Case Study Description of Selling CFLs at Wal-Mart, Epilogue
In early 2009, Wal-Mart executive Andy Barron realized the firm's lighting business was facing a challenge. After achieving a goal of selling 100 million compact fluorescent light (CFL) bulbs by the end of 2007, sales of the energy-efficient bulbs had started to plateau, leading to a dim outlook for 2009. Barron needed to examine what barriers might be keeping consumers from adopting more of the bulbs, which offer both cost savings and environmental benefits. In this 2-part case students study the historic price points and sales of CFL bulbs, Wal-Mart's 2007 promotion of CFL lighting, and research about consumer adoption of the bulbs in order to understand how the retailer might achieve its goals. The case asks: How can consumer habits be changed? How can new products overcome barriers to adoption? What can managers do to promote sales of new products, given human behavior where biases, values and emotions have an impact on the choices people make? How can economic theories explain consumer behavior as it occurs in the real world? The Epilogue to the first case asks students to discuss what developments occurred after the 2009 implementation and how they impacted CFL sales.
Swot Analysis of "Selling CFLs at Wal-Mart, Epilogue" written by Eric J. Johnson, Daniel M. Bartels includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bulbs Cfl facing as an external strategic factors. Some of the topics covered in Selling CFLs at Wal-Mart, Epilogue case study are - Strategic Management Strategies, Sustainability and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Selling CFLs at Wal-Mart, Epilogue casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing household debt because of falling income levels, there is backlash against globalization, wage bills are increasing, increasing energy prices,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Selling CFLs at Wal-Mart, Epilogue
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Selling CFLs at Wal-Mart, Epilogue case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bulbs Cfl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bulbs Cfl 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 Selling CFLs at Wal-Mart, Epilogue can be done for the following purposes –
1. Strategic planning using facts provided in Selling CFLs at Wal-Mart, Epilogue case study
2. Improving business portfolio management of Bulbs Cfl
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 Bulbs Cfl
Strengths Selling CFLs at Wal-Mart, Epilogue | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bulbs Cfl in Selling CFLs at Wal-Mart, Epilogue Harvard Business Review case study are -
Ability to lead change in Sales & Marketing field
– Bulbs Cfl 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 Bulbs Cfl in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Bulbs Cfl has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bulbs Cfl to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Bulbs Cfl is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Bulbs Cfl 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 Eric J. Johnson, Daniel M. Bartels 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.
Operational resilience
– The operational resilience strategy in the Selling CFLs at Wal-Mart, Epilogue 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.
Organizational Resilience of Bulbs Cfl
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bulbs Cfl does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Bulbs Cfl 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.
Successful track record of launching new products
– Bulbs Cfl has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bulbs Cfl 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.
Innovation driven organization
– Bulbs Cfl is one of the most innovative firm in sector. Manager in Selling CFLs at Wal-Mart, Epilogue Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Bulbs Cfl digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bulbs Cfl has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Selling CFLs at Wal-Mart, Epilogue firm has clearly differentiated products in the market place. This has enabled Bulbs Cfl to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Bulbs Cfl to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Bulbs Cfl 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.
Weaknesses Selling CFLs at Wal-Mart, Epilogue | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Selling CFLs at Wal-Mart, Epilogue are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Selling CFLs at Wal-Mart, Epilogue, in the dynamic environment Bulbs Cfl has struggled to respond to the nimble upstart competition. Bulbs Cfl has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Selling CFLs at Wal-Mart, Epilogue HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bulbs Cfl has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Bulbs Cfl is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Bulbs Cfl needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bulbs Cfl to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Bulbs Cfl 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 Selling CFLs at Wal-Mart, Epilogue, 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 decision making process
– As mentioned earlier in the report, Bulbs Cfl 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. Bulbs Cfl 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.
Aligning sales with marketing
– It come across in the case study Selling CFLs at Wal-Mart, Epilogue 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 Selling CFLs at Wal-Mart, Epilogue can leverage the sales team experience to cultivate customer relationships as Bulbs Cfl is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bulbs Cfl supply chain. Even after few cautionary changes mentioned in the HBR case study - Selling CFLs at Wal-Mart, Epilogue, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bulbs Cfl vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Bulbs Cfl, firm in the HBR case study Selling CFLs at Wal-Mart, Epilogue needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Eric J. Johnson, Daniel M. Bartels suggests that, Bulbs Cfl 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Selling CFLs at Wal-Mart, Epilogue, is just above the industry average. Bulbs Cfl 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.
Opportunities Selling CFLs at Wal-Mart, Epilogue | 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 Selling CFLs at Wal-Mart, Epilogue are -
Developing new processes and practices
– Bulbs Cfl 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.
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. Bulbs Cfl can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Bulbs Cfl 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 Selling CFLs at Wal-Mart, Epilogue - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bulbs Cfl 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 Bulbs Cfl in the consumer business. Now Bulbs Cfl 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 Bulbs Cfl can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bulbs Cfl 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.
Creating value in data economy
– The success of analytics program of Bulbs Cfl has opened avenues for new revenue streams for the organization in the industry. This can help Bulbs Cfl to build a more holistic ecosystem as suggested in the Selling CFLs at Wal-Mart, Epilogue case study. Bulbs Cfl can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Bulbs Cfl 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. Bulbs Cfl 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.
Loyalty marketing
– Bulbs Cfl 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.
Manufacturing automation
– Bulbs Cfl 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bulbs Cfl can use these opportunities to build new business models that can help the communities that Bulbs Cfl operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bulbs Cfl 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 Bulbs Cfl to hire the very best people irrespective of their geographical location.
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. Bulbs Cfl can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Selling CFLs at Wal-Mart, Epilogue External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Selling CFLs at Wal-Mart, Epilogue are -
Regulatory challenges
– Bulbs Cfl 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.
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 Bulbs Cfl 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, Bulbs Cfl 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 Selling CFLs at Wal-Mart, Epilogue .
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.
Environmental challenges
– Bulbs Cfl 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. Bulbs Cfl can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bulbs Cfl in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Bulbs Cfl
– 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 Bulbs Cfl.
Technology acceleration in Forth Industrial Revolution
– Bulbs Cfl has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Bulbs Cfl 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.
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. Bulbs Cfl needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Selling CFLs at Wal-Mart, Epilogue, Bulbs Cfl 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 .
Stagnating economy with rate increase
– Bulbs Cfl 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.
High dependence on third party suppliers
– Bulbs Cfl 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.
Weighted SWOT Analysis of Selling CFLs at Wal-Mart, Epilogue 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 Selling CFLs at Wal-Mart, Epilogue 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 Selling CFLs at Wal-Mart, Epilogue 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 Selling CFLs at Wal-Mart, Epilogue 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 Selling CFLs at Wal-Mart, Epilogue 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 Bulbs Cfl needs to make to build a sustainable competitive advantage.
