Reckitt Benckiser: Fast and Focused Innovation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reckitt Benckiser: Fast and Focused Innovation
Since its 1999 merger Reckitt Benckiser (RB), a global consumer goods company, led by its CEO Bart Becht, RB developed a reputation for rapid product innovation and industry leading profit margins. RB's stated strategy was to focus on its Powerbrands and high growth categories and to nurture the Powerbrands with innovation and roll them out globally. The Powerbrands had steady double digit growth year over year, attracted a devoted customer base and typically grabbed high margins. This case examines the Powerbrands strategy, RB's devotion to fast and focused innovation and its execution of that strategy.
Swot Analysis of "Reckitt Benckiser: Fast and Focused Innovation" written by Rebecca Henderson, Ryan Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Powerbrands Rb's facing as an external strategic factors. Some of the topics covered in Reckitt Benckiser: Fast and Focused Innovation case study are - Strategic Management Strategies, Creativity, Innovation, Market research, Mergers & acquisitions, Social responsibility, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Reckitt Benckiser: Fast and Focused Innovation casestudy better are - – talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is backlash against globalization, increasing transportation and logistics costs,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Reckitt Benckiser: Fast and Focused Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reckitt Benckiser: Fast and Focused Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Powerbrands Rb's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Powerbrands Rb'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 Reckitt Benckiser: Fast and Focused Innovation can be done for the following purposes –
1. Strategic planning using facts provided in Reckitt Benckiser: Fast and Focused Innovation case study
2. Improving business portfolio management of Powerbrands Rb'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 Powerbrands Rb's
Strengths Reckitt Benckiser: Fast and Focused Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Powerbrands Rb's in Reckitt Benckiser: Fast and Focused Innovation Harvard Business Review case study are -
High brand equity
– Powerbrands Rb's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Powerbrands Rb's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Powerbrands Rb's in the sector have low bargaining power. Reckitt Benckiser: Fast and Focused Innovation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Powerbrands Rb's to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Powerbrands Rb's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reckitt Benckiser: Fast and Focused Innovation 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.
Operational resilience
– The operational resilience strategy in the Reckitt Benckiser: Fast and Focused Innovation 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.
Analytics focus
– Powerbrands Rb'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 Rebecca Henderson, Ryan Johnson 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.
Learning organization
- Powerbrands Rb's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Powerbrands Rb's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reckitt Benckiser: Fast and Focused Innovation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Powerbrands Rb's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Powerbrands Rb's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Reckitt Benckiser: Fast and Focused Innovation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Powerbrands Rb'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 Reckitt Benckiser: Fast and Focused Innovation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Powerbrands Rb'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 Powerbrands Rb's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Powerbrands Rb's is one of the most innovative firm in sector. Manager in Reckitt Benckiser: Fast and Focused Innovation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Powerbrands Rb's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Powerbrands Rb'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.
Weaknesses Reckitt Benckiser: Fast and Focused Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reckitt Benckiser: Fast and Focused Innovation are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reckitt Benckiser: Fast and Focused Innovation, it seems that the employees of Powerbrands Rb's 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 Powerbrands Rb's, firm in the HBR case study Reckitt Benckiser: Fast and Focused Innovation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Powerbrands Rb's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Powerbrands Rb's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Reckitt Benckiser: Fast and Focused Innovation 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 Powerbrands Rb's 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Rebecca Henderson, Ryan Johnson suggests that, Powerbrands Rb'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.
Aligning sales with marketing
– It come across in the case study Reckitt Benckiser: Fast and Focused Innovation 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 Reckitt Benckiser: Fast and Focused Innovation can leverage the sales team experience to cultivate customer relationships as Powerbrands Rb's is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Reckitt Benckiser: Fast and Focused Innovation, in the dynamic environment Powerbrands Rb's has struggled to respond to the nimble upstart competition. Powerbrands Rb's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Reckitt Benckiser: Fast and Focused Innovation 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 Powerbrands Rb's has relatively successful track record of launching new products.
Lack of clear differentiation of Powerbrands Rb's products
– To increase the profitability and margins on the products, Powerbrands Rb's needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reckitt Benckiser: Fast and Focused Innovation, is just above the industry average. Powerbrands Rb's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Powerbrands Rb'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.
Opportunities Reckitt Benckiser: Fast and Focused Innovation | 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 Reckitt Benckiser: Fast and Focused Innovation are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Powerbrands Rb's is facing challenges because of the dominance of functional experts in the organization. Reckitt Benckiser: Fast and Focused Innovation 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Powerbrands Rb's can use these opportunities to build new business models that can help the communities that Powerbrands Rb's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Powerbrands Rb's in the consumer business. Now Powerbrands Rb's can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Powerbrands Rb's 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.
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. Powerbrands Rb's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Powerbrands Rb'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 Powerbrands Rb's to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Powerbrands Rb's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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. Powerbrands Rb's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Powerbrands Rb's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Powerbrands Rb's has opened avenues for new revenue streams for the organization in the industry. This can help Powerbrands Rb's to build a more holistic ecosystem as suggested in the Reckitt Benckiser: Fast and Focused Innovation case study. Powerbrands Rb's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Powerbrands Rb's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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. Powerbrands Rb'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. Powerbrands Rb'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.
Buying journey improvements
– Powerbrands Rb's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reckitt Benckiser: Fast and Focused Innovation 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.
Threats Reckitt Benckiser: Fast and Focused Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reckitt Benckiser: Fast and Focused Innovation 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.
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. Powerbrands Rb'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 dependence on third party suppliers
– Powerbrands Rb'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.
Increasing wage structure of Powerbrands Rb'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 Powerbrands Rb's.
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. Powerbrands Rb's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Powerbrands Rb's in the Strategy & Execution sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Powerbrands Rb's business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Powerbrands Rb's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Powerbrands Rb'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.
Consumer confidence and its impact on Powerbrands Rb's 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.
Environmental challenges
– Powerbrands Rb's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Powerbrands Rb's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Powerbrands Rb'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 Reckitt Benckiser: Fast and Focused Innovation .
Technology acceleration in Forth Industrial Revolution
– Powerbrands Rb's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Powerbrands Rb'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 Reckitt Benckiser: Fast and Focused Innovation 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 Reckitt Benckiser: Fast and Focused Innovation 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 Reckitt Benckiser: Fast and Focused Innovation 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 Reckitt Benckiser: Fast and Focused Innovation 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 Reckitt Benckiser: Fast and Focused Innovation 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 Powerbrands Rb's needs to make to build a sustainable competitive advantage.