Case Study Description of Unilever Canada: Redefining the AXE Brand
In 2015, AXE, one of Unilever's largest and most well-known personal care brands, was experiencing challenges in growing sales across its full product portfolio. Historically, AXE's unique activations and campaigns had been successful in generating high brand awareness and, ultimately, driving sales in Canada. However, sales growth had slowed over the past three years, and the AXE team wondered whether the brand's current messaging still resonated with consumers. The previous year, Unilever's global consumer insights team had conducted significant research to better understand the AXE consumer. The company now needed to prepare and present a client brief to AXE's advertising agency in preparation for a major 2016 campaign.
Swot Analysis of "Unilever Canada: Redefining the AXE Brand" written by Allison Johnson, Lisa-Marie Assenza includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Axe Axe's facing as an external strategic factors. Some of the topics covered in Unilever Canada: Redefining the AXE Brand case study are - Strategic Management Strategies, Manufacturing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Unilever Canada: Redefining the AXE Brand casestudy better are - – technology disruption, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Unilever Canada: Redefining the AXE Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Unilever Canada: Redefining the AXE Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Axe Axe's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Axe Axe's 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 Unilever Canada: Redefining the AXE Brand can be done for the following purposes –
1. Strategic planning using facts provided in Unilever Canada: Redefining the AXE Brand case study
2. Improving business portfolio management of Axe Axe's
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 Axe Axe's
Strengths Unilever Canada: Redefining the AXE Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Axe Axe's in Unilever Canada: Redefining the AXE Brand Harvard Business Review case study are -
Analytics focus
– Axe Axe's 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 Allison Johnson, Lisa-Marie Assenza 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Axe Axe's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Axe Axe's 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.
Learning organization
- Axe Axe's 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 Axe Axe's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Unilever Canada: Redefining the AXE Brand Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Axe Axe's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Axe Axe's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Axe Axe's 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.
Low bargaining power of suppliers
– Suppliers of Axe Axe's in the sector have low bargaining power. Unilever Canada: Redefining the AXE Brand has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Axe Axe's to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Axe Axe's 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Unilever Canada: Redefining the AXE Brand firm has clearly differentiated products in the market place. This has enabled Axe Axe's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Axe Axe's to invest into research and development (R&D) and innovation.
Innovation driven organization
– Axe Axe's is one of the most innovative firm in sector. Manager in Unilever Canada: Redefining the AXE Brand Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Axe Axe's is one of the leading recruiters in the industry. Managers in the Unilever Canada: Redefining the AXE Brand are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Axe Axe's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Axe Axe's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Unilever Canada: Redefining the AXE Brand 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 Unilever Canada: Redefining the AXE Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Unilever Canada: Redefining the AXE Brand are -
High cash cycle compare to competitors
Axe Axe's 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 Axe Axe's products
– To increase the profitability and margins on the products, Axe Axe's needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Axe Axe's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Need for greater diversity
– Axe Axe's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Unilever Canada: Redefining the AXE Brand 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 Axe Axe's 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Allison Johnson, Lisa-Marie Assenza suggests that, Axe Axe's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Unilever Canada: Redefining the AXE Brand, is just above the industry average. Axe Axe's 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.
Aligning sales with marketing
– It come across in the case study Unilever Canada: Redefining the AXE Brand 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 Unilever Canada: Redefining the AXE Brand can leverage the sales team experience to cultivate customer relationships as Axe Axe's is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Axe Axe's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Axe Axe's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Axe Axe's to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Axe Axe's 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 - Unilever Canada: Redefining the AXE Brand should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Axe Axe's 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 Unilever Canada: Redefining the AXE Brand | 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 Unilever Canada: Redefining the AXE Brand are -
Loyalty marketing
– Axe Axe's 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.
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. Axe Axe's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Axe Axe's 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.
Leveraging digital technologies
– Axe Axe's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Axe Axe's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Axe Axe's 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, Unilever Canada: Redefining the AXE Brand, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Axe Axe's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Axe Axe's can use these opportunities to build new business models that can help the communities that Axe Axe's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Axe Axe's is facing challenges because of the dominance of functional experts in the organization. Unilever Canada: Redefining the AXE Brand 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.
Learning at scale
– Online learning technologies has now opened space for Axe Axe's 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.
Creating value in data economy
– The success of analytics program of Axe Axe's has opened avenues for new revenue streams for the organization in the industry. This can help Axe Axe's to build a more holistic ecosystem as suggested in the Unilever Canada: Redefining the AXE Brand case study. Axe Axe's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Axe Axe's 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 Unilever Canada: Redefining the AXE Brand - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Axe Axe's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Axe Axe's 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.
Threats Unilever Canada: Redefining the AXE Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Unilever Canada: Redefining the AXE Brand are -
Technology acceleration in Forth Industrial Revolution
– Axe Axe's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Axe Axe's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Unilever Canada: Redefining the AXE Brand, Axe Axe's 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 .
Shortening product life cycle
– it is one of the major threat that Axe Axe's is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Axe Axe's in the Sales & Marketing sector and impact the bottomline of the organization.
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. Axe Axe's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Axe Axe's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Axe Axe's 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 Unilever Canada: Redefining the AXE Brand .
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. Axe Axe's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Axe Axe's.
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
– Axe Axe's 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 Axe Axe's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Axe Axe's 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.
Weighted SWOT Analysis of Unilever Canada: Redefining the AXE Brand 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 Unilever Canada: Redefining the AXE Brand 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 Unilever Canada: Redefining the AXE Brand 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 Unilever Canada: Redefining the AXE Brand 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 Unilever Canada: Redefining the AXE Brand 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 Axe Axe's needs to make to build a sustainable competitive advantage.
