Case Study Description of Product Proliferation and Preemption
Examines whether product proliferation can be used as a preemptive device--as alleged in the FTC's 1982 complaint against four manufacturers of ready-to-eat cereals.
Swot Analysis of "Product Proliferation and Preemption" written by Adam Brandenburger, Vijay Krishna includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Proliferation Ftc's facing as an external strategic factors. Some of the topics covered in Product Proliferation and Preemption case study are - Strategic Management Strategies, Competition, Competitive strategy, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Product Proliferation and Preemption casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Product Proliferation and Preemption
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Product Proliferation and Preemption case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Proliferation Ftc's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Proliferation Ftc'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 Product Proliferation and Preemption can be done for the following purposes –
1. Strategic planning using facts provided in Product Proliferation and Preemption case study
2. Improving business portfolio management of Proliferation Ftc's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Proliferation Ftc's
Strengths Product Proliferation and Preemption | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Proliferation Ftc's in Product Proliferation and Preemption Harvard Business Review case study are -
High switching costs
– The high switching costs that Proliferation Ftc's 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.
Effective Research and Development (R&D)
– Proliferation Ftc's 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 Product Proliferation and Preemption - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Proliferation Ftc'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 Adam Brandenburger, Vijay Krishna 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.
Low bargaining power of suppliers
– Suppliers of Proliferation Ftc's in the sector have low bargaining power. Product Proliferation and Preemption has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Proliferation Ftc's to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Product Proliferation and Preemption 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.
Superior customer experience
– The customer experience strategy of Proliferation Ftc's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Proliferation Ftc's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Proliferation Ftc's 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Proliferation Ftc's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Proliferation Ftc's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Proliferation Ftc's is one of the leading recruiters in the industry. Managers in the Product Proliferation and Preemption are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Proliferation Ftc's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Proliferation Ftc's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Product Proliferation and Preemption firm has clearly differentiated products in the market place. This has enabled Proliferation Ftc's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Proliferation Ftc's to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Proliferation Ftc'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 Proliferation Ftc's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Product Proliferation and Preemption | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Product Proliferation and Preemption are -
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 Proliferation Ftc's supply chain. Even after few cautionary changes mentioned in the HBR case study - Product Proliferation and Preemption, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Proliferation Ftc's vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Proliferation Ftc's 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.
Skills based hiring
– The stress on hiring functional specialists at Proliferation Ftc's 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 Product Proliferation and Preemption HBR case study mentions - Proliferation Ftc'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.
Workers concerns about automation
– As automation is fast increasing in the segment, Proliferation Ftc's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Proliferation Ftc's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Product Proliferation and Preemption can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Product Proliferation and Preemption 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 Proliferation Ftc's 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Proliferation Ftc's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Proliferation Ftc's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Proliferation Ftc's to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Proliferation Ftc's, firm in the HBR case study Product Proliferation and Preemption needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Adam Brandenburger, Vijay Krishna suggests that, Proliferation Ftc's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Proliferation Ftc'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.
Opportunities Product Proliferation and Preemption | 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 Product Proliferation and Preemption are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Proliferation Ftc's can use these opportunities to build new business models that can help the communities that Proliferation Ftc's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Proliferation Ftc'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 Proliferation Ftc's to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Proliferation Ftc'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 Product Proliferation and Preemption - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Proliferation Ftc's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Proliferation Ftc'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.
Loyalty marketing
– Proliferation Ftc's 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 Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Proliferation Ftc's 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. Proliferation Ftc's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Proliferation Ftc's is facing challenges because of the dominance of functional experts in the organization. Product Proliferation and Preemption 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.
Buying journey improvements
– Proliferation Ftc's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Product Proliferation and Preemption 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.
Manufacturing automation
– Proliferation Ftc's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Better consumer reach
– The expansion of the 5G network will help Proliferation Ftc's to increase its market reach. Proliferation Ftc'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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Proliferation Ftc's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Proliferation Ftc'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, Product Proliferation and Preemption, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Proliferation Ftc's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Product Proliferation and Preemption External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Product Proliferation and Preemption are -
Increasing wage structure of Proliferation Ftc'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 Proliferation Ftc's.
Shortening product life cycle
– it is one of the major threat that Proliferation Ftc's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Proliferation Ftc'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 Product Proliferation and Preemption .
Stagnating economy with rate increase
– Proliferation Ftc'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.
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. Proliferation Ftc's 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.
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. Proliferation Ftc's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Proliferation Ftc's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Product Proliferation and Preemption, Proliferation Ftc's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Proliferation Ftc'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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Proliferation Ftc's in the Strategy & Execution industry. The Strategy & Execution 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.
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 Proliferation Ftc's.
Technology acceleration in Forth Industrial Revolution
– Proliferation Ftc's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Proliferation Ftc's needs to keep up with the evolution of technology in the Strategy & Execution 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.
Weighted SWOT Analysis of Product Proliferation and Preemption 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 Product Proliferation and Preemption 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 Product Proliferation and Preemption 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 Product Proliferation and Preemption 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 Product Proliferation and Preemption 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 Proliferation Ftc's needs to make to build a sustainable competitive advantage.