Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A)
CEO Bill Nichol must somehow negotiate a surprise ultimatum from Walmart, his largest customer, about his largest and most profitable product line: "We're dropping it." Among its hosiery products, the Kentucky Derby Hosiery Co. produces and sells a branded line of infant socks to Walmart under an expensive license from another manufacturer, subject to unconditional, multi-year sales minimums and significant forward financial obligations. Taking out long-term bank loans, his firm has purchased modern, high-speed machinery to manufacture this line. Yet his Walmart contracts run only one year at a time. Without the Walmart volume and profit on these branded infant socks, Kentucky Derby Hosiery Co. faces financial distress. In a generally bleak North American textile environment, Nichol ponders the most promising negotiating strategy and tactics to rescue this product line.
Swot Analysis of "Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A)" written by James K. Sebenius, Ellen Knebel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Walmart Nichol facing as an external strategic factors. Some of the topics covered in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) case study are - Strategic Management Strategies, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is backlash against globalization,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Walmart Nichol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Walmart Nichol 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) can be done for the following purposes –
1. Strategic planning using facts provided in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) case study
2. Improving business portfolio management of Walmart Nichol
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 Walmart Nichol
Strengths Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Walmart Nichol in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Walmart Nichol in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Walmart Nichol 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.
High brand equity
– Walmart Nichol has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Walmart Nichol to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Walmart Nichol
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Walmart Nichol does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Walmart Nichol has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Walmart Nichol 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.
Innovation driven organization
– Walmart Nichol is one of the most innovative firm in sector. Manager in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Walmart Nichol is present in almost all the verticals within the industry. This has provided firm in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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.
Ability to recruit top talent
– Walmart Nichol is one of the leading recruiters in the industry. Managers in the Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Walmart Nichol is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Walmart Nichol digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Walmart Nichol 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.
Effective Research and Development (R&D)
– Walmart Nichol 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Walmart Nichol 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 Walmart Nichol is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) are -
Interest costs
– Compare to the competition, Walmart Nichol 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A), it seems that the employees of Walmart Nichol 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.
Capital Spending Reduction
– Even during the low interest decade, Walmart Nichol 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Walmart Nichol is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) can leverage the sales team experience to cultivate customer relationships as Walmart Nichol is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Walmart Nichol 's lucrative customers.
Products dominated business model
– Even though Walmart Nichol 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 - Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) HBR case study mentions - Walmart Nichol takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Walmart Nichol 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.
Increasing silos among functional specialists
– The organizational structure of Walmart Nichol is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Walmart Nichol needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Walmart Nichol to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Walmart Nichol, firm in the HBR case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) | 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Walmart Nichol is facing challenges because of the dominance of functional experts in the organization. Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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.
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. Walmart Nichol can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Walmart Nichol 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Walmart Nichol to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Walmart Nichol 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
– Walmart Nichol 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.
Manufacturing automation
– Walmart Nichol 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.
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. Walmart Nichol 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. Walmart Nichol 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Walmart Nichol can use these opportunities to build new business models that can help the communities that Walmart Nichol operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Walmart Nichol to increase its market reach. Walmart Nichol will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Walmart Nichol 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.
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 Walmart Nichol in the consumer business. Now Walmart Nichol can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Walmart Nichol has opened avenues for new revenue streams for the organization in the industry. This can help Walmart Nichol to build a more holistic ecosystem as suggested in the Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) case study. Walmart Nichol can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Walmart Nichol 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.
Threats Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Walmart Nichol with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Walmart Nichol 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. Walmart Nichol can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Walmart Nichol 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 Walmart Nichol 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
– Walmart Nichol 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.
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 Walmart Nichol business can come under increasing regulations regarding data privacy, data security, etc.
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 Walmart Nichol.
Regulatory challenges
– Walmart Nichol 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.
Increasing wage structure of Walmart Nichol
– 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 Walmart Nichol.
Shortening product life cycle
– it is one of the major threat that Walmart Nichol is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Walmart Nichol has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Walmart Nichol 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Walmart Nichol needs to make to build a sustainable competitive advantage.
