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 - – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing energy prices, technology disruption, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
Innovation driven organization
– Sondologics Gray is one of the most innovative firm in sector. Manager in Sondologics: Product Diversion and MAP Violations in Internet Channels Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Organizational Resilience of Sondologics Gray
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sondologics Gray 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 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.
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.
Strong track record of project management
– Sondologics Gray is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Sondologics Gray 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 Sondologics: Product Diversion and MAP Violations in Internet Channels - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Sondologics Gray 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 Sondologics: Product Diversion and MAP Violations in Internet Channels HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Sondologics Gray is one of the leading recruiters in the industry. Managers in the Sondologics: Product Diversion and MAP Violations in Internet Channels are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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 -
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.
High cash cycle compare to competitors
Sondologics Gray 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.
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.
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.
Need for greater diversity
– Sondologics Gray 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sondologics: Product Diversion and MAP Violations in Internet Channels, it seems that the employees of Sondologics Gray 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.
Slow decision making process
– As mentioned earlier in the report, Sondologics Gray 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. Sondologics Gray 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.
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.
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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sondologics Gray 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sondologics Gray 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sondologics Gray can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sondologics Gray to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Sondologics Gray to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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.
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.
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.
Manufacturing automation
– Sondologics Gray 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.
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 -
Environmental challenges
– Sondologics Gray 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. Sondologics Gray can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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.
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.
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. Sondologics Gray 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 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.
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.
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. Sondologics Gray 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.
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, 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 .
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.
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.
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.
