Case Study Description of Canopy Growth Corp.: Product Messaging for Recreational Cannabis
In April 2016, Canopy Growth Corporation, one of Canada's top producers of medical cannabis, was planning a strategy for its future. The government of Canada had just announced its plans to introduce a bill to legalize recreational cannabis use in 2017, followed by a rollout of the policy in early 2018. The company's chief executive officer needed to plan a strategy that addressed three main issues: product messaging for recreational cannabis, establishing a retail footprint in recreational cannabis, and building an international business.
Swot Analysis of "Canopy Growth Corp.: Product Messaging for Recreational Cannabis" written by Allison Johnson, Ramasastry Chandrasekhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cannabis Recreational facing as an external strategic factors. Some of the topics covered in Canopy Growth Corp.: Product Messaging for Recreational Cannabis case study are - Strategic Management Strategies, Customers, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Canopy Growth Corp.: Product Messaging for Recreational Cannabis casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, wage bills are increasing,
cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Canopy Growth Corp.: Product Messaging for Recreational Cannabis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Canopy Growth Corp.: Product Messaging for Recreational Cannabis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cannabis Recreational, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cannabis Recreational 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis can be done for the following purposes –
1. Strategic planning using facts provided in Canopy Growth Corp.: Product Messaging for Recreational Cannabis case study
2. Improving business portfolio management of Cannabis Recreational
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 Cannabis Recreational
Strengths Canopy Growth Corp.: Product Messaging for Recreational Cannabis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cannabis Recreational in Canopy Growth Corp.: Product Messaging for Recreational Cannabis Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Cannabis Recreational 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.
Effective Research and Development (R&D)
– Cannabis Recreational 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis - 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
– Cannabis Recreational is present in almost all the verticals within the industry. This has provided firm in Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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.
Training and development
– Cannabis Recreational has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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.
Operational resilience
– The operational resilience strategy in the Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cannabis Recreational digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cannabis Recreational 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.
Innovation driven organization
– Cannabis Recreational is one of the most innovative firm in sector. Manager in Canopy Growth Corp.: Product Messaging for Recreational Cannabis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Cannabis Recreational 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 Cannabis Recreational is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Canopy Growth Corp.: Product Messaging for Recreational Cannabis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Cannabis Recreational
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cannabis Recreational does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– Canopy Growth Corp.: Product Messaging for Recreational Cannabis firm has clearly differentiated products in the market place. This has enabled Cannabis Recreational to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Cannabis Recreational to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Cannabis Recreational has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cannabis Recreational 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.
Strong track record of project management
– Cannabis Recreational is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Canopy Growth Corp.: Product Messaging for Recreational Cannabis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Canopy Growth Corp.: Product Messaging for Recreational Cannabis are -
Lack of clear differentiation of Cannabis Recreational products
– To increase the profitability and margins on the products, Cannabis Recreational needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis can leverage the sales team experience to cultivate customer relationships as Cannabis Recreational is planning to shift buying processes online.
Interest costs
– Compare to the competition, Cannabis Recreational 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 Cannabis Recreational supply chain. Even after few cautionary changes mentioned in the HBR case study - Canopy Growth Corp.: Product Messaging for Recreational Cannabis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cannabis Recreational vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Cannabis Recreational 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Canopy Growth Corp.: Product Messaging for Recreational Cannabis, in the dynamic environment Cannabis Recreational has struggled to respond to the nimble upstart competition. Cannabis Recreational has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Canopy Growth Corp.: Product Messaging for Recreational Cannabis, is just above the industry average. Cannabis Recreational 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Cannabis Recreational has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Cannabis Recreational is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cannabis Recreational needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cannabis Recreational to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Cannabis Recreational 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 to strategic competitive environment developments
– As Canopy Growth Corp.: Product Messaging for Recreational Cannabis HBR case study mentions - Cannabis Recreational 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.
Opportunities Canopy Growth Corp.: Product Messaging for Recreational Cannabis | 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis are -
Leveraging digital technologies
– Cannabis Recreational 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cannabis Recreational 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 Cannabis Recreational to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cannabis Recreational can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cannabis Recreational 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.
Loyalty marketing
– Cannabis Recreational 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.
Developing new processes and practices
– Cannabis Recreational 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.
Learning at scale
– Online learning technologies has now opened space for Cannabis Recreational 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.
Using analytics as competitive advantage
– Cannabis Recreational 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cannabis Recreational to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cannabis Recreational 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, Canopy Growth Corp.: Product Messaging for Recreational Cannabis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cannabis Recreational 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cannabis Recreational can use these opportunities to build new business models that can help the communities that Cannabis Recreational operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Creating value in data economy
– The success of analytics program of Cannabis Recreational has opened avenues for new revenue streams for the organization in the industry. This can help Cannabis Recreational to build a more holistic ecosystem as suggested in the Canopy Growth Corp.: Product Messaging for Recreational Cannabis case study. Cannabis Recreational 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. Cannabis Recreational can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Canopy Growth Corp.: Product Messaging for Recreational Cannabis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Canopy Growth Corp.: Product Messaging for Recreational Cannabis are -
Shortening product life cycle
– it is one of the major threat that Cannabis Recreational is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Cannabis Recreational.
Increasing wage structure of Cannabis Recreational
– 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 Cannabis Recreational.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cannabis Recreational 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Canopy Growth Corp.: Product Messaging for Recreational Cannabis, Cannabis Recreational 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 .
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.
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. Cannabis Recreational can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Cannabis Recreational business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Cannabis Recreational 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cannabis Recreational with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Cannabis Recreational in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Cannabis Recreational has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Cannabis Recreational 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.
Weighted SWOT Analysis of Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Canopy Growth Corp.: Product Messaging for Recreational Cannabis 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 Cannabis Recreational needs to make to build a sustainable competitive advantage.