Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A)
Describes the retailer-supplier negotiations of Tom Muccio, one of the earlier Procter & Gamble (P&G) employees to be based in Bentonville, Arkansas, in negotiating the early operational components of the supplier-retailer partnership between P&G and Wal-Mart in the late 1980s. Provides background on the supplier-retailer relationship and negotiation barriers encountered when executing operational components of the partnership.
Swot Analysis of "Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A)" written by James K. Sebenius, Ellen Knebel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Muccio Supplier facing as an external strategic factors. Some of the topics covered in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) case study are - Strategic Management Strategies, Negotiations, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, challanges to central banks by blockchain based private currencies, geopolitical disruptions, there is backlash against globalization, central banks are concerned over increasing inflation,
there is increasing trade war between United States & China, technology disruption, etc
Introduction to SWOT Analysis of Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Muccio Supplier, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Muccio Supplier 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) can be done for the following purposes –
1. Strategic planning using facts provided in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) case study
2. Improving business portfolio management of Muccio Supplier
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 Muccio Supplier
Strengths Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Muccio Supplier in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) Harvard Business Review case study are -
Analytics focus
– Muccio Supplier 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 James K. Sebenius, Ellen Knebel 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.
Successful track record of launching new products
– Muccio Supplier has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Muccio Supplier 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.
Low bargaining power of suppliers
– Suppliers of Muccio Supplier in the sector have low bargaining power. Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Muccio Supplier to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Muccio Supplier has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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.
Innovation driven organization
– Muccio Supplier is one of the most innovative firm in sector. Manager in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– Muccio Supplier 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 Muccio Supplier in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Sales & Marketing industry
– Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) firm has clearly differentiated products in the market place. This has enabled Muccio Supplier to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Muccio Supplier to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Muccio Supplier is present in almost all the verticals within the industry. This has provided firm in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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.
Learning organization
- Muccio Supplier 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 Muccio Supplier is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Muccio Supplier 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.
Operational resilience
– The operational resilience strategy in the Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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
– Muccio Supplier is one of the leading recruiters in the industry. Managers in the Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) are -
High bargaining power of channel partners
– Because of the regulatory requirements, James K. Sebenius, Ellen Knebel suggests that, Muccio Supplier 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Muccio Supplier has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Muccio Supplier 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. Muccio Supplier 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.
Increasing silos among functional specialists
– The organizational structure of Muccio Supplier is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Muccio Supplier needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Muccio Supplier to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Muccio Supplier 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Muccio Supplier 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A), is just above the industry average. Muccio Supplier 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.
Skills based hiring
– The stress on hiring functional specialists at Muccio Supplier has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A), 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.
Capital Spending Reduction
– Even during the low interest decade, Muccio Supplier 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.
Low market penetration in new markets
– Outside its home market of Muccio Supplier, firm in the HBR case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) | 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) are -
Loyalty marketing
– Muccio Supplier 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
– Muccio Supplier 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.
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 Muccio Supplier 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.
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. Muccio Supplier 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. Muccio Supplier 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
– Muccio Supplier 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.
Buying journey improvements
– Muccio Supplier can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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.
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. Muccio Supplier can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Muccio Supplier 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.
Building a culture of innovation
– managers at Muccio Supplier 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.
Leveraging digital technologies
– Muccio Supplier 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Muccio Supplier 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 Muccio Supplier to hire the very best people irrespective of their geographical location.
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. Muccio Supplier can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Muccio Supplier 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, Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) are -
Consumer confidence and its impact on Muccio Supplier 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 Muccio Supplier 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.
Stagnating economy with rate increase
– Muccio Supplier 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Muccio Supplier with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Muccio Supplier is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Muccio Supplier.
High dependence on third party suppliers
– Muccio Supplier 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.
Environmental challenges
– Muccio Supplier 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. Muccio Supplier can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Muccio Supplier needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Muccio Supplier business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Muccio Supplier has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Muccio Supplier 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.
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. Muccio Supplier 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.
Weighted SWOT Analysis of Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Muccio Supplier needs to make to build a sustainable competitive advantage.