Case Study Description of Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case)
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.This case provides students with an opportunity to become familiar with some major strategic issues that firms face when formulating and implementing a sales promotion, including: cannibalization, brand equity erosion, forward-buying, pass-through, and consumer stockpiling. It also provides them an opportunity to utilize retail scanner purchase data in order to evaluate the historical performance of sales promotions. Based on calculating top-line revenue, marketing margin, and return on marketing investment (ROMI) for prior promotions, students can recommend the most financially and strategically defensible initiative from a choice of several competing sales promotions. The setting is the frozen foods category in the consumer packaged goods industry.
Swot Analysis of "Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case)" written by Neeraj Bharadwaj, Phillip D. Delurgio includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Promotions Sales facing as an external strategic factors. Some of the topics covered in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) case study are - Strategic Management Strategies, Budgeting, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) casestudy better are - – technology disruption, increasing energy prices, challanges to central banks by blockchain based private currencies, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Promotions Sales, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Promotions Sales 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) can be done for the following purposes –
1. Strategic planning using facts provided in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) case study
2. Improving business portfolio management of Promotions Sales
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 Promotions Sales
Strengths Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Promotions Sales in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Promotions Sales 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Promotions Sales 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.
Ability to recruit top talent
– Promotions Sales is one of the leading recruiters in the industry. Managers in the Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Promotions Sales 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Promotions Sales has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Promotions Sales to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Promotions Sales in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Promotions Sales 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 Neeraj Bharadwaj, Phillip D. Delurgio 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.
Training and development
– Promotions Sales has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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.
Strong track record of project management
– Promotions Sales is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Promotions Sales is present in almost all the verticals within the industry. This has provided firm in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Sales & Marketing field
– Promotions Sales 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 Promotions Sales in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Promotions Sales 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.
Weaknesses Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) are -
Low market penetration in new markets
– Outside its home market of Promotions Sales, firm in the HBR case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Promotions Sales 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Promotions Sales 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Promotions Sales has relatively successful track record of launching new products.
Products dominated business model
– Even though Promotions Sales has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Promotions Sales 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 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 Promotions Sales supply chain. Even after few cautionary changes mentioned in the HBR case study - Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Promotions Sales vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case), is just above the industry average. Promotions Sales 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.
Increasing silos among functional specialists
– The organizational structure of Promotions Sales is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Promotions Sales needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Promotions Sales to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Promotions Sales 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Neeraj Bharadwaj, Phillip D. Delurgio suggests that, Promotions Sales 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.
Opportunities Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) | 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) are -
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. Promotions Sales 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. Promotions Sales 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
– Promotions Sales 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Promotions Sales 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, Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Promotions Sales is facing challenges because of the dominance of functional experts in the organization. Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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.
Better consumer reach
– The expansion of the 5G network will help Promotions Sales to increase its market reach. Promotions Sales 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.
Leveraging digital technologies
– Promotions Sales 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.
Creating value in data economy
– The success of analytics program of Promotions Sales has opened avenues for new revenue streams for the organization in the industry. This can help Promotions Sales to build a more holistic ecosystem as suggested in the Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) case study. Promotions Sales can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Promotions Sales can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Promotions Sales 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, Promotions Sales can use these opportunities to build new business models that can help the communities that Promotions Sales 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 Promotions Sales 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 Promotions Sales to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Promotions Sales 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.
Developing new processes and practices
– Promotions Sales 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.
Threats Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) are -
Increasing wage structure of Promotions Sales
– 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 Promotions Sales.
Regulatory challenges
– Promotions Sales 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 Promotions Sales business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Promotions Sales 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. Promotions Sales can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Stagnating economy with rate increase
– Promotions Sales 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Promotions Sales 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.
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 Promotions Sales.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case), Promotions Sales 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 .
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.
High dependence on third party suppliers
– Promotions Sales 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.
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. Promotions Sales 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.
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. Promotions Sales can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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 Promotions Sales needs to make to build a sustainable competitive advantage.
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