Case Study Description of Culinarian Cookware: Pondering Price Promotion
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.In November of 2006, senior executives at Culinarian Cookware were debating the merits of price promotions for the company's premium cookware products. The VP of Marketing, Donald Janus, and Senior Sales Manager, Victoria Brown, had different views. Janus felt price promotions were unnecessary, potentially damaging to the brand image, and possibly encouraged retailer hoarding; Brown believed the promotions strengthened trade support, improved brand awareness, and stimulated sales from both new and existing customers. The issue was complicated by a consultant's study of the firm's 2004 price promotions which concluded that these promotions had a negative impact on profits. Janus trusted the results, but Brown, believing the study assumptions were flawed and required further analysis, suspected the promotions had actually produced positive results. The pressing decision is whether to run a price promotion in 2007 and, if so, to determine what merchandise to promote and on what terms. The broader issue is what strategy Culinarian should pursue to achieve sales growth goals, and what role, if any, price promotion should play. Subjects Covered: Price Promotion, Pricing Policy, Consumer Marketing, Profitability Analysis, Retailing, Sales Promotion, Distribution Policy, Brand Equity, Trade Relations, Cookware
Swot Analysis of "Culinarian Cookware: Pondering Price Promotion" written by John A. Quelch, Heather Beckham includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Promotions Cookware facing as an external strategic factors. Some of the topics covered in Culinarian Cookware: Pondering Price Promotion case study are - Strategic Management Strategies, Customers, Decision making, Financial analysis, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Culinarian Cookware: Pondering Price Promotion casestudy better are - – wage bills are increasing, increasing energy prices, talent flight as more people leaving formal jobs, increasing commodity prices, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Culinarian Cookware: Pondering Price Promotion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Culinarian Cookware: Pondering Price Promotion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Promotions Cookware, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Promotions Cookware 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 Culinarian Cookware: Pondering Price Promotion can be done for the following purposes –
1. Strategic planning using facts provided in Culinarian Cookware: Pondering Price Promotion case study
2. Improving business portfolio management of Promotions Cookware
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Promotions Cookware
Strengths Culinarian Cookware: Pondering Price Promotion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Promotions Cookware in Culinarian Cookware: Pondering Price Promotion Harvard Business Review case study are -
Ability to recruit top talent
– Promotions Cookware is one of the leading recruiters in the industry. Managers in the Culinarian Cookware: Pondering Price Promotion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Culinarian Cookware: Pondering Price Promotion 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.
Highly skilled collaborators
– Promotions Cookware 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 Culinarian Cookware: Pondering Price Promotion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Promotions Cookware has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Promotions Cookware 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.
Training and development
– Promotions Cookware has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Culinarian Cookware: Pondering Price Promotion 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.
Effective Research and Development (R&D)
– Promotions Cookware 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 Culinarian Cookware: Pondering Price Promotion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Culinarian Cookware: Pondering Price Promotion firm has clearly differentiated products in the market place. This has enabled Promotions Cookware to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Promotions Cookware to invest into research and development (R&D) and innovation.
Learning organization
- Promotions Cookware is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Promotions Cookware is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Culinarian Cookware: Pondering Price Promotion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Promotions Cookware 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.
High switching costs
– The high switching costs that Promotions Cookware 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.
Strong track record of project management
– Promotions Cookware is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Promotions Cookware digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Promotions Cookware 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.
Weaknesses Culinarian Cookware: Pondering Price Promotion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Culinarian Cookware: Pondering Price Promotion are -
High cash cycle compare to competitors
Promotions Cookware 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.
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 Promotions Cookware supply chain. Even after few cautionary changes mentioned in the HBR case study - Culinarian Cookware: Pondering Price Promotion, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Promotions Cookware vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Promotions Cookware 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. Promotions Cookware 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Promotions Cookware is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Culinarian Cookware: Pondering Price Promotion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Promotions Cookware 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.
Interest costs
– Compare to the competition, Promotions Cookware 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.
Low market penetration in new markets
– Outside its home market of Promotions Cookware, firm in the HBR case study Culinarian Cookware: Pondering Price Promotion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Culinarian Cookware: Pondering Price Promotion, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Culinarian Cookware: Pondering Price Promotion, it seems that the employees of Promotions Cookware 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Culinarian Cookware: Pondering Price Promotion, is just above the industry average. Promotions Cookware 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.
Slow to strategic competitive environment developments
– As Culinarian Cookware: Pondering Price Promotion HBR case study mentions - Promotions Cookware 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.
Opportunities Culinarian Cookware: Pondering Price Promotion | 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 Culinarian Cookware: Pondering Price Promotion are -
Buying journey improvements
– Promotions Cookware can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Culinarian Cookware: Pondering Price Promotion 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Promotions Cookware can use these opportunities to build new business models that can help the communities that Promotions Cookware operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Promotions Cookware can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Promotions Cookware 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.
Building a culture of innovation
– managers at Promotions Cookware 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.
Loyalty marketing
– Promotions Cookware has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Promotions Cookware can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Promotions Cookware 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.
Leveraging digital technologies
– Promotions Cookware 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Promotions Cookware in the consumer business. Now Promotions Cookware 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, Promotions Cookware is facing challenges because of the dominance of functional experts in the organization. Culinarian Cookware: Pondering Price Promotion 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.
Using analytics as competitive advantage
– Promotions Cookware 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 Culinarian Cookware: Pondering Price Promotion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Promotions Cookware 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. Promotions Cookware can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Promotions Cookware has opened avenues for new revenue streams for the organization in the industry. This can help Promotions Cookware to build a more holistic ecosystem as suggested in the Culinarian Cookware: Pondering Price Promotion case study. Promotions Cookware can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Culinarian Cookware: Pondering Price Promotion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Culinarian Cookware: Pondering Price Promotion are -
Consumer confidence and its impact on Promotions Cookware 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 acceleration in Forth Industrial Revolution
– Promotions Cookware has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Promotions Cookware 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.
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. Promotions Cookware needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
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 Promotions Cookware 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.
High dependence on third party suppliers
– Promotions Cookware 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.
Stagnating economy with rate increase
– Promotions Cookware 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.
Regulatory challenges
– Promotions Cookware 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.
Shortening product life cycle
– it is one of the major threat that Promotions Cookware is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Culinarian Cookware: Pondering Price Promotion, Promotions Cookware 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Promotions Cookware 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 Culinarian Cookware: Pondering Price Promotion .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Promotions Cookware 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.
Weighted SWOT Analysis of Culinarian Cookware: Pondering Price Promotion 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 Culinarian Cookware: Pondering Price Promotion 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 Culinarian Cookware: Pondering Price Promotion 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 Culinarian Cookware: Pondering Price Promotion 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 Culinarian Cookware: Pondering Price Promotion is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Promotions Cookware needs to make to build a sustainable competitive advantage.
