Case Study Description of Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste
In October 2013, Colgate-Palmolive Company, the world's leading oral care company, was about to launch its new ColgateA? Maximum Cavity Protectiona?? plus Sugar Acid Neutralizera?? toothpaste in Brazil. Oral care category accounted for 46 percent of Colgate's $17.4 billion sales worldwide in 2013. The new toothpaste was clinically proven to reduce and prevent cavities more effectively than toothpaste with the same level of fluoride alone. All major industry players, including Procter & Gamble, GlaxoSmithKline and Colgate itself, had long ago launched products with the maximum amount of fluoride allowed by Health authorities. Yet cavities remained a significant threat to public health in many countries, both developing and developed. As Suzan Harrison, Colgate's president of Oral Care, prepared to launch CMCP+SAN in Brazil, the world's third largest oral care market, her executive team was divided over the product's positioning and pricing. Should it be positioned as a basic product to maximize reach for its health benefits or as a premium product for consumers who sought superior cavity protection?
Swot Analysis of "Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste" written by John A. Quelch, Margaret Rodriguez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cavity Toothpaste facing as an external strategic factors. Some of the topics covered in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste case study are - Strategic Management Strategies, Product development, Social responsibility, Sustainability and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste casestudy better are - – increasing transportation and logistics costs, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing commodity prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cavity Toothpaste, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste can be done for the following purposes –
1. Strategic planning using facts provided in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste case study
2. Improving business portfolio management of Cavity Toothpaste
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 Cavity Toothpaste
Strengths Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cavity Toothpaste in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste Harvard Business Review case study are -
High switching costs
– The high switching costs that Cavity Toothpaste 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cavity Toothpaste digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cavity Toothpaste 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.
Diverse revenue streams
– Cavity Toothpaste is present in almost all the verticals within the industry. This has provided firm in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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.
High brand equity
– Cavity Toothpaste has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cavity Toothpaste to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Cavity Toothpaste 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 John A. Quelch, Margaret Rodriguez 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.
Low bargaining power of suppliers
– Suppliers of Cavity Toothpaste in the sector have low bargaining power. Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cavity Toothpaste to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Cavity Toothpaste has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cavity Toothpaste 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.
Learning organization
- Cavity Toothpaste 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 Cavity Toothpaste is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Cavity Toothpaste is one of the most innovative firm in sector. Manager in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Cavity Toothpaste 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
– Cavity Toothpaste has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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.
Weaknesses Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste are -
Capital Spending Reduction
– Even during the low interest decade, Cavity Toothpaste 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.
Increasing silos among functional specialists
– The organizational structure of Cavity Toothpaste is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cavity Toothpaste needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cavity Toothpaste to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste, is just above the industry average. Cavity Toothpaste 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.
Slow to strategic competitive environment developments
– As Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste HBR case study mentions - Cavity Toothpaste 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.
No frontier risks strategy
– After analyzing the HBR case study Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste, 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.
Low market penetration in new markets
– Outside its home market of Cavity Toothpaste, firm in the HBR case study Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cavity Toothpaste is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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 Cavity Toothpaste 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 - Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, John A. Quelch, Margaret Rodriguez suggests that, Cavity Toothpaste is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Cavity Toothpaste products
– To increase the profitability and margins on the products, Cavity Toothpaste needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Cavity Toothpaste 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.
Opportunities Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste | 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cavity Toothpaste 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, Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Cavity Toothpaste 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.
Buying journey improvements
– Cavity Toothpaste can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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.
Developing new processes and practices
– Cavity Toothpaste 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.
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. Cavity Toothpaste can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Cavity Toothpaste in the consumer business. Now Cavity Toothpaste can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Cavity Toothpaste to increase its market reach. Cavity Toothpaste 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.
Leveraging digital technologies
– Cavity Toothpaste 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.
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 Cavity Toothpaste 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.
Loyalty marketing
– Cavity Toothpaste 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.
Creating value in data economy
– The success of analytics program of Cavity Toothpaste has opened avenues for new revenue streams for the organization in the industry. This can help Cavity Toothpaste to build a more holistic ecosystem as suggested in the Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste case study. Cavity Toothpaste can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cavity Toothpaste 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.
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. Cavity Toothpaste can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste, Cavity Toothpaste 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 .
Technology acceleration in Forth Industrial Revolution
– Cavity Toothpaste has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Cavity Toothpaste 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.
High dependence on third party suppliers
– Cavity Toothpaste 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.
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. Cavity Toothpaste can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste .
Regulatory challenges
– Cavity Toothpaste 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cavity Toothpaste with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Cavity Toothpaste 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.
Environmental challenges
– Cavity Toothpaste 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. Cavity Toothpaste can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Cavity Toothpaste is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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 Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste 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 Cavity Toothpaste needs to make to build a sustainable competitive advantage.