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 - – central banks are concerned over increasing inflation, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Powerbrands Rb's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Powerbrands Rb's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Powerbrands Rb's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Powerbrands Rb's is one of the leading recruiters in the industry. Managers in the Reckitt Benckiser: Fast and Focused Innovation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Powerbrands Rb's 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 Powerbrands Rb's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– 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.
Organizational Resilience of Powerbrands Rb's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Powerbrands Rb's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Reckitt Benckiser: Fast and Focused Innovation firm has clearly differentiated products in the market place. This has enabled Powerbrands Rb's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Powerbrands Rb's to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Powerbrands Rb's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 Powerbrands Rb's supply chain. Even after few cautionary changes mentioned in the HBR case study - Reckitt Benckiser: Fast and Focused Innovation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Powerbrands Rb's vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Powerbrands Rb's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Reckitt Benckiser: Fast and Focused Innovation should strive to include more intangible value offerings along with its core products and services.
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.
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 -
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Powerbrands Rb's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Powerbrands Rb's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Powerbrands Rb's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Powerbrands Rb's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
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.
Using analytics as competitive advantage
– Powerbrands Rb's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Reckitt Benckiser: Fast and Focused Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Powerbrands Rb's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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 -
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.
Regulatory challenges
– Powerbrands Rb's 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 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.
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.
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.
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.
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.
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.
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 Powerbrands Rb's.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.
