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 - – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
wage bills are increasing, technology disruption, 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 -
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.
Low bargaining power of suppliers
– Suppliers of Promotions Sales in the sector have low bargaining power. Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Promotions Sales to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Promotions Sales is one of the most innovative firm in sector. Manager in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) 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
– 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Promotions Sales digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Promotions Sales 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.
Organizational Resilience of Promotions Sales
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Promotions Sales does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) firm has clearly differentiated products in the market place. This has enabled Promotions Sales to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Promotions Sales to invest into research and development (R&D) and innovation.
Learning organization
- Promotions Sales 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 Promotions Sales is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case), it seems that the employees of Promotions Sales 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.
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.
Slow to strategic competitive environment developments
– As Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) HBR case study mentions - Promotions Sales takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Promotions Sales 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case), in the dynamic environment Promotions Sales has struggled to respond to the nimble upstart competition. Promotions Sales has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 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.
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.
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.
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 -
Using analytics as competitive advantage
– Promotions Sales 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Promotions Sales to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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 Promotions Sales in the consumer business. Now Promotions Sales can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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. Promotions Sales can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Promotions Sales can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Promotions Sales 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.
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.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Promotions Sales 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 Giant Consumer Products: The Sales Promotion Resource Allocation Decision (Brief Case) .
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Promotions Sales has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Promotions Sales 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. 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Promotions Sales with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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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