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 transportation and logistics costs, talent flight as more people leaving formal jobs, there is backlash against globalization, wage bills are increasing, increasing commodity prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, increasing energy prices, 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 -
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.
Operational resilience
– The operational resilience strategy in the Colgate: Regaining Leadership in India's Sensitive Teeth Market 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.
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.
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.
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.
Strong track record of project management
– Colgate Palmolive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Colgate Palmolive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Colgate Palmolive 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.
Analytics focus
– Colgate Palmolive 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 Doreen Kum 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.
High switching costs
– The high switching costs that Colgate Palmolive 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.
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.
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 -
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, is just above the industry average. Colgate Palmolive 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Colgate: Regaining Leadership in India's Sensitive Teeth Market 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 Colgate Palmolive has relatively successful track record of launching new products.
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.
Products dominated business model
– Even though Colgate Palmolive 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 - Colgate: Regaining Leadership in India's Sensitive Teeth Market should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Colgate Palmolive needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 -
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.
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.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Colgate Palmolive in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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.
Better consumer reach
– The expansion of the 5G network will help Colgate Palmolive to increase its market reach. Colgate Palmolive 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Colgate Palmolive 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.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Colgate: Regaining Leadership in India's Sensitive Teeth Market, Colgate Palmolive 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 .
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.
Environmental challenges
– Colgate Palmolive 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. Colgate Palmolive can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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.
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.
Stagnating economy with rate increase
– Colgate Palmolive 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.
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.
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.
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 .
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.
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.
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.