Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette
January 27, 2005, was an extraordinary day for Gillette's James Kilts, the show-stopping turnaround expert known as the "Razor Boss of Boston." Kilts, along with Procter & Gamble chairman Alan Lafley, had just orchestrated a $57 billion acquisition of Gillette by P&G. The creation of the world's largest consumer products company would end Kilts's four-year tenure as CEO of Gillette and bring to a close Gillette's 104-year history as an independent corporate titan in the Boston area. The deal also capped a series of courtships between Gillette and other companies that had waxed and waned at various points throughout Kilts's stewardship of Gillette. But almost immediately after the transaction was announced, P&G and Gillette drew criticism from the media and the state of Massachusetts concerning the terms of the sale. Would this merger actually benefit shareholders, or was it principally a wealth creation vehicle for Kilts?
Swot Analysis of "Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette" written by David P. Stowell, Christopher D Grogan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gillette Kilts facing as an external strategic factors. Some of the topics covered in Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette case study are - Strategic Management Strategies, Financial analysis, Financial management, Intellectual property, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gillette Kilts, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gillette Kilts 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette can be done for the following purposes –
1. Strategic planning using facts provided in Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette case study
2. Improving business portfolio management of Gillette Kilts
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 Gillette Kilts
Strengths Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gillette Kilts in Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette Harvard Business Review case study are -
Highly skilled collaborators
– Gillette Kilts 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Gillette Kilts has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gillette Kilts to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Gillette Kilts has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gillette Kilts 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
– Gillette Kilts is present in almost all the verticals within the industry. This has provided firm in Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette firm has clearly differentiated products in the market place. This has enabled Gillette Kilts to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Gillette Kilts to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Gillette Kilts digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gillette Kilts 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.
Analytics focus
– Gillette Kilts 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 David P. Stowell, Christopher D Grogan 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.
Effective Research and Development (R&D)
– Gillette Kilts 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Gillette Kilts in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Gillette Kilts has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Gillette Kilts is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Gillette Kilts in the sector have low bargaining power. Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gillette Kilts to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette are -
Aligning sales with marketing
– It come across in the case study Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette can leverage the sales team experience to cultivate customer relationships as Gillette Kilts is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Gillette Kilts 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 operating costs
– Compare to the competitors, firm in the HBR case study Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Gillette Kilts 's lucrative customers.
Lack of clear differentiation of Gillette Kilts products
– To increase the profitability and margins on the products, Gillette Kilts needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Gillette Kilts 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.
High cash cycle compare to competitors
Gillette Kilts 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.
Slow to strategic competitive environment developments
– As Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette HBR case study mentions - Gillette Kilts 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.
Need for greater diversity
– Gillette Kilts 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Gillette Kilts has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette, in the dynamic environment Gillette Kilts has struggled to respond to the nimble upstart competition. Gillette Kilts has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette, is just above the industry average. Gillette Kilts 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.
Opportunities Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette | 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette are -
Buying journey improvements
– Gillette Kilts can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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.
Building a culture of innovation
– managers at Gillette Kilts 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Gillette Kilts can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Gillette Kilts 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gillette Kilts can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Gillette Kilts 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.
Better consumer reach
– The expansion of the 5G network will help Gillette Kilts to increase its market reach. Gillette Kilts 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.
Learning at scale
– Online learning technologies has now opened space for Gillette Kilts 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gillette Kilts 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, Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gillette Kilts 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 Gillette Kilts to hire the very best people irrespective of their geographical location.
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. Gillette Kilts can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Gillette Kilts can develop new processes and procedures in Strategy & Execution 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gillette Kilts 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.
Threats Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette are -
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 Gillette Kilts.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gillette Kilts 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.
Increasing wage structure of Gillette Kilts
– 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 Gillette Kilts.
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. Gillette Kilts can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gillette Kilts 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette .
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 Gillette Kilts business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Gillette Kilts 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.
Stagnating economy with rate increase
– Gillette Kilts 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.
High dependence on third party suppliers
– Gillette Kilts 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
– Gillette Kilts has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Gillette Kilts 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.
Consumer confidence and its impact on Gillette Kilts 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.
Shortening product life cycle
– it is one of the major threat that Gillette Kilts is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Best Deal Gillette Could Get? Procter & Gamble's Acquisition of Gillette 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 Gillette Kilts needs to make to build a sustainable competitive advantage.
