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 - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, technology disruption, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, there is backlash against globalization, 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.
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.
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.
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.
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.
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.
Highly skilled collaborators
– Muccio Supplier 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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
– 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.
Strong track record of project management
– Muccio Supplier is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Muccio Supplier in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Muccio Supplier has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Muccio Supplier to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 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.
Aligning sales with marketing
– It come across in the case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) can leverage the sales team experience to cultivate customer relationships as Muccio Supplier is planning to shift buying processes online.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Muccio Supplier is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential 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.
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.
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 Muccio Supplier supply chain. Even after few cautionary changes mentioned in the HBR case study - Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Muccio Supplier vulnerable to further global disruptions in South East Asia.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A), it seems that the employees of Muccio Supplier 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.
Interest costs
– Compare to the competition, Muccio Supplier 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.
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 -
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Muccio Supplier 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.
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.
Better consumer reach
– The expansion of the 5G network will help Muccio Supplier to increase its market reach. Muccio Supplier 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.
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 Muccio Supplier in the consumer business. Now Muccio Supplier can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Learning at scale
– Online learning technologies has now opened space for Muccio Supplier 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.
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.
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.
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.
Using analytics as competitive advantage
– Muccio Supplier 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Muccio Supplier to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Muccio Supplier can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Muccio Supplier can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A), Muccio Supplier 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 .
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 Muccio Supplier in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
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.
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.
Increasing wage structure of Muccio Supplier
– 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 Muccio Supplier.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Muccio Supplier 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 Tom Muccio: Negotiating the P&G Relationship with Wal-Mart (A) .
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.