Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level
Supplement to case IMD780. This three-part case series examines the change management challenge of putting corporate marketing at the top of the corporate executive suite (C-suite) agenda in a business-to-business (B2B) multinational. It follows the four-year journey, from 2010 to 2014, of Mauricio Adade, the newly appointed chief marketing officer (CMO) of Royal DSM - a global leader in life sciences and material sciences headquartered in the Netherlands. The case series, together with the video supplement, delves into the issues faced by the company's top leadership, including Adade, in its effort to transform a diversified industrial company into an organization with best-in-class marketing and sales capabilities. Case A begins by highlighting the culture and organizational structure of Royal DSM and the decision to raise the profile of headquarters-based corporate marketing, with the appointment of Adade in 2010. It discusses the marketing and sales excellence project launched by the new CMO during his first year at the helm and concludes by putting the spotlight on the resistance posed by the company's most powerful stakeholders: the business group leaders. Case B focuses on the implementation journey during the period 2011-2014. Adade and his team adopted a new plan of action and positioned the corporate marketing department as a partner that worked with the business groups to deliver projects with quantifiable results. Did the new strategy work? Case C provides an update on the replacement of Adade (announced in December 2014) and allows for a discussion on the challenges that lie ahead for the new CMO and the organization as a whole.
Swot Analysis of "Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level" written by Wolfgang Ulaga, Athanasios Kondis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adade Dsm facing as an external strategic factors. Some of the topics covered in Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level case study are - Strategic Management Strategies, Change management, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, technology disruption,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adade Dsm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adade Dsm 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level can be done for the following purposes –
1. Strategic planning using facts provided in Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level case study
2. Improving business portfolio management of Adade Dsm
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 Adade Dsm
Strengths Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adade Dsm in Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Adade Dsm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Adade Dsm 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.
Ability to lead change in Sales & Marketing field
– Adade Dsm 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 Adade Dsm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Adade Dsm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Adade Dsm 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.
Training and development
– Adade Dsm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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
– Adade Dsm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level firm has clearly differentiated products in the market place. This has enabled Adade Dsm to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Adade Dsm to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Adade Dsm 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Adade Dsm 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 Wolfgang Ulaga, Athanasios Kondis can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Adade Dsm is one of the leading recruiters in the industry. Managers in the Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Adade Dsm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Adade Dsm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Adade Dsm 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 Adade Dsm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level are -
High bargaining power of channel partners
– Because of the regulatory requirements, Wolfgang Ulaga, Athanasios Kondis suggests that, Adade Dsm 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Adade Dsm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 operating costs
– Compare to the competitors, firm in the HBR case study Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Adade Dsm 's lucrative customers.
Interest costs
– Compare to the competition, Adade Dsm 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Adade Dsm has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Adade Dsm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Adade Dsm even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level, in the dynamic environment Adade Dsm has struggled to respond to the nimble upstart competition. Adade Dsm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Adade Dsm 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.
Lack of clear differentiation of Adade Dsm products
– To increase the profitability and margins on the products, Adade Dsm needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Adade Dsm 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.
Opportunities Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level | 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Adade Dsm can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Adade Dsm 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. Adade Dsm 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.
Using analytics as competitive advantage
– Adade Dsm 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Adade Dsm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Adade Dsm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Adade Dsm is facing challenges because of the dominance of functional experts in the organization. Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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.
Manufacturing automation
– Adade Dsm 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.
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 Adade Dsm 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.
Building a culture of innovation
– managers at Adade Dsm 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.
Developing new processes and practices
– Adade Dsm 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.
Creating value in data economy
– The success of analytics program of Adade Dsm has opened avenues for new revenue streams for the organization in the industry. This can help Adade Dsm to build a more holistic ecosystem as suggested in the Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level case study. Adade Dsm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Adade Dsm 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.
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 Adade Dsm in the consumer business. Now Adade Dsm can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Adade Dsm 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 Adade Dsm to hire the very best people irrespective of their geographical location.
Threats Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adade Dsm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Adade Dsm 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 Adade Dsm 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 Adade Dsm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Adade Dsm in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High 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. Adade Dsm needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level, Adade Dsm 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 .
Stagnating economy with rate increase
– Adade Dsm 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.
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.
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 Adade Dsm business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Adade Dsm 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.
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 Adade Dsm.
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 Adade Dsm in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Royal DSM (C): Taking Marketing & Sales Excellence to the Next Level 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 Adade Dsm needs to make to build a sustainable competitive advantage.