Case Study Description of Slanket: Responding to Snuggie's Market Entry
How does a pioneer in a new product category deal with the runaway success of a follower? Can search engine marketing and social media help? In 2008 Slanket CEO, Gary Clegg, found that his product, a blanket with sleeves, had been eclipsed by The Snuggie, another sleeved blanket. Snuggie made a brazen entry into the market with a $10 million spend on television infomercials. The Snuggie quickly became a pop culture phenomenon, talked about on popular television programs such as Oprah and The Tonight Show with Jay Leno, and paid mock tribute to on web sites such as YouTube, where hundreds of video parodies could be found. Clegg had been counting on building his Slanket brand. Will the coming of Snuggie mean the end of Slanket?a??a??a??a??a??
Swot Analysis of "Slanket: Responding to Snuggie's Market Entry" written by John Deighton, Leora Kornfeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Slanket Snuggie facing as an external strategic factors. Some of the topics covered in Slanket: Responding to Snuggie's Market Entry case study are - Strategic Management Strategies, Marketing, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Slanket: Responding to Snuggie's Market Entry casestudy better are - – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Slanket: Responding to Snuggie's Market Entry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Slanket: Responding to Snuggie's Market Entry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Slanket Snuggie, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Slanket Snuggie 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 Slanket: Responding to Snuggie's Market Entry can be done for the following purposes –
1. Strategic planning using facts provided in Slanket: Responding to Snuggie's Market Entry case study
2. Improving business portfolio management of Slanket Snuggie
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 Slanket Snuggie
Strengths Slanket: Responding to Snuggie's Market Entry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Slanket Snuggie in Slanket: Responding to Snuggie's Market Entry Harvard Business Review case study are -
High brand equity
– Slanket Snuggie has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Slanket Snuggie to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Slanket Snuggie 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.
Organizational Resilience of Slanket Snuggie
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Slanket Snuggie does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Slanket Snuggie is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Slanket Snuggie 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 Slanket Snuggie is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Slanket: Responding to Snuggie's Market Entry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Slanket Snuggie is one of the most innovative firm in sector. Manager in Slanket: Responding to Snuggie's Market Entry 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
– Slanket: Responding to Snuggie's Market Entry firm has clearly differentiated products in the market place. This has enabled Slanket Snuggie to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Slanket Snuggie to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Slanket Snuggie are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Slanket Snuggie digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Slanket Snuggie 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.
Ability to lead change in Sales & Marketing field
– Slanket Snuggie 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 Slanket Snuggie in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Slanket Snuggie 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 Slanket: Responding to Snuggie's Market Entry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Slanket Snuggie is present in almost all the verticals within the industry. This has provided firm in Slanket: Responding to Snuggie's Market Entry 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.
Weaknesses Slanket: Responding to Snuggie's Market Entry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Slanket: Responding to Snuggie's Market Entry are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Slanket: Responding to Snuggie's Market Entry, is just above the industry average. Slanket Snuggie 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.
Low market penetration in new markets
– Outside its home market of Slanket Snuggie, firm in the HBR case study Slanket: Responding to Snuggie's Market Entry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Slanket: Responding to Snuggie's Market Entry HBR case study mentions - Slanket Snuggie 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Slanket Snuggie is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Slanket: Responding to Snuggie's Market Entry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Slanket Snuggie has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Slanket Snuggie even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Slanket Snuggie 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, Slanket Snuggie 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.
High bargaining power of channel partners
– Because of the regulatory requirements, John Deighton, Leora Kornfeld suggests that, Slanket Snuggie 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.
Skills based hiring
– The stress on hiring functional specialists at Slanket Snuggie 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.
Capital Spending Reduction
– Even during the low interest decade, Slanket Snuggie 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.
Lack of clear differentiation of Slanket Snuggie products
– To increase the profitability and margins on the products, Slanket Snuggie needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Slanket: Responding to Snuggie's Market Entry | 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 Slanket: Responding to Snuggie's Market Entry are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Slanket Snuggie 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 Slanket Snuggie 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 Slanket Snuggie to hire the very best people irrespective of their geographical location.
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 Slanket Snuggie 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.
Manufacturing automation
– Slanket Snuggie 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Slanket Snuggie 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, Slanket: Responding to Snuggie's Market Entry, 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
– Slanket Snuggie can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Slanket: Responding to Snuggie's Market Entry 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.
Leveraging digital technologies
– Slanket Snuggie 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Slanket Snuggie 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Slanket Snuggie can use these opportunities to build new business models that can help the communities that Slanket Snuggie operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Slanket Snuggie in the consumer business. Now Slanket Snuggie can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Slanket Snuggie is facing challenges because of the dominance of functional experts in the organization. Slanket: Responding to Snuggie's Market Entry 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Slanket Snuggie 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.
Creating value in data economy
– The success of analytics program of Slanket Snuggie has opened avenues for new revenue streams for the organization in the industry. This can help Slanket Snuggie to build a more holistic ecosystem as suggested in the Slanket: Responding to Snuggie's Market Entry case study. Slanket Snuggie can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Slanket: Responding to Snuggie's Market Entry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Slanket: Responding to Snuggie's Market Entry are -
High dependence on third party suppliers
– Slanket Snuggie 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.
Shortening product life cycle
– it is one of the major threat that Slanket Snuggie is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Slanket: Responding to Snuggie's Market Entry, Slanket Snuggie 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 .
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 Slanket Snuggie in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Slanket Snuggie has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Slanket Snuggie needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Slanket Snuggie 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.
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 Slanket Snuggie business can come under increasing regulations regarding data privacy, data security, 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.
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 Slanket Snuggie.
Increasing wage structure of Slanket Snuggie
– 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 Slanket Snuggie.
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Slanket Snuggie 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 Slanket: Responding to Snuggie's Market Entry .
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. Slanket Snuggie needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Slanket: Responding to Snuggie's Market Entry 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 Slanket: Responding to Snuggie's Market Entry 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 Slanket: Responding to Snuggie's Market Entry 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 Slanket: Responding to Snuggie's Market Entry 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 Slanket: Responding to Snuggie's Market Entry 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 Slanket Snuggie needs to make to build a sustainable competitive advantage.