Case Study Description of BASF: Corporate Advertising for 1992
Describes BASF's corporate advertising program in the United States. In 1992, BASF's U.S. companies extended an existing corporate advertising campaign to continue to build awareness of the German-based multinational's corporate identity. The core theme of the campaign is "We don't make the products you buy ... we make the products you buy better." The campaign appears only on television. The goals, target audiences, messages, media, budget, and approaches to evaluation are described. Acquaints students with the objectives and detailed program specifics of corporate advertising campaigns. Examines how a non-U.S. based company seeks to build corporate awareness and identity in the U.S. despite having only a single company-branded consumer product.
Swot Analysis of "BASF: Corporate Advertising for 1992" written by Stephen A. Greyser, Norman Klein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Basf's Corporate facing as an external strategic factors. Some of the topics covered in BASF: Corporate Advertising for 1992 case study are - Strategic Management Strategies, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the BASF: Corporate Advertising for 1992 casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing commodity prices, increasing energy prices, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of BASF: Corporate Advertising for 1992
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BASF: Corporate Advertising for 1992 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Basf's Corporate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Basf's Corporate 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 BASF: Corporate Advertising for 1992 can be done for the following purposes –
1. Strategic planning using facts provided in BASF: Corporate Advertising for 1992 case study
2. Improving business portfolio management of Basf's Corporate
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 Basf's Corporate
Strengths BASF: Corporate Advertising for 1992 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Basf's Corporate in BASF: Corporate Advertising for 1992 Harvard Business Review case study are -
Diverse revenue streams
– Basf's Corporate is present in almost all the verticals within the industry. This has provided firm in BASF: Corporate Advertising for 1992 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.
Strong track record of project management
– Basf's Corporate is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Basf's Corporate in the sector have low bargaining power. BASF: Corporate Advertising for 1992 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Basf's Corporate to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Basf's Corporate 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 Basf's Corporate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in BASF: Corporate Advertising for 1992 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Basf's Corporate 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 switching costs
– The high switching costs that Basf's Corporate 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.
Operational resilience
– The operational resilience strategy in the BASF: Corporate Advertising for 1992 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.
Analytics focus
– Basf's Corporate 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 Stephen A. Greyser, Norman Klein 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.
Successful track record of launching new products
– Basf's Corporate has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Basf's Corporate 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.
Ability to lead change in Sales & Marketing field
– Basf's Corporate 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 Basf's Corporate in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Basf's Corporate digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Basf's Corporate 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.
Sustainable margins compare to other players in Sales & Marketing industry
– BASF: Corporate Advertising for 1992 firm has clearly differentiated products in the market place. This has enabled Basf's Corporate to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Basf's Corporate to invest into research and development (R&D) and innovation.
Weaknesses BASF: Corporate Advertising for 1992 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BASF: Corporate Advertising for 1992 are -
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen A. Greyser, Norman Klein suggests that, Basf's Corporate 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.
No frontier risks strategy
– After analyzing the HBR case study BASF: Corporate Advertising for 1992, 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.
Aligning sales with marketing
– It come across in the case study BASF: Corporate Advertising for 1992 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 BASF: Corporate Advertising for 1992 can leverage the sales team experience to cultivate customer relationships as Basf's Corporate is planning to shift buying processes online.
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 Basf's Corporate supply chain. Even after few cautionary changes mentioned in the HBR case study - BASF: Corporate Advertising for 1992, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Basf's Corporate vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Basf's Corporate 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BASF: Corporate Advertising for 1992, is just above the industry average. Basf's Corporate 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.
Low market penetration in new markets
– Outside its home market of Basf's Corporate, firm in the HBR case study BASF: Corporate Advertising for 1992 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Basf's Corporate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BASF: Corporate Advertising for 1992 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
– Basf's Corporate 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 cash cycle compare to competitors
Basf's Corporate 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.
Interest costs
– Compare to the competition, Basf's Corporate 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 BASF: Corporate Advertising for 1992 | 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 BASF: Corporate Advertising for 1992 are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Basf's Corporate 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.
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. Basf's Corporate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Basf's Corporate 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 BASF: Corporate Advertising for 1992 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Basf's Corporate to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Basf's Corporate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Basf's Corporate 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 Basf's Corporate to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Basf's Corporate 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Basf's Corporate can use these opportunities to build new business models that can help the communities that Basf's Corporate operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Basf's Corporate in the consumer business. Now Basf's Corporate 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. Basf's Corporate 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. Basf's Corporate 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Basf's Corporate is facing challenges because of the dominance of functional experts in the organization. BASF: Corporate Advertising for 1992 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.
Better consumer reach
– The expansion of the 5G network will help Basf's Corporate to increase its market reach. Basf's Corporate 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Basf's Corporate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Basf's Corporate 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.
Threats BASF: Corporate Advertising for 1992 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BASF: Corporate Advertising for 1992 are -
Stagnating economy with rate increase
– Basf's Corporate 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.
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 Basf's Corporate 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. Basf's Corporate needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Environmental challenges
– Basf's Corporate 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. Basf's Corporate can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Basf's Corporate 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.
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 Basf's Corporate business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Basf's Corporate has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Basf's Corporate 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.
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.
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. Basf's Corporate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Basf's Corporate 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 wage structure of Basf's Corporate
– 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 Basf's Corporate.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Basf's Corporate 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 BASF: Corporate Advertising for 1992 .
Consumer confidence and its impact on Basf's Corporate 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 BASF: Corporate Advertising for 1992 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 BASF: Corporate Advertising for 1992 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 BASF: Corporate Advertising for 1992 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 BASF: Corporate Advertising for 1992 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 BASF: Corporate Advertising for 1992 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 Basf's Corporate needs to make to build a sustainable competitive advantage.
