, a market leader that had served as the foundation for the company itself. Six months after Trome's launch and faced with dropping sales, company managers had met to discuss their options. This case describes management team members' dilemmas at that meeting: "Should the new paper's style and contents be changed? Should Trome focus more on sex and violence-related issues, as its competitors did? Would it be convenient to replace the silverware promotion chosen to support launching? Was the channel conflict adequately managed? Were intended readers' needs truly and fully understood? Should the company re-launch Trome or would it be wiser to just give up on this project?
Authors :: Guillermo D'Andrea, Javier Jorge Silva, Maricruz Prado
Swot Analysis of "Trome: News for the Base of the Pyramid" written by Guillermo D'Andrea, Javier Jorge Silva, Maricruz Prado includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Trome Comercio facing as an external strategic factors. Some of the topics covered in Trome: News for the Base of the Pyramid case study are - Strategic Management Strategies, Product development, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Trome: News for the Base of the Pyramid casestudy better are - – 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, central banks are concerned over increasing inflation, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization, technology disruption,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Trome: News for the Base of the Pyramid
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Trome: News for the Base of the Pyramid case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Trome Comercio, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Trome Comercio 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 Trome: News for the Base of the Pyramid can be done for the following purposes –
1. Strategic planning using facts provided in Trome: News for the Base of the Pyramid case study
2. Improving business portfolio management of Trome Comercio
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 Trome Comercio
Strengths Trome: News for the Base of the Pyramid | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Trome Comercio in Trome: News for the Base of the Pyramid Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Trome Comercio in the sector have low bargaining power. Trome: News for the Base of the Pyramid has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Trome Comercio to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Trome Comercio is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Trome Comercio digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Trome Comercio 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
- Trome Comercio 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 Trome Comercio is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Trome: News for the Base of the Pyramid Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Trome: News for the Base of the Pyramid 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 recruit top talent
– Trome Comercio is one of the leading recruiters in the industry. Managers in the Trome: News for the Base of the Pyramid are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– Trome: News for the Base of the Pyramid firm has clearly differentiated products in the market place. This has enabled Trome Comercio to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Trome Comercio to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Trome Comercio 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)
– Trome Comercio 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 Trome: News for the Base of the Pyramid - 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
– Trome Comercio 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 Guillermo D'Andrea, Javier Jorge Silva, Maricruz Prado 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.
Successful track record of launching new products
– Trome Comercio has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Trome Comercio 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.
High brand equity
– Trome Comercio has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Trome Comercio to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Trome: News for the Base of the Pyramid | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Trome: News for the Base of the Pyramid are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Trome: News for the Base of the Pyramid, is just above the industry average. Trome Comercio 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.
Capital Spending Reduction
– Even during the low interest decade, Trome Comercio 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Trome: News for the Base of the Pyramid 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 Trome Comercio has relatively successful track record of launching new products.
High cash cycle compare to competitors
Trome Comercio 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.
Interest costs
– Compare to the competition, Trome Comercio 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Trome: News for the Base of the Pyramid, in the dynamic environment Trome Comercio has struggled to respond to the nimble upstart competition. Trome Comercio has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Trome Comercio 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.
Slow to strategic competitive environment developments
– As Trome: News for the Base of the Pyramid HBR case study mentions - Trome Comercio 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.
Low market penetration in new markets
– Outside its home market of Trome Comercio, firm in the HBR case study Trome: News for the Base of the Pyramid needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Trome Comercio 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Trome: News for the Base of the Pyramid 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 Trome Comercio 's lucrative customers.
Opportunities Trome: News for the Base of the Pyramid | 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 Trome: News for the Base of the Pyramid are -
Better consumer reach
– The expansion of the 5G network will help Trome Comercio to increase its market reach. Trome Comercio 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Trome Comercio 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.
Building a culture of innovation
– managers at Trome Comercio 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.
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 Trome Comercio in the consumer business. Now Trome Comercio can target international markets with far fewer capital restrictions requirements than the existing system.
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. Trome Comercio can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Trome Comercio 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 Trome Comercio to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Trome Comercio 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Trome Comercio can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Trome Comercio can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Trome Comercio 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Trome Comercio is facing challenges because of the dominance of functional experts in the organization. Trome: News for the Base of the Pyramid 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Trome Comercio can use these opportunities to build new business models that can help the communities that Trome Comercio operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Leveraging digital technologies
– Trome Comercio 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.
Threats Trome: News for the Base of the Pyramid External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Trome: News for the Base of the Pyramid are -
Environmental challenges
– Trome Comercio 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. Trome Comercio can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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 Trome Comercio.
Stagnating economy with rate increase
– Trome Comercio 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.
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. Trome Comercio 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.
Consumer confidence and its impact on Trome Comercio 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.
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 Trome Comercio in the Sales & Marketing sector and impact the bottomline 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 Trome Comercio business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Trome: News for the Base of the Pyramid, Trome Comercio 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 .
High dependence on third party suppliers
– Trome Comercio 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 acceleration in Forth Industrial Revolution
– Trome Comercio has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Trome Comercio 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.
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. Trome Comercio needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Trome: News for the Base of the Pyramid 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 Trome: News for the Base of the Pyramid 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 Trome: News for the Base of the Pyramid 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 Trome: News for the Base of the Pyramid 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 Trome: News for the Base of the Pyramid 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 Trome Comercio needs to make to build a sustainable competitive advantage.