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 - – increasing energy prices, geopolitical disruptions, technology disruption, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
increasing transportation and logistics costs, 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 -
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.
Strong track record of project management
– Pritchett Wal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Superior customer experience
– The customer experience strategy of Pritchett Wal in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Pritchett Wal is one of the leading recruiters in the industry. Managers in the Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
Analytics focus
– Pritchett Wal 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 James K. Sebenius, Ellen Knebel 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 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 -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version, in the dynamic environment Pritchett Wal has struggled to respond to the nimble upstart competition. Pritchett Wal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version, is just above the industry average. Pritchett Wal 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.
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.
Aligning sales with marketing
– It come across in the case study Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version can leverage the sales team experience to cultivate customer relationships as Pritchett Wal is planning to shift buying processes online.
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.
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.
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.
Interest costs
– Compare to the competition, Pritchett Wal 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Pritchett Wal 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.
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.
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 -
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pritchett Wal 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.
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.
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.
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.
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.
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.
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.
Manufacturing automation
– Pritchett Wal can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pritchett Wal can use these opportunities to build new business models that can help the communities that Pritchett Wal operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
Buying journey improvements
– Pritchett Wal can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version 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.
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 -
High dependence on third party suppliers
– Pritchett Wal 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.
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 Pritchett Wal business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Pritchett Wal.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pritchett Wal 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 Lou Pritchett: Negotiating the P&G Relationship with Wal-Mart, Spanish Version .
Environmental challenges
– Pritchett Wal 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. Pritchett Wal can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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 Pritchett Wal in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
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.
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.