Case Study Description of Selling CFLs at Wal-Mart
In early 2009, Wal-Mart executive Andy Barron realized the firm's lighting business was facing a challenge. After achieving a goal of selling 100 million compact fluorescent light (CFL) bulbs by the end of 2007, sales of the energy-efficient bulbs had started to plateau, leading to a dim outlook for 2009. Barron needed to examine what barriers might be keeping consumers from adopting more of the bulbs, which offer both cost savings and environmental benefits. In this 2-part case students study the historic price points and sales of CFL bulbs, Wal-Mart's 2007 promotion of CFL lighting, and research about consumer adoption of the bulbs in order to understand how the retailer might achieve its goals. The case asks: How can consumer habits be changed? How can new products overcome barriers to adoption? What can managers do to promote sales of new products, given human behavior where biases, values and emotions have an impact on the choices people make? How can economic theories explain consumer behavior as it occurs in the real world? The Epilogue to the first case asks students to discuss what developments occurred after the 2009 implementation and how they impacted CFL sales.
Swot Analysis of "Selling CFLs at Wal-Mart" written by Eric J. Johnson, Daniel M. Bartels includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bulbs Cfl facing as an external strategic factors. Some of the topics covered in Selling CFLs at Wal-Mart case study are - Strategic Management Strategies, Sustainability and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Selling CFLs at Wal-Mart casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing commodity prices, challanges to central banks by blockchain based private currencies,
there is backlash against globalization, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Selling CFLs at Wal-Mart
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Selling CFLs at Wal-Mart case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bulbs Cfl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bulbs Cfl 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 Selling CFLs at Wal-Mart can be done for the following purposes –
1. Strategic planning using facts provided in Selling CFLs at Wal-Mart case study
2. Improving business portfolio management of Bulbs Cfl
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 Bulbs Cfl
Strengths Selling CFLs at Wal-Mart | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bulbs Cfl in Selling CFLs at Wal-Mart Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Bulbs Cfl in the sector have low bargaining power. Selling CFLs at Wal-Mart has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bulbs Cfl to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Bulbs Cfl
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bulbs Cfl does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Bulbs Cfl has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Selling CFLs at Wal-Mart 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.
Strong track record of project management
– Bulbs Cfl is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Bulbs Cfl 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 Bulbs Cfl 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)
– Bulbs Cfl 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 Selling CFLs at Wal-Mart - 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
– Bulbs Cfl is present in almost all the verticals within the industry. This has provided firm in Selling CFLs at Wal-Mart 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.
Operational resilience
– The operational resilience strategy in the Selling CFLs at Wal-Mart 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
- Bulbs Cfl 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 Bulbs Cfl is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Selling CFLs at Wal-Mart Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Bulbs Cfl is one of the leading recruiters in the industry. Managers in the Selling CFLs at Wal-Mart are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Bulbs Cfl 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.
High switching costs
– The high switching costs that Bulbs Cfl 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.
Weaknesses Selling CFLs at Wal-Mart | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Selling CFLs at Wal-Mart are -
Products dominated business model
– Even though Bulbs Cfl 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 - Selling CFLs at Wal-Mart should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Bulbs Cfl 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 Selling CFLs at Wal-Mart 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 Bulbs Cfl has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Selling CFLs at Wal-Mart HBR case study mentions - Bulbs Cfl 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.
Interest costs
– Compare to the competition, Bulbs Cfl 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bulbs Cfl supply chain. Even after few cautionary changes mentioned in the HBR case study - Selling CFLs at Wal-Mart, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bulbs Cfl vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Selling CFLs at Wal-Mart 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 Bulbs Cfl 's lucrative customers.
Lack of clear differentiation of Bulbs Cfl products
– To increase the profitability and margins on the products, Bulbs Cfl needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Selling CFLs at Wal-Mart, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Selling CFLs at Wal-Mart, in the dynamic environment Bulbs Cfl has struggled to respond to the nimble upstart competition. Bulbs Cfl has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bulbs Cfl is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Selling CFLs at Wal-Mart can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Selling CFLs at Wal-Mart | 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 Selling CFLs at Wal-Mart 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 Bulbs Cfl in the consumer business. Now Bulbs Cfl can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Bulbs Cfl has opened avenues for new revenue streams for the organization in the industry. This can help Bulbs Cfl to build a more holistic ecosystem as suggested in the Selling CFLs at Wal-Mart case study. Bulbs Cfl can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Bulbs Cfl 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.
Using analytics as competitive advantage
– Bulbs Cfl has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Selling CFLs at Wal-Mart - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bulbs Cfl to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Bulbs Cfl 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bulbs Cfl 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, Selling CFLs at Wal-Mart, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Bulbs Cfl to increase its market reach. Bulbs Cfl 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, Bulbs Cfl 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.
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. Bulbs Cfl can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Bulbs Cfl 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.
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 Bulbs Cfl 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.
Learning at scale
– Online learning technologies has now opened space for Bulbs Cfl 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bulbs Cfl 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.
Threats Selling CFLs at Wal-Mart External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Selling CFLs at Wal-Mart are -
Regulatory challenges
– Bulbs Cfl 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Selling CFLs at Wal-Mart, Bulbs Cfl 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bulbs Cfl 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 Selling CFLs at Wal-Mart .
Environmental challenges
– Bulbs Cfl 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. Bulbs Cfl can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Bulbs Cfl
– 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 Bulbs Cfl.
Shortening product life cycle
– it is one of the major threat that Bulbs Cfl is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Bulbs Cfl 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.
High dependence on third party suppliers
– Bulbs Cfl 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 Bulbs Cfl business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bulbs Cfl with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Bulbs Cfl 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.
Weighted SWOT Analysis of Selling CFLs at Wal-Mart 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 Selling CFLs at Wal-Mart 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 Selling CFLs at Wal-Mart 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 Selling CFLs at Wal-Mart 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 Selling CFLs at Wal-Mart 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 Bulbs Cfl needs to make to build a sustainable competitive advantage.