Case Study Description of Reynolds Metals Co.: Consumer Products Division
Reynolds Consumer Products Division must decide whether to discontinue its program of case allowances in favor of discretionary trade dollars targeted for market development.
Swot Analysis of "Reynolds Metals Co.: Consumer Products Division" written by Samuel Chun includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reynolds Discretionary facing as an external strategic factors. Some of the topics covered in Reynolds Metals Co.: Consumer Products Division case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Reynolds Metals Co.: Consumer Products Division casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, geopolitical disruptions, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Reynolds Metals Co.: Consumer Products Division
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reynolds Metals Co.: Consumer Products Division case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reynolds Discretionary, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reynolds Discretionary 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 Reynolds Metals Co.: Consumer Products Division can be done for the following purposes –
1. Strategic planning using facts provided in Reynolds Metals Co.: Consumer Products Division case study
2. Improving business portfolio management of Reynolds Discretionary
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 Reynolds Discretionary
Strengths Reynolds Metals Co.: Consumer Products Division | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reynolds Discretionary in Reynolds Metals Co.: Consumer Products Division Harvard Business Review case study are -
Effective Research and Development (R&D)
– Reynolds Discretionary 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 Reynolds Metals Co.: Consumer Products Division - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Reynolds Discretionary in the sector have low bargaining power. Reynolds Metals Co.: Consumer Products Division has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Reynolds Discretionary to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Reynolds Discretionary 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 Reynolds Metals Co.: Consumer Products Division HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Sales & Marketing industry
– Reynolds Metals Co.: Consumer Products Division firm has clearly differentiated products in the market place. This has enabled Reynolds Discretionary to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Reynolds Discretionary to invest into research and development (R&D) and innovation.
Strong track record of project management
– Reynolds Discretionary is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Reynolds Discretionary 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.
High brand equity
– Reynolds Discretionary has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reynolds Discretionary to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Reynolds Discretionary
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Reynolds Discretionary does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Reynolds Discretionary digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Reynolds Discretionary 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.
Learning organization
- Reynolds Discretionary 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 Reynolds Discretionary is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reynolds Metals Co.: Consumer Products Division Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Reynolds Discretionary is present in almost all the verticals within the industry. This has provided firm in Reynolds Metals Co.: Consumer Products Division 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.
Ability to recruit top talent
– Reynolds Discretionary is one of the leading recruiters in the industry. Managers in the Reynolds Metals Co.: Consumer Products Division are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Reynolds Metals Co.: Consumer Products Division | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reynolds Metals Co.: Consumer Products Division are -
Interest costs
– Compare to the competition, Reynolds Discretionary 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.
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 Reynolds Discretionary supply chain. Even after few cautionary changes mentioned in the HBR case study - Reynolds Metals Co.: Consumer Products Division, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Reynolds Discretionary vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Reynolds Metals Co.: Consumer Products Division 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 Reynolds Metals Co.: Consumer Products Division can leverage the sales team experience to cultivate customer relationships as Reynolds Discretionary is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Reynolds Metals Co.: Consumer Products Division, 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.
Slow to strategic competitive environment developments
– As Reynolds Metals Co.: Consumer Products Division HBR case study mentions - Reynolds Discretionary 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.
Slow decision making process
– As mentioned earlier in the report, Reynolds Discretionary 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. Reynolds Discretionary 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reynolds Metals Co.: Consumer Products Division, it seems that the employees of Reynolds Discretionary 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.
Low market penetration in new markets
– Outside its home market of Reynolds Discretionary, firm in the HBR case study Reynolds Metals Co.: Consumer Products Division needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reynolds Metals Co.: Consumer Products Division, is just above the industry average. Reynolds Discretionary 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Reynolds Metals Co.: Consumer Products Division 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 Reynolds Discretionary 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Reynolds Discretionary is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reynolds Metals Co.: Consumer Products Division can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Reynolds Metals Co.: Consumer Products Division | 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 Reynolds Metals Co.: Consumer Products Division are -
Better consumer reach
– The expansion of the 5G network will help Reynolds Discretionary to increase its market reach. Reynolds Discretionary 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 Reynolds Discretionary 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
– Reynolds Discretionary 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 Reynolds Metals Co.: Consumer Products Division - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Reynolds Discretionary 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 Reynolds Discretionary in the consumer business. Now Reynolds Discretionary can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Reynolds Discretionary 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Reynolds Discretionary 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, Reynolds Metals Co.: Consumer Products Division, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Reynolds Discretionary 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 Reynolds Discretionary has opened avenues for new revenue streams for the organization in the industry. This can help Reynolds Discretionary to build a more holistic ecosystem as suggested in the Reynolds Metals Co.: Consumer Products Division case study. Reynolds Discretionary can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Reynolds Discretionary 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.
Learning at scale
– Online learning technologies has now opened space for Reynolds Discretionary 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.
Loyalty marketing
– Reynolds Discretionary 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.
Buying journey improvements
– Reynolds Discretionary can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reynolds Metals Co.: Consumer Products Division 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.
Manufacturing automation
– Reynolds Discretionary 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 Reynolds Metals Co.: Consumer Products Division External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reynolds Metals Co.: Consumer Products Division are -
Increasing wage structure of Reynolds Discretionary
– 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 Reynolds Discretionary.
Technology acceleration in Forth Industrial Revolution
– Reynolds Discretionary has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Reynolds Discretionary 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.
Environmental challenges
– Reynolds Discretionary 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. Reynolds Discretionary can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Reynolds Discretionary is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Reynolds Discretionary 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.
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 Reynolds Discretionary in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reynolds Discretionary 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 Reynolds Metals Co.: Consumer Products Division .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reynolds Metals Co.: Consumer Products Division, Reynolds Discretionary 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Reynolds Discretionary with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Regulatory challenges
– Reynolds Discretionary 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Reynolds Discretionary in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High 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. Reynolds Discretionary needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Reynolds Metals Co.: Consumer Products Division 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 Reynolds Metals Co.: Consumer Products Division 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 Reynolds Metals Co.: Consumer Products Division 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 Reynolds Metals Co.: Consumer Products Division 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 Reynolds Metals Co.: Consumer Products Division 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 Reynolds Discretionary needs to make to build a sustainable competitive advantage.