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 - – cloud computing is disrupting traditional business models, technology disruption, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, 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,
competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, 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 -
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.
Learning organization
- Pheromones Erox 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 Pheromones Erox is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Erox Corp.: Leverage Marketing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Successful track record of launching new products
– Pheromones Erox has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pheromones Erox 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.
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.
Organizational Resilience of Pheromones Erox
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pheromones Erox does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Pheromones Erox 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 Pheromones Erox in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Pheromones Erox 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 Thomas J. Kosnik, Gary Frank 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.
Low bargaining power of suppliers
– Suppliers of Pheromones Erox in the sector have low bargaining power. Erox Corp.: Leverage Marketing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pheromones Erox to manage not only supply disruptions but also source products at highly competitive prices.
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.
Effective Research and Development (R&D)
– Pheromones Erox 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 Erox Corp.: Leverage Marketing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 operating costs
– Compare to the competitors, firm in the HBR case study Erox Corp.: Leverage Marketing has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Pheromones Erox 's lucrative customers.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Erox Corp.: Leverage Marketing, is just above the industry average. Pheromones Erox needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study 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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Pheromones Erox 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.
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 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.
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.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pheromones Erox can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Erox Corp.: Leverage Marketing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Creating value in data economy
– The success of analytics program of Pheromones Erox has opened avenues for new revenue streams for the organization in the industry. This can help Pheromones Erox to build a more holistic ecosystem as suggested in the Erox Corp.: Leverage Marketing case study. Pheromones Erox can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Pheromones Erox in the consumer business. Now Pheromones Erox can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Building a culture of innovation
– managers at Pheromones Erox 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.
Loyalty marketing
– Pheromones Erox 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.
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.
Developing new processes and practices
– Pheromones Erox 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pheromones Erox 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 Pheromones Erox to hire the very best people irrespective of their geographical location.
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 -
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Erox Corp.: Leverage Marketing, Pheromones Erox 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 .
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.
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. Pheromones Erox needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
Consumer confidence and its impact on Pheromones Erox 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pheromones Erox 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.
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.
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 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.
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.
