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 - – supply chains are disrupted by pandemic , increasing energy prices, wage bills are increasing, there is backlash against globalization, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, increasing transportation and logistics costs, 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 -
Sustainable margins compare to other players in Strategy & Execution industry
– Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) firm has clearly differentiated products in the market place. This has enabled Walmart Nichol to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Walmart Nichol to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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.
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.
Ability to lead change in Strategy & Execution field
– Walmart Nichol 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 Walmart Nichol in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Walmart Nichol 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.
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.
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 Walmart Nichol supply chain. Even after few cautionary changes mentioned in the HBR case study - Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Walmart Nichol vulnerable to further global disruptions in South East Asia.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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 Walmart Nichol has relatively successful track record of launching new products.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A), is just above the industry average. Walmart Nichol 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.
High bargaining power of channel partners
– Because of the regulatory requirements, James K. Sebenius, Ellen Knebel suggests that, Walmart Nichol 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Walmart Nichol 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 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 -
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Walmart Nichol 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.
Buying journey improvements
– Walmart Nichol can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) 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.
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.
Learning at scale
– Online learning technologies has now opened space for Walmart Nichol to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Walmart Nichol 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 Walmart Nichol to hire the very best people irrespective of their geographical location.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Walmart Nichol can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A), Walmart Nichol 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 .
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.
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.
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.
High dependence on third party suppliers
– Walmart Nichol 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.
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 Walmart Nichol in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Walmart Nichol 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 Bill Nichol Negotiates with Walmart: Hard Bargains over Soft Goods (A) .
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. Walmart Nichol can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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. Walmart Nichol needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.