Electronic Cigarettes in the EU: The Political Economy of Product Regulation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Electronic Cigarettes in the EU: The Political Economy of Product Regulation
You are the CEO of an e-cigarette company that has just been acquired by a major tobacco company. Your company operates in the European market. The July 2013 draft of the EU Tobacco Products Directive (TPD) recently has been crafted by the European Commission, but it has not yet been examined by the EU Parliament and its Council. The draft proposes that all e-cigarette products be classified as medical devices, regardless of nicotine content. This is the strictest available mode of regulation. If the directive goes into effect as written, e-cigarettes would have to undergo costly and lengthy clinical trials to receive approval and face much stricter marketability restrictions. The case details the state of the e-cigarette industry in 2013, including consumer data, distribution, competition from similar products, and public health concerns. Students will analyze the current regulatory environment, determine what outcome would be most favorable to the e-cigarette industry, and identify the ways to achieve that goal.
Swot Analysis of "Electronic Cigarettes in the EU: The Political Economy of Product Regulation" written by Nicola Persico, Chen Cheng, Nicola Scocchi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cigarette Eu facing as an external strategic factors. Some of the topics covered in Electronic Cigarettes in the EU: The Political Economy of Product Regulation case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Electronic Cigarettes in the EU: The Political Economy of Product Regulation casestudy better are - – technology disruption, increasing government debt because of Covid-19 spendings, increasing energy prices, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Electronic Cigarettes in the EU: The Political Economy of Product Regulation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Electronic Cigarettes in the EU: The Political Economy of Product Regulation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cigarette Eu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cigarette Eu 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation can be done for the following purposes –
1. Strategic planning using facts provided in Electronic Cigarettes in the EU: The Political Economy of Product Regulation case study
2. Improving business portfolio management of Cigarette Eu
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 Cigarette Eu
Strengths Electronic Cigarettes in the EU: The Political Economy of Product Regulation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cigarette Eu in Electronic Cigarettes in the EU: The Political Economy of Product Regulation Harvard Business Review case study are -
Innovation driven organization
– Cigarette Eu is one of the most innovative firm in sector. Manager in Electronic Cigarettes in the EU: The Political Economy of Product Regulation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Electronic Cigarettes in the EU: The Political Economy of Product Regulation Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Cigarette Eu has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Strategy & Execution field
– Cigarette Eu 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 Cigarette Eu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Cigarette Eu 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 Nicola Persico, Chen Cheng, Nicola Scocchi 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)
– Cigarette Eu 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Cigarette Eu has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cigarette Eu to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Cigarette Eu is present in almost all the verticals within the industry. This has provided firm in Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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
– Electronic Cigarettes in the EU: The Political Economy of Product Regulation firm has clearly differentiated products in the market place. This has enabled Cigarette Eu to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cigarette Eu to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Cigarette Eu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cigarette Eu 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.
Ability to recruit top talent
– Cigarette Eu is one of the leading recruiters in the industry. Managers in the Electronic Cigarettes in the EU: The Political Economy of Product Regulation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Cigarette Eu has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Electronic Cigarettes in the EU: The Political Economy of Product Regulation are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Electronic Cigarettes in the EU: The Political Economy of Product Regulation, is just above the industry average. Cigarette Eu 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.
Slow to strategic competitive environment developments
– As Electronic Cigarettes in the EU: The Political Economy of Product Regulation HBR case study mentions - Cigarette Eu 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.
Increasing silos among functional specialists
– The organizational structure of Cigarette Eu is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Cigarette Eu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cigarette Eu to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Cigarette Eu 's lucrative customers.
Need for greater diversity
– Cigarette Eu 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.
Capital Spending Reduction
– Even during the low interest decade, Cigarette Eu 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 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 Cigarette Eu supply chain. Even after few cautionary changes mentioned in the HBR case study - Electronic Cigarettes in the EU: The Political Economy of Product Regulation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cigarette Eu vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Cigarette Eu 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. Cigarette Eu 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.
Aligning sales with marketing
– It come across in the case study Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation can leverage the sales team experience to cultivate customer relationships as Cigarette Eu is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Cigarette Eu 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation, in the dynamic environment Cigarette Eu has struggled to respond to the nimble upstart competition. Cigarette Eu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Electronic Cigarettes in the EU: The Political Economy of Product Regulation | 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation are -
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. Cigarette Eu 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. Cigarette Eu 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.
Developing new processes and practices
– Cigarette Eu 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.
Learning at scale
– Online learning technologies has now opened space for Cigarette Eu 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cigarette Eu is facing challenges because of the dominance of functional experts in the organization. Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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.
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. Cigarette Eu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Cigarette Eu 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cigarette Eu 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 Cigarette Eu to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Cigarette Eu can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cigarette Eu can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cigarette Eu in the consumer business. Now Cigarette Eu can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cigarette Eu 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cigarette Eu can use these opportunities to build new business models that can help the communities that Cigarette Eu operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Cigarette Eu has opened avenues for new revenue streams for the organization in the industry. This can help Cigarette Eu to build a more holistic ecosystem as suggested in the Electronic Cigarettes in the EU: The Political Economy of Product Regulation case study. Cigarette Eu can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Electronic Cigarettes in the EU: The Political Economy of Product Regulation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Electronic Cigarettes in the EU: The Political Economy of Product Regulation are -
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. Cigarette Eu needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Cigarette Eu 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.
Stagnating economy with rate increase
– Cigarette Eu 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.
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 Cigarette Eu.
Shortening product life cycle
– it is one of the major threat that Cigarette Eu is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Cigarette Eu
– 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 Cigarette Eu.
Regulatory challenges
– Cigarette Eu 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cigarette Eu with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Cigarette Eu business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cigarette Eu 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation .
High dependence on third party suppliers
– Cigarette Eu 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Electronic Cigarettes in the EU: The Political Economy of Product Regulation, Cigarette Eu 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Electronic Cigarettes in the EU: The Political Economy of Product Regulation 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 Cigarette Eu needs to make to build a sustainable competitive advantage.
