Case Study Description of Colgate: Regaining Leadership in India's Sensitive Teeth Market
In April 2013, Colgate-Palmolive, a long-term front runner in a consumer goods business that specialized in oral care products, lost its dominance for the sensitive teeth toothpaste market in India. It was a dominance that Colgate-Palmolive had managed to build over the years by being a first mover and by leveraging its reputation as a leader in oral care products. However, new global and local competitors entered the market with diverse product variants and aggressive marketing campaigns, and started to erode the company's market share. By mid-2013, the fight for market share was fierce and on the verge of becoming even more intense. Could Colgate-Palmolive regain its dominance? How should the company navigate these extremely competitive tides to regain its lost market share? Doreen Kum is affiliated with NUS Business School.
Swot Analysis of "Colgate: Regaining Leadership in India's Sensitive Teeth Market" written by Doreen Kum includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Colgate Palmolive facing as an external strategic factors. Some of the topics covered in Colgate: Regaining Leadership in India's Sensitive Teeth Market case study are - Strategic Management Strategies, Customers, Emerging markets and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Colgate: Regaining Leadership in India's Sensitive Teeth Market casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, 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, increasing energy prices, talent flight as more people leaving formal jobs, there is backlash against globalization,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of Colgate: Regaining Leadership in India's Sensitive Teeth Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Colgate: Regaining Leadership in India's Sensitive Teeth Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Colgate Palmolive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Colgate Palmolive 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: Regaining Leadership in India's Sensitive Teeth Market can be done for the following purposes –
1. Strategic planning using facts provided in Colgate: Regaining Leadership in India's Sensitive Teeth Market case study
2. Improving business portfolio management of Colgate Palmolive
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 Colgate Palmolive
Strengths Colgate: Regaining Leadership in India's Sensitive Teeth Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Colgate Palmolive in Colgate: Regaining Leadership in India's Sensitive Teeth Market Harvard Business Review case study are -
Organizational Resilience of Colgate Palmolive
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Colgate Palmolive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Colgate Palmolive 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: Regaining Leadership in India's Sensitive Teeth Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Colgate Palmolive in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Colgate Palmolive has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Colgate: Regaining Leadership in India's Sensitive Teeth Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Colgate Palmolive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Colgate Palmolive 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
– Colgate Palmolive is one of the most innovative firm in sector. Manager in Colgate: Regaining Leadership in India's Sensitive Teeth Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Colgate: Regaining Leadership in India's Sensitive Teeth Market 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Colgate: Regaining Leadership in India's Sensitive Teeth Market firm has clearly differentiated products in the market place. This has enabled Colgate Palmolive to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Colgate Palmolive to invest into research and development (R&D) and innovation.
Ability to lead change in Sales & Marketing field
– Colgate Palmolive 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 Colgate Palmolive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Colgate Palmolive 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 Colgate Palmolive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Colgate: Regaining Leadership in India's Sensitive Teeth Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Colgate Palmolive 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 Doreen Kum 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 Colgate Palmolive in the sector have low bargaining power. Colgate: Regaining Leadership in India's Sensitive Teeth Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Colgate Palmolive to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Colgate: Regaining Leadership in India's Sensitive Teeth Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colgate: Regaining Leadership in India's Sensitive Teeth Market are -
No frontier risks strategy
– After analyzing the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, 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.
High cash cycle compare to competitors
Colgate Palmolive 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.
Lack of clear differentiation of Colgate Palmolive products
– To increase the profitability and margins on the products, Colgate Palmolive needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Colgate Palmolive has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Colgate Palmolive even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, is just above the industry average. Colgate Palmolive 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, in the dynamic environment Colgate Palmolive has struggled to respond to the nimble upstart competition. Colgate Palmolive has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Colgate: Regaining Leadership in India's Sensitive Teeth Market HBR case study mentions - Colgate Palmolive 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, Colgate Palmolive 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.
Products dominated business model
– Even though Colgate Palmolive 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: Regaining Leadership in India's Sensitive Teeth Market should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market can leverage the sales team experience to cultivate customer relationships as Colgate Palmolive is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, it seems that the employees of Colgate Palmolive don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Colgate: Regaining Leadership in India's Sensitive Teeth Market | 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: Regaining Leadership in India's Sensitive Teeth Market are -
Building a culture of innovation
– managers at Colgate Palmolive 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.
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. Colgate Palmolive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Colgate Palmolive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Colgate Palmolive can use these opportunities to build new business models that can help the communities that Colgate Palmolive operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Using analytics as competitive advantage
– Colgate Palmolive 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Colgate Palmolive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Colgate Palmolive 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.
Learning at scale
– Online learning technologies has now opened space for Colgate Palmolive 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.
Leveraging digital technologies
– Colgate Palmolive 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.
Developing new processes and practices
– Colgate Palmolive 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.
Creating value in data economy
– The success of analytics program of Colgate Palmolive has opened avenues for new revenue streams for the organization in the industry. This can help Colgate Palmolive to build a more holistic ecosystem as suggested in the Colgate: Regaining Leadership in India's Sensitive Teeth Market case study. Colgate Palmolive can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Colgate Palmolive can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Colgate: Regaining Leadership in India's Sensitive Teeth Market 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.
Manufacturing automation
– Colgate Palmolive 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Colgate Palmolive is facing challenges because of the dominance of functional experts in the organization. Colgate: Regaining Leadership in India's Sensitive Teeth Market case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Colgate: Regaining Leadership in India's Sensitive Teeth Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market are -
Consumer confidence and its impact on Colgate Palmolive 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.
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 Colgate Palmolive business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Colgate Palmolive is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Colgate Palmolive
– 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 Colgate Palmolive.
Stagnating economy with rate increase
– Colgate Palmolive can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Colgate Palmolive in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Colgate Palmolive 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: Regaining Leadership in India's Sensitive Teeth Market .
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. Colgate Palmolive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Colgate Palmolive needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Colgate Palmolive 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.
High dependence on third party suppliers
– Colgate Palmolive 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.
Weighted SWOT Analysis of Colgate: Regaining Leadership in India's Sensitive Teeth Market 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: Regaining Leadership in India's Sensitive Teeth Market 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: Regaining Leadership in India's Sensitive Teeth Market 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: Regaining Leadership in India's Sensitive Teeth Market 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: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate Palmolive needs to make to build a sustainable competitive advantage.