The Changed Legality of Resale Price Maintenance and Pricing Implications SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Changed Legality of Resale Price Maintenance and Pricing Implications
From 1911 until 2007, minimum resale price maintenance agreements between manufacturers and resellers were illegal under federal antitrust law. This handicapped manufacturers which sought to exert control over how their products were priced and promoted through the distribution channel. In June 2007, the United States Supreme Court-via the Leegin case-ruled that bilateral minimum resale price maintenance agreements would no longer be automatically illegal. Rather, they would be legal if their net impact is pro-competitive, and illegal only if the net impact is anti-competitive. This ruling empowers manufacturers to use resale price maintenance to create value for their customers and consumers. However, not all stakeholders-including some state legal systems-have embraced the Leegin ruling, thereby creating uncertainty regarding its final impact. Despite this uncertainty, the opportunities created by Leegin are worth exploring and acting upon. Since the Leegin ruling 3 years ago, a new landscape for resale pricing maintenance has been evolving. We discuss this landscape and the considerations for using resale price maintenance within its ambit. For many manufacturers, the chance of benefitting from Leegin outweighs any potential risks.
Swot Analysis of "The Changed Legality of Resale Price Maintenance and Pricing Implications" written by Surinder Tikoo, Bruce Mather includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Leegin Resale facing as an external strategic factors. Some of the topics covered in The Changed Legality of Resale Price Maintenance and Pricing Implications case study are - Strategic Management Strategies, Marketing, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the The Changed Legality of Resale Price Maintenance and Pricing Implications casestudy better are - – geopolitical disruptions, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, increasing commodity prices, etc
Introduction to SWOT Analysis of The Changed Legality of Resale Price Maintenance and Pricing Implications
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Changed Legality of Resale Price Maintenance and Pricing Implications case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Leegin Resale, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Leegin Resale 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 The Changed Legality of Resale Price Maintenance and Pricing Implications can be done for the following purposes –
1. Strategic planning using facts provided in The Changed Legality of Resale Price Maintenance and Pricing Implications case study
2. Improving business portfolio management of Leegin Resale
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 Leegin Resale
Strengths The Changed Legality of Resale Price Maintenance and Pricing Implications | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Leegin Resale in The Changed Legality of Resale Price Maintenance and Pricing Implications Harvard Business Review case study are -
Successful track record of launching new products
– Leegin Resale has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Leegin Resale 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.
Diverse revenue streams
– Leegin Resale is present in almost all the verticals within the industry. This has provided firm in The Changed Legality of Resale Price Maintenance and Pricing Implications 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Leegin Resale digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Leegin Resale 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.
Training and development
– Leegin Resale has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Changed Legality of Resale Price Maintenance and Pricing Implications Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Leegin Resale 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.
Low bargaining power of suppliers
– Suppliers of Leegin Resale in the sector have low bargaining power. The Changed Legality of Resale Price Maintenance and Pricing Implications has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Leegin Resale to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Leegin Resale in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Leegin Resale 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 Leegin Resale in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Leegin Resale
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Leegin Resale does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the The Changed Legality of Resale Price Maintenance and Pricing Implications 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.
High switching costs
– The high switching costs that Leegin Resale 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.
Ability to recruit top talent
– Leegin Resale is one of the leading recruiters in the industry. Managers in the The Changed Legality of Resale Price Maintenance and Pricing Implications 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 The Changed Legality of Resale Price Maintenance and Pricing Implications | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Changed Legality of Resale Price Maintenance and Pricing Implications are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Changed Legality of Resale Price Maintenance and Pricing Implications, in the dynamic environment Leegin Resale has struggled to respond to the nimble upstart competition. Leegin Resale has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Leegin Resale 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. Leegin Resale 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Leegin Resale 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Changed Legality of Resale Price Maintenance and Pricing Implications 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 Leegin Resale 's lucrative customers.
Products dominated business model
– Even though Leegin Resale 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 - The Changed Legality of Resale Price Maintenance and Pricing Implications should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Changed Legality of Resale Price Maintenance and Pricing Implications, it seems that the employees of Leegin Resale 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.
Low market penetration in new markets
– Outside its home market of Leegin Resale, firm in the HBR case study The Changed Legality of Resale Price Maintenance and Pricing Implications needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Changed Legality of Resale Price Maintenance and Pricing Implications, is just above the industry average. Leegin Resale 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 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 Leegin Resale supply chain. Even after few cautionary changes mentioned in the HBR case study - The Changed Legality of Resale Price Maintenance and Pricing Implications, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Leegin Resale vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Leegin Resale 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Leegin Resale is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Changed Legality of Resale Price Maintenance and Pricing Implications can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities The Changed Legality of Resale Price Maintenance and Pricing Implications | 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 The Changed Legality of Resale Price Maintenance and Pricing Implications are -
Loyalty marketing
– Leegin Resale 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Leegin Resale 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 Leegin Resale to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Leegin Resale 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. Leegin Resale 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. Leegin Resale 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.
Creating value in data economy
– The success of analytics program of Leegin Resale has opened avenues for new revenue streams for the organization in the industry. This can help Leegin Resale to build a more holistic ecosystem as suggested in the The Changed Legality of Resale Price Maintenance and Pricing Implications case study. Leegin Resale can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Leegin Resale 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Leegin Resale is facing challenges because of the dominance of functional experts in the organization. The Changed Legality of Resale Price Maintenance and Pricing Implications 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Leegin Resale 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.
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 Leegin Resale in the consumer business. Now Leegin Resale can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Leegin Resale 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Leegin Resale 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, The Changed Legality of Resale Price Maintenance and Pricing Implications, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Leegin Resale can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Leegin Resale can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The Changed Legality of Resale Price Maintenance and Pricing Implications External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Changed Legality of Resale Price Maintenance and Pricing Implications are -
Regulatory challenges
– Leegin Resale 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.
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
– Leegin Resale 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.
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. Leegin Resale needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Leegin Resale is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Leegin Resale in the Sales & Marketing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Leegin Resale 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.
Technology acceleration in Forth Industrial Revolution
– Leegin Resale has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Leegin Resale 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.
Increasing wage structure of Leegin Resale
– 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 Leegin Resale.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Changed Legality of Resale Price Maintenance and Pricing Implications, Leegin Resale 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 .
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.
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 Leegin Resale.
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. Leegin Resale can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of The Changed Legality of Resale Price Maintenance and Pricing Implications 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 The Changed Legality of Resale Price Maintenance and Pricing Implications 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 The Changed Legality of Resale Price Maintenance and Pricing Implications 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 The Changed Legality of Resale Price Maintenance and Pricing Implications 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 The Changed Legality of Resale Price Maintenance and Pricing Implications 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 Leegin Resale needs to make to build a sustainable competitive advantage.