Case Study Description of Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed)
Highlights Kimberly-Clark's perspective on the fierce competitive battle with Procter & Gamble (P&G) in the diaper industry. The competitive struggle involves a broad range of issues including: rapid product development, international threats and opportunities, diversification options, and public pressure over environmental concerns. In particular, Kimberly-Clark must decide on a response to P&G's most recent product introduction.
Authors :: Allen Morrison, J. Michael Geringer, Kerry McLellan
Swot Analysis of "Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed)" written by Allen Morrison, J. Michael Geringer, Kerry McLellan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kimberly Diaper facing as an external strategic factors. Some of the topics covered in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) case study are - Strategic Management Strategies, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, talent flight as more people leaving formal jobs, increasing commodity prices, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
there is backlash against globalization, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kimberly Diaper, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kimberly Diaper 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) can be done for the following purposes –
1. Strategic planning using facts provided in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) case study
2. Improving business portfolio management of Kimberly Diaper
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 Kimberly Diaper
Strengths Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kimberly Diaper in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) Harvard Business Review case study are -
Analytics focus
– Kimberly Diaper 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 Allen Morrison, J. Michael Geringer, Kerry McLellan 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.
Diverse revenue streams
– Kimberly Diaper is present in almost all the verticals within the industry. This has provided firm in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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.
Ability to lead change in Strategy & Execution field
– Kimberly Diaper 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 Kimberly Diaper in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Kimberly Diaper has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kimberly Diaper to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Kimberly Diaper in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Kimberly Diaper in the sector have low bargaining power. Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kimberly Diaper to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Kimberly Diaper
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kimberly Diaper does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Kimberly Diaper is one of the leading recruiters in the industry. Managers in the Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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.
Strong track record of project management
– Kimberly Diaper is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Kimberly Diaper 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 Kimberly Diaper is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Kimberly Diaper has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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.
Weaknesses Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) are -
Capital Spending Reduction
– Even during the low interest decade, Kimberly Diaper 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Kimberly Diaper has relatively successful track record of launching new products.
Need for greater diversity
– Kimberly Diaper 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.
Aligning sales with marketing
– It come across in the case study Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) can leverage the sales team experience to cultivate customer relationships as Kimberly Diaper is planning to shift buying processes online.
Lack of clear differentiation of Kimberly Diaper products
– To increase the profitability and margins on the products, Kimberly Diaper needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Kimberly Diaper 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.
Increasing silos among functional specialists
– The organizational structure of Kimberly Diaper is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Kimberly Diaper needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kimberly Diaper to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Allen Morrison, J. Michael Geringer, Kerry McLellan suggests that, Kimberly Diaper 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed), it seems that the employees of Kimberly Diaper 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 Kimberly Diaper, firm in the HBR case study Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Kimberly Diaper 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) | 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kimberly Diaper can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Kimberly Diaper 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 Strategy & Execution segment.
Buying journey improvements
– Kimberly Diaper can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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.
Leveraging digital technologies
– Kimberly Diaper 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kimberly Diaper 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kimberly Diaper 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kimberly Diaper is facing challenges because of the dominance of functional experts in the organization. Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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.
Learning at scale
– Online learning technologies has now opened space for Kimberly Diaper 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.
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 Kimberly Diaper 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kimberly Diaper 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, Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kimberly Diaper can use these opportunities to build new business models that can help the communities that Kimberly Diaper operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Kimberly Diaper 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. Kimberly Diaper 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.
Using analytics as competitive advantage
– Kimberly Diaper 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kimberly Diaper to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kimberly Diaper 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) .
Consumer confidence and its impact on Kimberly Diaper 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.
Increasing wage structure of Kimberly Diaper
– 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 Kimberly Diaper.
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. Kimberly Diaper will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Kimberly Diaper in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Kimberly Diaper 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.
Technology acceleration in Forth Industrial Revolution
– Kimberly Diaper has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Kimberly Diaper 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.
Environmental challenges
– Kimberly Diaper 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. Kimberly Diaper can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Kimberly Diaper needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Kimberly Diaper 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 Strategy & Execution industry regulations.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kimberly Diaper can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Kimberly Diaper business can come under increasing regulations regarding data privacy, data security, 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed), Kimberly Diaper 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 .
Weighted SWOT Analysis of Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Diaper War: Kimberly-Clark vs. Procter & Gamble (Condensed) 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 Kimberly Diaper needs to make to build a sustainable competitive advantage.