Sondologics: Product Diversion and MAP Violations in Internet Channels SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sondologics: Product Diversion and MAP Violations in Internet Channels
Sondologics, a manufacturer of video, audio, and gaming accessories products, was experiencing pricing and distribution problems in its channels. Numerous retailers were complaining about unfair price competition from unauthorized retailers, i.e., gray marketers, on standalone websites or Amazon's Marketplace, offering discounts of up to 30% off list price. The company estimated that about 10% of its retail volume in the United States was being generated by unauthorized retailers. Compounding the problem, gray marketers and authorized retailers alike were selling at below-list prices, which violated the Sondologics MAP (minimum advertised pricing) policy. Sondologics was considering numerous initiatives to address the MAP and gray-market problems, including retaining a third-party service to monitor pricing and distribution in the channel. Students are asked to develop recommendations that would promote sales while protecting the name-brand image and price points of Sondologics' products.
Swot Analysis of "Sondologics: Product Diversion and MAP Violations in Internet Channels" written by Anne Coughlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sondologics Gray facing as an external strategic factors. Some of the topics covered in Sondologics: Product Diversion and MAP Violations in Internet Channels case study are - Strategic Management Strategies, Marketing, Pricing, Product development and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Sondologics: Product Diversion and MAP Violations in Internet Channels casestudy better are - – technology disruption, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , wage bills are increasing, there is backlash against globalization, there is increasing trade war between United States & China,
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 Sondologics: Product Diversion and MAP Violations in Internet Channels
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sondologics: Product Diversion and MAP Violations in Internet Channels case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sondologics Gray, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sondologics Gray 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 Sondologics: Product Diversion and MAP Violations in Internet Channels can be done for the following purposes –
1. Strategic planning using facts provided in Sondologics: Product Diversion and MAP Violations in Internet Channels case study
2. Improving business portfolio management of Sondologics Gray
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 Sondologics Gray
Strengths Sondologics: Product Diversion and MAP Violations in Internet Channels | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sondologics Gray in Sondologics: Product Diversion and MAP Violations in Internet Channels Harvard Business Review case study are -
Diverse revenue streams
– Sondologics Gray is present in almost all the verticals within the industry. This has provided firm in Sondologics: Product Diversion and MAP Violations in Internet Channels 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.
Analytics focus
– Sondologics Gray 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 Anne Coughlan 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.
High switching costs
– The high switching costs that Sondologics Gray 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.
Successful track record of launching new products
– Sondologics Gray has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sondologics Gray 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.
Training and development
– Sondologics Gray has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sondologics: Product Diversion and MAP Violations in Internet Channels 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.
Ability to lead change in Sales & Marketing field
– Sondologics Gray 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 Sondologics Gray in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Sondologics: Product Diversion and MAP Violations in Internet Channels 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.
Cross disciplinary teams
– Horizontal connected teams at the Sondologics Gray 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Sondologics Gray digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sondologics Gray 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.
Superior customer experience
– The customer experience strategy of Sondologics Gray in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Sondologics Gray has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sondologics Gray to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Sales & Marketing industry
– Sondologics: Product Diversion and MAP Violations in Internet Channels firm has clearly differentiated products in the market place. This has enabled Sondologics Gray to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Sondologics Gray to invest into research and development (R&D) and innovation.
Weaknesses Sondologics: Product Diversion and MAP Violations in Internet Channels | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sondologics: Product Diversion and MAP Violations in Internet Channels are -
No frontier risks strategy
– After analyzing the HBR case study Sondologics: Product Diversion and MAP Violations in Internet Channels, 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.
Increasing silos among functional specialists
– The organizational structure of Sondologics Gray is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Sondologics Gray needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sondologics Gray to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Sondologics Gray 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.
Aligning sales with marketing
– It come across in the case study Sondologics: Product Diversion and MAP Violations in Internet Channels 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 Sondologics: Product Diversion and MAP Violations in Internet Channels can leverage the sales team experience to cultivate customer relationships as Sondologics Gray is planning to shift buying processes online.
Products dominated business model
– Even though Sondologics Gray 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 - Sondologics: Product Diversion and MAP Violations in Internet Channels should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sondologics: Product Diversion and MAP Violations in Internet Channels, in the dynamic environment Sondologics Gray has struggled to respond to the nimble upstart competition. Sondologics Gray has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sondologics Gray is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sondologics: Product Diversion and MAP Violations in Internet Channels can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Sondologics Gray, firm in the HBR case study Sondologics: Product Diversion and MAP Violations in Internet Channels needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Sondologics Gray has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on 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 Sondologics Gray supply chain. Even after few cautionary changes mentioned in the HBR case study - Sondologics: Product Diversion and MAP Violations in Internet Channels, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sondologics Gray vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Sondologics: Product Diversion and MAP Violations in Internet Channels HBR case study mentions - Sondologics Gray 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 Sondologics: Product Diversion and MAP Violations in Internet Channels | 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 Sondologics: Product Diversion and MAP Violations in Internet Channels are -
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. Sondologics Gray can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Sondologics Gray 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.
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 Sondologics Gray in the consumer business. Now Sondologics Gray can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sondologics Gray can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Sondologics Gray can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Sondologics Gray has opened avenues for new revenue streams for the organization in the industry. This can help Sondologics Gray to build a more holistic ecosystem as suggested in the Sondologics: Product Diversion and MAP Violations in Internet Channels case study. Sondologics Gray can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Sondologics Gray can use these opportunities to build new business models that can help the communities that Sondologics Gray operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Sondologics Gray to increase its market reach. Sondologics Gray 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.
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. Sondologics Gray can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Sondologics Gray 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.
Using analytics as competitive advantage
– Sondologics Gray 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 Sondologics: Product Diversion and MAP Violations in Internet Channels - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sondologics Gray to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Sondologics Gray 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.
Building a culture of innovation
– managers at Sondologics Gray 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.
Buying journey improvements
– Sondologics Gray can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sondologics: Product Diversion and MAP Violations in Internet Channels 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.
Threats Sondologics: Product Diversion and MAP Violations in Internet Channels External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sondologics: Product Diversion and MAP Violations in Internet Channels are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sondologics Gray 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 Sondologics: Product Diversion and MAP Violations in Internet Channels .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sondologics: Product Diversion and MAP Violations in Internet Channels, Sondologics Gray 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sondologics Gray 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.
High dependence on third party suppliers
– Sondologics Gray 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.
Regulatory challenges
– Sondologics Gray 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.
Stagnating economy with rate increase
– Sondologics Gray 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sondologics Gray with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Sondologics Gray has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Sondologics Gray 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.
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 Sondologics Gray.
Consumer confidence and its impact on Sondologics Gray 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.
Shortening product life cycle
– it is one of the major threat that Sondologics Gray is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Sondologics Gray business can come under increasing regulations regarding data privacy, data security, etc.
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. Sondologics Gray can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Sondologics: Product Diversion and MAP Violations in Internet Channels 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 Sondologics: Product Diversion and MAP Violations in Internet Channels 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 Sondologics: Product Diversion and MAP Violations in Internet Channels 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 Sondologics: Product Diversion and MAP Violations in Internet Channels 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 Sondologics: Product Diversion and MAP Violations in Internet Channels 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 Sondologics Gray needs to make to build a sustainable competitive advantage.