Case Study Description of Regal Electrogas: Price Leader or Price Follower
In late June 1987, Mr. Asad Ali, proprietor of Regal Electrogas, was confronted with an important decision regarding the pricing of his company's desert coolers. The market price for this product had risen by approximately 5% in the wake of new taxes introduced in India's national budget, which was announced two weeks earlier. However, the taxes had recently been rescinded in response to public pressure following the announcement. Given this backlash, Asad wondered whether he should reduce his prices immediately.
Swot Analysis of "Regal Electrogas: Price Leader or Price Follower" written by Wasim Azhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Asad Electrogas facing as an external strategic factors. Some of the topics covered in Regal Electrogas: Price Leader or Price Follower case study are - Strategic Management Strategies, Costs, Market research, Performance measurement, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Regal Electrogas: Price Leader or Price Follower casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing energy prices, geopolitical disruptions, increasing commodity prices, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Regal Electrogas: Price Leader or Price Follower
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Regal Electrogas: Price Leader or Price Follower case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asad Electrogas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asad Electrogas 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 Regal Electrogas: Price Leader or Price Follower can be done for the following purposes –
1. Strategic planning using facts provided in Regal Electrogas: Price Leader or Price Follower case study
2. Improving business portfolio management of Asad Electrogas
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 Asad Electrogas
Strengths Regal Electrogas: Price Leader or Price Follower | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asad Electrogas in Regal Electrogas: Price Leader or Price Follower Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Regal Electrogas: Price Leader or Price Follower firm has clearly differentiated products in the market place. This has enabled Asad Electrogas to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Asad Electrogas to invest into research and development (R&D) and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Asad Electrogas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Asad Electrogas 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.
Superior customer experience
– The customer experience strategy of Asad Electrogas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Regal Electrogas: Price Leader or Price Follower 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.
Analytics focus
– Asad Electrogas 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 Wasim Azhar 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.
Successful track record of launching new products
– Asad Electrogas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asad Electrogas has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Asad Electrogas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Asad Electrogas is present in almost all the verticals within the industry. This has provided firm in Regal Electrogas: Price Leader or Price Follower 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.
Organizational Resilience of Asad Electrogas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Asad Electrogas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Asad Electrogas 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 Regal Electrogas: Price Leader or Price Follower HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Asad Electrogas is one of the most innovative firm in sector. Manager in Regal Electrogas: Price Leader or Price Follower Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Asad Electrogas is one of the leading recruiters in the industry. Managers in the Regal Electrogas: Price Leader or Price Follower are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Regal Electrogas: Price Leader or Price Follower | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Regal Electrogas: Price Leader or Price Follower are -
Capital Spending Reduction
– Even during the low interest decade, Asad Electrogas 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 Asad Electrogas products
– To increase the profitability and margins on the products, Asad Electrogas needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Asad Electrogas 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.
Slow to strategic competitive environment developments
– As Regal Electrogas: Price Leader or Price Follower HBR case study mentions - Asad Electrogas 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.
Slow decision making process
– As mentioned earlier in the report, Asad Electrogas 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. Asad Electrogas 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.
High cash cycle compare to competitors
Asad Electrogas 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.
Products dominated business model
– Even though Asad Electrogas 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 - Regal Electrogas: Price Leader or Price Follower 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 Regal Electrogas: Price Leader or Price Follower 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 Asad Electrogas has relatively successful track record of launching new products.
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 Asad Electrogas supply chain. Even after few cautionary changes mentioned in the HBR case study - Regal Electrogas: Price Leader or Price Follower, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Asad Electrogas vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Regal Electrogas: Price Leader or Price Follower 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 Regal Electrogas: Price Leader or Price Follower can leverage the sales team experience to cultivate customer relationships as Asad Electrogas is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Asad Electrogas 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 Regal Electrogas: Price Leader or Price Follower | 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 Regal Electrogas: Price Leader or Price Follower are -
Loyalty marketing
– Asad Electrogas 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.
Using analytics as competitive advantage
– Asad Electrogas 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 Regal Electrogas: Price Leader or Price Follower - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Asad Electrogas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Asad Electrogas to increase its market reach. Asad Electrogas will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Asad Electrogas 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Asad Electrogas 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.
Buying journey improvements
– Asad Electrogas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Regal Electrogas: Price Leader or Price Follower 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Asad Electrogas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Asad Electrogas 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 Asad Electrogas to hire the very best people irrespective of their geographical location.
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 Asad Electrogas in the consumer business. Now Asad Electrogas can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Asad Electrogas 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, Regal Electrogas: Price Leader or Price Follower, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asad Electrogas is facing challenges because of the dominance of functional experts in the organization. Regal Electrogas: Price Leader or Price Follower 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. Asad Electrogas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Asad Electrogas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Regal Electrogas: Price Leader or Price Follower External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Regal Electrogas: Price Leader or Price Follower are -
High dependence on third party suppliers
– Asad Electrogas 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.
Consumer confidence and its impact on Asad Electrogas 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.
Regulatory challenges
– Asad Electrogas 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Asad Electrogas 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 Regal Electrogas: Price Leader or Price Follower .
Stagnating economy with rate increase
– Asad Electrogas 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
– Asad Electrogas has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Asad Electrogas 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Asad Electrogas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Asad Electrogas
– 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 Asad Electrogas.
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. Asad Electrogas 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.
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 Asad Electrogas in the Sales & Marketing sector and impact the bottomline of the organization.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Asad Electrogas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Asad Electrogas.
Weighted SWOT Analysis of Regal Electrogas: Price Leader or Price Follower 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 Regal Electrogas: Price Leader or Price Follower 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 Regal Electrogas: Price Leader or Price Follower 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 Regal Electrogas: Price Leader or Price Follower 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 Regal Electrogas: Price Leader or Price Follower 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 Asad Electrogas needs to make to build a sustainable competitive advantage.