Gillette's Energy Drain (A): The Acquisition of Duracell SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gillette's Energy Drain (A): The Acquisition of Duracell
In 1996, Gillette acquired Duracell for $7.3 billion in stock. The purchase was met with optimism not only by Gillette's senior management and its highly visible director, Warren Buffet, but also Wall Street analysts. Highlights the numerous challenges that Gillette has encountered since the acquisition. Despite the initial enthusiasm, Duracell has proven to be a drain on Gillette's earnings and has cost Michael Hawley, James Kilt's predecessor as CEO, his job after only 18 months in the position--in large part for his inability to turn around the financial hemorrhaging at the Duracell division. The key strategy questions revolve around what can be done to turn around the battery business to help it achieve the potential for Gillette that everyone had assumed it possessed.
Swot Analysis of "Gillette's Energy Drain (A): The Acquisition of Duracell" written by Frank C. Schultz, Michael T. McCune includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Duracell Gillette's facing as an external strategic factors. Some of the topics covered in Gillette's Energy Drain (A): The Acquisition of Duracell case study are - Strategic Management Strategies, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Gillette's Energy Drain (A): The Acquisition of Duracell casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is backlash against globalization, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Gillette's Energy Drain (A): The Acquisition of Duracell
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gillette's Energy Drain (A): The Acquisition of Duracell case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Duracell Gillette's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Duracell Gillette'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 Gillette's Energy Drain (A): The Acquisition of Duracell can be done for the following purposes –
1. Strategic planning using facts provided in Gillette's Energy Drain (A): The Acquisition of Duracell case study
2. Improving business portfolio management of Duracell Gillette'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 Duracell Gillette's
Strengths Gillette's Energy Drain (A): The Acquisition of Duracell | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Duracell Gillette's in Gillette's Energy Drain (A): The Acquisition of Duracell Harvard Business Review case study are -
Organizational Resilience of Duracell Gillette's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Duracell Gillette's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Duracell Gillette's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Duracell Gillette's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Duracell Gillette's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Duracell Gillette's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Gillette's Energy Drain (A): The Acquisition of Duracell 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.
Effective Research and Development (R&D)
– Duracell Gillette'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 Gillette's Energy Drain (A): The Acquisition of Duracell - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Duracell Gillette's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Duracell Gillette'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.
Sustainable margins compare to other players in Strategy & Execution industry
– Gillette's Energy Drain (A): The Acquisition of Duracell firm has clearly differentiated products in the market place. This has enabled Duracell Gillette's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Duracell Gillette's to invest into research and development (R&D) and innovation.
Strong track record of project management
– Duracell Gillette'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.
Ability to lead change in Strategy & Execution field
– Duracell Gillette'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 Duracell Gillette's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Duracell Gillette'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 Gillette's Energy Drain (A): The Acquisition of Duracell HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Duracell Gillette'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 Duracell Gillette's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gillette's Energy Drain (A): The Acquisition of Duracell Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Gillette's Energy Drain (A): The Acquisition of Duracell 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.
Weaknesses Gillette's Energy Drain (A): The Acquisition of Duracell | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gillette's Energy Drain (A): The Acquisition of Duracell are -
Interest costs
– Compare to the competition, Duracell Gillette's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Duracell Gillette's 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 Gillette's Energy Drain (A): The Acquisition of Duracell HBR case study mentions - Duracell Gillette's 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.
Low market penetration in new markets
– Outside its home market of Duracell Gillette's, firm in the HBR case study Gillette's Energy Drain (A): The Acquisition of Duracell needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Duracell Gillette's 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.
Aligning sales with marketing
– It come across in the case study Gillette's Energy Drain (A): The Acquisition of Duracell 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 Gillette's Energy Drain (A): The Acquisition of Duracell can leverage the sales team experience to cultivate customer relationships as Duracell Gillette's is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Duracell Gillette'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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Duracell Gillette's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Gillette's Energy Drain (A): The Acquisition of Duracell can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Duracell Gillette's supply chain. Even after few cautionary changes mentioned in the HBR case study - Gillette's Energy Drain (A): The Acquisition of Duracell, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Duracell Gillette's vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Gillette's Energy Drain (A): The Acquisition of Duracell 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 Duracell Gillette's has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gillette's Energy Drain (A): The Acquisition of Duracell, it seems that the employees of Duracell Gillette'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.
Opportunities Gillette's Energy Drain (A): The Acquisition of Duracell | 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 Gillette's Energy Drain (A): The Acquisition of Duracell are -
Loyalty marketing
– Duracell Gillette's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Duracell Gillette'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, Duracell Gillette's can use these opportunities to build new business models that can help the communities that Duracell Gillette's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Duracell Gillette's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gillette's Energy Drain (A): The Acquisition of Duracell 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 Duracell Gillette'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 Duracell Gillette'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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Duracell Gillette's 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, Gillette's Energy Drain (A): The Acquisition of Duracell, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Duracell Gillette'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.
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. Duracell Gillette's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Duracell Gillette'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. Duracell Gillette's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Duracell Gillette'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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Duracell Gillette'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 Duracell Gillette's to hire the very best people irrespective of their geographical location.
Threats Gillette's Energy Drain (A): The Acquisition of Duracell External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gillette's Energy Drain (A): The Acquisition of Duracell are -
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.
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 Duracell Gillette's business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Duracell Gillette's 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 Duracell Gillette's.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Duracell Gillette'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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Duracell Gillette's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Duracell Gillette'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. Duracell Gillette's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Duracell Gillette's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Duracell Gillette's 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, Duracell Gillette'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 Gillette's Energy Drain (A): The Acquisition of Duracell .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gillette's Energy Drain (A): The Acquisition of Duracell, Duracell Gillette's 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 .
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 Duracell Gillette's in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Gillette's Energy Drain (A): The Acquisition of Duracell 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 Gillette's Energy Drain (A): The Acquisition of Duracell 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 Gillette's Energy Drain (A): The Acquisition of Duracell 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 Gillette's Energy Drain (A): The Acquisition of Duracell 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 Gillette's Energy Drain (A): The Acquisition of Duracell 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 Duracell Gillette's needs to make to build a sustainable competitive advantage.
