Value Pricing at Procter & Gamble (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Value Pricing at Procter & Gamble (B)
The transition to value pricing required changes in product development as well as in the roles of brand managers and the sales force, and coincided with a significant drop in both shipments and sales. In championing such a radical change, Durk Jager had put not only his own job on the line, but also the fate of the entire company.
Swot Analysis of "Value Pricing at Procter & Gamble (B)" written by Rajiv Lal, Mitchell Kristofferson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Durk Jager facing as an external strategic factors. Some of the topics covered in Value Pricing at Procter & Gamble (B) case study are - Strategic Management Strategies, Pricing, Reorganization and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Value Pricing at Procter & Gamble (B) casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Value Pricing at Procter & Gamble (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Value Pricing at Procter & Gamble (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Durk Jager, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Durk Jager 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 Value Pricing at Procter & Gamble (B) can be done for the following purposes –
1. Strategic planning using facts provided in Value Pricing at Procter & Gamble (B) case study
2. Improving business portfolio management of Durk Jager
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 Durk Jager
Strengths Value Pricing at Procter & Gamble (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Durk Jager in Value Pricing at Procter & Gamble (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Value Pricing at Procter & Gamble (B) firm has clearly differentiated products in the market place. This has enabled Durk Jager to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Durk Jager to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Durk Jager 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 Value Pricing at Procter & Gamble (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Durk Jager is one of the most innovative firm in sector. Manager in Value Pricing at Procter & Gamble (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Durk Jager 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 Durk Jager is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Value Pricing at Procter & Gamble (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Durk Jager is present in almost all the verticals within the industry. This has provided firm in Value Pricing at Procter & Gamble (B) 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.
Highly skilled collaborators
– Durk Jager 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 Value Pricing at Procter & Gamble (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Durk Jager in the sector have low bargaining power. Value Pricing at Procter & Gamble (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Durk Jager to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Value Pricing at Procter & Gamble (B) 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.
Ability to recruit top talent
– Durk Jager is one of the leading recruiters in the industry. Managers in the Value Pricing at Procter & Gamble (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Durk Jager 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 Rajiv Lal, Mitchell Kristofferson 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.
High switching costs
– The high switching costs that Durk Jager 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Durk Jager digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Durk Jager 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.
Weaknesses Value Pricing at Procter & Gamble (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Value Pricing at Procter & Gamble (B) are -
No frontier risks strategy
– After analyzing the HBR case study Value Pricing at Procter & Gamble (B), 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.
Lack of clear differentiation of Durk Jager products
– To increase the profitability and margins on the products, Durk Jager needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Durk Jager is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Durk Jager needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Durk Jager to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Value Pricing at Procter & Gamble (B), in the dynamic environment Durk Jager has struggled to respond to the nimble upstart competition. Durk Jager has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Durk Jager 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.
Slow decision making process
– As mentioned earlier in the report, Durk Jager 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. Durk Jager 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.
Interest costs
– Compare to the competition, Durk Jager 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Value Pricing at Procter & Gamble (B), is just above the industry average. Durk Jager 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 Value Pricing at Procter & Gamble (B) 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 Value Pricing at Procter & Gamble (B) can leverage the sales team experience to cultivate customer relationships as Durk Jager is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Durk Jager 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.
Need for greater diversity
– Durk Jager 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.
Opportunities Value Pricing at Procter & Gamble (B) | 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 Value Pricing at Procter & Gamble (B) are -
Creating value in data economy
– The success of analytics program of Durk Jager has opened avenues for new revenue streams for the organization in the industry. This can help Durk Jager to build a more holistic ecosystem as suggested in the Value Pricing at Procter & Gamble (B) case study. Durk Jager can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Durk Jager 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.
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. Durk Jager can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Durk Jager can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Value Pricing at Procter & Gamble (B) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Durk Jager 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 Durk Jager to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Durk Jager to increase its market reach. Durk Jager 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Durk Jager is facing challenges because of the dominance of functional experts in the organization. Value Pricing at Procter & Gamble (B) 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.
Loyalty marketing
– Durk Jager 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Durk Jager can use these opportunities to build new business models that can help the communities that Durk Jager operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Using analytics as competitive advantage
– Durk Jager 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 Value Pricing at Procter & Gamble (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Durk Jager to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Durk Jager 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, Value Pricing at Procter & Gamble (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Durk Jager to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Durk Jager can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Value Pricing at Procter & Gamble (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Value Pricing at Procter & Gamble (B) 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 Durk Jager in the Sales & Marketing sector and impact the bottomline of the organization.
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.
Technology acceleration in Forth Industrial Revolution
– Durk Jager has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Durk Jager 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.
Increasing wage structure of Durk Jager
– 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 Durk Jager.
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 Durk Jager.
High dependence on third party suppliers
– Durk Jager 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.
Shortening product life cycle
– it is one of the major threat that Durk Jager is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Durk Jager 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Durk Jager with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Value Pricing at Procter & Gamble (B), Durk Jager 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 .
Regulatory challenges
– Durk Jager 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.
Stagnating economy with rate increase
– Durk Jager can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Value Pricing at Procter & Gamble (B) 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 Value Pricing at Procter & Gamble (B) 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 Value Pricing at Procter & Gamble (B) 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 Value Pricing at Procter & Gamble (B) 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 Value Pricing at Procter & Gamble (B) 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 Durk Jager needs to make to build a sustainable competitive advantage.