Case Study Description of Colgate: Regaining Leadership in India's Sensitive Teeth Market
In April 2013, Colgate-Palmolive, a long-term front runner in a consumer goods business that specialized in oral care products, lost its dominance for the sensitive teeth toothpaste market in India. It was a dominance that Colgate-Palmolive had managed to build over the years by being a first mover and by leveraging its reputation as a leader in oral care products. However, new global and local competitors entered the market with diverse product variants and aggressive marketing campaigns, and started to erode the company's market share. By mid-2013, the fight for market share was fierce and on the verge of becoming even more intense. Could Colgate-Palmolive regain its dominance? How should the company navigate these extremely competitive tides to regain its lost market share? Doreen Kum is affiliated with NUS Business School.
Swot Analysis of "Colgate: Regaining Leadership in India's Sensitive Teeth Market" written by Doreen Kum includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Colgate Palmolive facing as an external strategic factors. Some of the topics covered in Colgate: Regaining Leadership in India's Sensitive Teeth Market case study are - Strategic Management Strategies, Customers, Emerging markets and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Colgate: Regaining Leadership in India's Sensitive Teeth Market casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing energy prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Colgate: Regaining Leadership in India's Sensitive Teeth Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Colgate: Regaining Leadership in India's Sensitive Teeth Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Colgate Palmolive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Colgate Palmolive 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market can be done for the following purposes –
1. Strategic planning using facts provided in Colgate: Regaining Leadership in India's Sensitive Teeth Market case study
2. Improving business portfolio management of Colgate Palmolive
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 Colgate Palmolive
Strengths Colgate: Regaining Leadership in India's Sensitive Teeth Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Colgate Palmolive in Colgate: Regaining Leadership in India's Sensitive Teeth Market Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Colgate: Regaining Leadership in India's Sensitive Teeth Market firm has clearly differentiated products in the market place. This has enabled Colgate Palmolive to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Colgate Palmolive to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Colgate Palmolive 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Colgate Palmolive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Colgate Palmolive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Colgate Palmolive 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Colgate Palmolive in the sector have low bargaining power. Colgate: Regaining Leadership in India's Sensitive Teeth Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Colgate Palmolive to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Colgate Palmolive
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Colgate Palmolive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Colgate Palmolive 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 Colgate Palmolive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Colgate Palmolive 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 Colgate Palmolive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Colgate: Regaining Leadership in India's Sensitive Teeth Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Colgate Palmolive is one of the most innovative firm in sector. Manager in Colgate: Regaining Leadership in India's Sensitive Teeth Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Colgate Palmolive has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate Palmolive 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.
Diverse revenue streams
– Colgate Palmolive is present in almost all the verticals within the industry. This has provided firm in Colgate: Regaining Leadership in India's Sensitive Teeth Market 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.
Weaknesses Colgate: Regaining Leadership in India's Sensitive Teeth Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colgate: Regaining Leadership in India's Sensitive Teeth Market are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, it seems that the employees of Colgate Palmolive 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.
Increasing silos among functional specialists
– The organizational structure of Colgate Palmolive is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Colgate Palmolive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Colgate Palmolive to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Colgate Palmolive 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.
Aligning sales with marketing
– It come across in the case study Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market can leverage the sales team experience to cultivate customer relationships as Colgate Palmolive is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Colgate Palmolive is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Colgate: Regaining Leadership in India's Sensitive Teeth Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential 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 Colgate Palmolive supply chain. Even after few cautionary changes mentioned in the HBR case study - Colgate: Regaining Leadership in India's Sensitive Teeth Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Colgate Palmolive vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Colgate: Regaining Leadership in India's Sensitive Teeth Market HBR case study mentions - Colgate Palmolive 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.
Capital Spending Reduction
– Even during the low interest decade, Colgate Palmolive 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.
Lack of clear differentiation of Colgate Palmolive products
– To increase the profitability and margins on the products, Colgate Palmolive needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Colgate Palmolive has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate Palmolive 's lucrative customers.
Opportunities Colgate: Regaining Leadership in India's Sensitive Teeth Market | 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market are -
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 Colgate Palmolive 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Colgate Palmolive can use these opportunities to build new business models that can help the communities that Colgate Palmolive operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Colgate Palmolive 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, Colgate: Regaining Leadership in India's Sensitive Teeth Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Colgate Palmolive can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Colgate: Regaining Leadership in India's Sensitive Teeth Market 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.
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 Colgate Palmolive in the consumer business. Now Colgate Palmolive can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Colgate Palmolive has opened avenues for new revenue streams for the organization in the industry. This can help Colgate Palmolive to build a more holistic ecosystem as suggested in the Colgate: Regaining Leadership in India's Sensitive Teeth Market case study. Colgate Palmolive can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Colgate Palmolive 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.
Using analytics as competitive advantage
– Colgate Palmolive 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Colgate Palmolive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Colgate Palmolive 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
– Colgate Palmolive 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.
Building a culture of innovation
– managers at Colgate Palmolive 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Colgate Palmolive is facing challenges because of the dominance of functional experts in the organization. Colgate: Regaining Leadership in India's Sensitive Teeth Market 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.
Leveraging digital technologies
– Colgate Palmolive 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.
Threats Colgate: Regaining Leadership in India's Sensitive Teeth Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market are -
High dependence on third party suppliers
– Colgate Palmolive 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.
Shortening product life cycle
– it is one of the major threat that Colgate Palmolive is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Colgate Palmolive 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.
Increasing wage structure of Colgate Palmolive
– 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 Colgate Palmolive.
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 Colgate Palmolive 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 Colgate Palmolive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Colgate Palmolive 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Colgate Palmolive 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Colgate Palmolive needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Colgate Palmolive has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Colgate Palmolive 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.
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 Colgate Palmolive.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Colgate Palmolive 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.
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 Colgate Palmolive in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate Palmolive needs to make to build a sustainable competitive advantage.
