Case Study Description of Erox Corp.: Leverage Marketing
Erox Corp. is a biotechnology start-up that creates products containing synthetic human pheromones. It was founded in 1989, went public in 1993, and brought in a turnaround team in 1994. Sales ramped from $110,000 in 1993 to over $1 million in 1994, with prospects for continued hypergrowth. Pheromones are odorless biochemical cues secreted by people and animals to influence the behavior of others of the same species. Biotechnologists have discovered human pheromones, and Erox has patents protecting its use of synthetic human pheromones for men and women in cosmetic products such as perfumes, colognes, and body lotions. Realm is preparing a national U.S. retail launch of its fragrance product lines: Real for women and Realm for Men. Michael Stern, VP marketing and sales, has developed a successful direct-marketing campaign using a 30-minute infomercial. His challenge is to develop a leveraged marketing communications campaign to support the launch of Realm in Bloomingdales.
Swot Analysis of "Erox Corp.: Leverage Marketing" written by Thomas J. Kosnik, Gary Frank includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pheromones Erox facing as an external strategic factors. Some of the topics covered in Erox Corp.: Leverage Marketing case study are - Strategic Management Strategies, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Erox Corp.: Leverage Marketing casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, increasing commodity prices, challanges to central banks by blockchain based private currencies, wage bills are increasing, central banks are concerned over increasing inflation, increasing energy prices,
talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Erox Corp.: Leverage Marketing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Erox Corp.: Leverage Marketing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pheromones Erox, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pheromones Erox 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 Erox Corp.: Leverage Marketing can be done for the following purposes –
1. Strategic planning using facts provided in Erox Corp.: Leverage Marketing case study
2. Improving business portfolio management of Pheromones Erox
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 Pheromones Erox
Strengths Erox Corp.: Leverage Marketing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pheromones Erox in Erox Corp.: Leverage Marketing Harvard Business Review case study are -
Diverse revenue streams
– Pheromones Erox is present in almost all the verticals within the industry. This has provided firm in Erox Corp.: Leverage Marketing 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Pheromones Erox digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pheromones Erox 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.
Highly skilled collaborators
– Pheromones Erox 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 Erox Corp.: Leverage Marketing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Pheromones Erox 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.
Innovation driven organization
– Pheromones Erox is one of the most innovative firm in sector. Manager in Erox Corp.: Leverage Marketing 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
– Pheromones Erox is one of the leading recruiters in the industry. Managers in the Erox Corp.: Leverage Marketing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Erox Corp.: Leverage Marketing 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 Pheromones Erox 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.
Superior customer experience
– The customer experience strategy of Pheromones Erox in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– Erox Corp.: Leverage Marketing firm has clearly differentiated products in the market place. This has enabled Pheromones Erox to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Pheromones Erox to invest into research and development (R&D) and innovation.
Training and development
– Pheromones Erox has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Erox Corp.: Leverage Marketing 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.
Strong track record of project management
– Pheromones Erox is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Erox Corp.: Leverage Marketing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Erox Corp.: Leverage Marketing are -
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 Pheromones Erox supply chain. Even after few cautionary changes mentioned in the HBR case study - Erox Corp.: Leverage Marketing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pheromones Erox vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Pheromones Erox products
– To increase the profitability and margins on the products, Pheromones Erox needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Pheromones Erox, firm in the HBR case study Erox Corp.: Leverage Marketing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Pheromones Erox 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.
Slow to strategic competitive environment developments
– As Erox Corp.: Leverage Marketing HBR case study mentions - Pheromones Erox 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.
Aligning sales with marketing
– It come across in the case study Erox Corp.: Leverage Marketing 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 Erox Corp.: Leverage Marketing can leverage the sales team experience to cultivate customer relationships as Pheromones Erox is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Pheromones Erox is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Pheromones Erox needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pheromones Erox to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Pheromones Erox 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.
No frontier risks strategy
– After analyzing the HBR case study Erox Corp.: Leverage Marketing, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas J. Kosnik, Gary Frank suggests that, Pheromones Erox 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.
Slow decision making process
– As mentioned earlier in the report, Pheromones Erox 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. Pheromones Erox 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.
Opportunities Erox Corp.: Leverage Marketing | 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 Erox Corp.: Leverage Marketing are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pheromones Erox 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, Pheromones Erox 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.
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. Pheromones Erox can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pheromones Erox can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Pheromones Erox 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 Erox Corp.: Leverage Marketing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pheromones Erox to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Pheromones Erox in the consumer business. Now Pheromones Erox can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Pheromones Erox 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, Pheromones Erox can use these opportunities to build new business models that can help the communities that Pheromones Erox 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 Pheromones Erox to increase its market reach. Pheromones Erox 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.
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. Pheromones Erox 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. Pheromones Erox 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.
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. Pheromones Erox can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Pheromones Erox can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pheromones Erox is facing challenges because of the dominance of functional experts in the organization. Erox Corp.: Leverage Marketing case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Erox Corp.: Leverage Marketing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Erox Corp.: Leverage Marketing are -
Environmental challenges
– Pheromones Erox 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. Pheromones Erox can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pheromones Erox 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 Erox Corp.: Leverage Marketing .
Stagnating economy with rate increase
– Pheromones Erox 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.
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. Pheromones Erox 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.
Increasing wage structure of Pheromones Erox
– 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 Pheromones Erox.
Technology acceleration in Forth Industrial Revolution
– Pheromones Erox has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Pheromones Erox 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.
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 Pheromones Erox in the Sales & Marketing sector and impact the bottomline of the organization.
Regulatory challenges
– Pheromones Erox 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 Pheromones Erox business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Pheromones Erox is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Pheromones Erox can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Pheromones Erox 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.
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.
Weighted SWOT Analysis of Erox Corp.: Leverage Marketing 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 Erox Corp.: Leverage Marketing 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 Erox Corp.: Leverage Marketing 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 Erox Corp.: Leverage Marketing 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 Erox Corp.: Leverage Marketing 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 Pheromones Erox needs to make to build a sustainable competitive advantage.