Case Study Description of Marketing Marijuana in Colorado
Colorado's 2014 legalization of marijuana for adult recreational (not just medical) use created a new market that entrepreneurs rushed to enter, channeled by regulations that aimed to minimize marijuana's access to minors while not stifling the emergent new industry. The case describes Colorado's initial experience with marijuana legalization and asks students to assess the resulting business opportunities, regulatory efficacy, and public health implications.
Swot Analysis of "Marketing Marijuana in Colorado" written by John A. Quelch, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Marijuana Colorado's facing as an external strategic factors. Some of the topics covered in Marketing Marijuana in Colorado case study are - Strategic Management Strategies, Entrepreneurship, Financial markets, Health and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Marketing Marijuana in Colorado casestudy better are - – increasing commodity prices, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, technology disruption,
wage bills are increasing, there is backlash against globalization, etc
Introduction to SWOT Analysis of Marketing Marijuana in Colorado
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Marketing Marijuana in Colorado case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Marijuana Colorado's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Marijuana Colorado's 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 Marketing Marijuana in Colorado can be done for the following purposes –
1. Strategic planning using facts provided in Marketing Marijuana in Colorado case study
2. Improving business portfolio management of Marijuana Colorado's
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 Marijuana Colorado's
Strengths Marketing Marijuana in Colorado | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Marijuana Colorado's in Marketing Marijuana in Colorado Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Marketing Marijuana in Colorado firm has clearly differentiated products in the market place. This has enabled Marijuana Colorado's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Marijuana Colorado's to invest into research and development (R&D) and innovation.
Learning organization
- Marijuana Colorado's 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 Marijuana Colorado's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Marketing Marijuana in Colorado Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Sales & Marketing field
– Marijuana Colorado's 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 Marijuana Colorado's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Marijuana Colorado's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Marketing Marijuana in Colorado 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
– Marijuana Colorado's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Marijuana Colorado's 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 Marketing Marijuana in Colorado HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Marijuana Colorado's in the sector have low bargaining power. Marketing Marijuana in Colorado has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Marijuana Colorado's to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Marijuana Colorado's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Marijuana Colorado's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Marijuana Colorado's 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.
Diverse revenue streams
– Marijuana Colorado's is present in almost all the verticals within the industry. This has provided firm in Marketing Marijuana in Colorado 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.
Analytics focus
– Marijuana Colorado's 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 John A. Quelch, David Lane 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.
Superior customer experience
– The customer experience strategy of Marijuana Colorado's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Marketing Marijuana in Colorado | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Marketing Marijuana in Colorado are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Marketing Marijuana in Colorado, is just above the industry average. Marijuana Colorado's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Marketing Marijuana in Colorado, in the dynamic environment Marijuana Colorado's has struggled to respond to the nimble upstart competition. Marijuana Colorado's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Marketing Marijuana in Colorado 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 Marijuana Colorado's has relatively successful track record of launching new products.
Need for greater diversity
– Marijuana Colorado's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Marijuana Colorado's, firm in the HBR case study Marketing Marijuana in Colorado needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Marketing Marijuana in Colorado HBR case study mentions - Marijuana Colorado's 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.
Lack of clear differentiation of Marijuana Colorado's products
– To increase the profitability and margins on the products, Marijuana Colorado's needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Marijuana Colorado's 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 decision making process
– As mentioned earlier in the report, Marijuana Colorado's 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. Marijuana Colorado's 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
Marijuana Colorado's 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.
Aligning sales with marketing
– It come across in the case study Marketing Marijuana in Colorado 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 Marketing Marijuana in Colorado can leverage the sales team experience to cultivate customer relationships as Marijuana Colorado's is planning to shift buying processes online.
Opportunities Marketing Marijuana in Colorado | 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 Marketing Marijuana in Colorado are -
Better consumer reach
– The expansion of the 5G network will help Marijuana Colorado's to increase its market reach. Marijuana Colorado's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Marijuana Colorado's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Marijuana Colorado's 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.
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. Marijuana Colorado's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Marijuana Colorado's 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.
Developing new processes and practices
– Marijuana Colorado's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Marijuana Colorado's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Marijuana Colorado's can use these opportunities to build new business models that can help the communities that Marijuana Colorado's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Marijuana Colorado's 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 Marijuana Colorado's to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Marijuana Colorado's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Marijuana Colorado's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Marijuana Colorado's 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 Marketing Marijuana in Colorado - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Marijuana Colorado's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Marijuana Colorado's 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, Marketing Marijuana in Colorado, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Marketing Marijuana in Colorado External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Marketing Marijuana in Colorado are -
Stagnating economy with rate increase
– Marijuana Colorado's 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 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.
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 Marijuana Colorado's business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Marijuana Colorado's 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 wage structure of Marijuana Colorado's
– 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 Marijuana Colorado's.
Technology acceleration in Forth Industrial Revolution
– Marijuana Colorado's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Marijuana Colorado's 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.
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 Marijuana Colorado's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Marijuana Colorado's 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 Marketing Marijuana in Colorado .
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 Marijuana Colorado's in the Sales & Marketing sector and impact the bottomline of the organization.
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. Marijuana Colorado's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Marijuana Colorado's 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.
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.
Environmental challenges
– Marijuana Colorado's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Marijuana Colorado's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Marketing Marijuana in Colorado 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 Marketing Marijuana in Colorado 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 Marketing Marijuana in Colorado 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 Marketing Marijuana in Colorado 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 Marketing Marijuana in Colorado 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 Marijuana Colorado's needs to make to build a sustainable competitive advantage.