Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version
Describes several internal and external negotiations in the 1980s that led to a significant and growing partnership between Procter & Gamble (P&G) and Wal-Mart. From the perspective of Lou Pritchett, P&G's Vice President of Sales and Customer Development, the unfolding negotiations are described, starting with a canoe trip Pritchett took with Wal-Mart founder Sam Walton. Provides insight into various negotiating situations as well as key lessons learned from early efforts to help P&G and Wal-Mart forge a more integrated supplier-retailer partnership.
Swot Analysis of "Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version" written by James K. Sebenius, Ellen Knebel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pritchett Wal facing as an external strategic factors. Some of the topics covered in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version case study are - Strategic Management Strategies, Negotiations, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, wage bills are increasing, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing commodity prices,
increasing energy prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pritchett Wal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pritchett Wal 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version case study
2. Improving business portfolio management of Pritchett Wal
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 Pritchett Wal
Strengths Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pritchett Wal in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version firm has clearly differentiated products in the market place. This has enabled Pritchett Wal to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Pritchett Wal to invest into research and development (R&D) and innovation.
Innovation driven organization
– Pritchett Wal is one of the most innovative firm in sector. Manager in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– Pritchett Wal 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 Pritchett Wal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Pritchett Wal 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.
Training and development
– Pritchett Wal has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Pritchett Wal is present in almost all the verticals within the industry. This has provided firm in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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.
Effective Research and Development (R&D)
– Pritchett Wal 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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.
Learning organization
- Pritchett Wal 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 Pritchett Wal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Pritchett Wal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pritchett Wal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Pritchett Wal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pritchett Wal 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Pritchett Wal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pritchett Wal has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version are -
Increasing silos among functional specialists
– The organizational structure of Pritchett Wal is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Pritchett Wal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pritchett Wal to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Pritchett Wal 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.
Low market penetration in new markets
– Outside its home market of Pritchett Wal, firm in the HBR case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Pritchett Wal 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 operating costs
– Compare to the competitors, firm in the HBR case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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 Pritchett Wal 's lucrative customers.
Lack of clear differentiation of Pritchett Wal products
– To increase the profitability and margins on the products, Pritchett Wal needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pritchett Wal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Pritchett Wal 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 - Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Pritchett Wal 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.
Slow decision making process
– As mentioned earlier in the report, Pritchett Wal 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. Pritchett Wal 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.
Opportunities Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version | 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version are -
Learning at scale
– Online learning technologies has now opened space for Pritchett Wal 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.
Building a culture of innovation
– managers at Pritchett Wal 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.
Developing new processes and practices
– Pritchett Wal can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pritchett Wal 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.
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 Pritchett Wal in the consumer business. Now Pritchett Wal can target international markets with far fewer capital restrictions requirements than the existing system.
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 Pritchett Wal 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pritchett Wal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Pritchett Wal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pritchett Wal 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 Pritchett Wal to hire the very best people irrespective of their geographical location.
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. Pritchett Wal can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Pritchett Wal 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. Pritchett Wal 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.
Creating value in data economy
– The success of analytics program of Pritchett Wal has opened avenues for new revenue streams for the organization in the industry. This can help Pritchett Wal to build a more holistic ecosystem as suggested in the Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version case study. Pritchett Wal can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Pritchett Wal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version are -
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 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. Pritchett Wal needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Pritchett Wal 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pritchett Wal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Pritchett Wal 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.
Stagnating economy with rate increase
– Pritchett Wal 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pritchett Wal 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.
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.
Shortening product life cycle
– it is one of the major threat that Pritchett Wal is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Pritchett Wal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Pritchett Wal has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Pritchett Wal 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.
Regulatory challenges
– Pritchett Wal 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.
Increasing wage structure of Pritchett Wal
– 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 Pritchett Wal.
Weighted SWOT Analysis of Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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 Pritchett Wal needs to make to build a sustainable competitive advantage.
