Case Study Description of Campbell Soup Company: Selling Channel Innovation to Customers
Campbell Soup, like most food manufacturers, faced grocery chain and wholesale demand for its goods driven by Campbell's own promotional pricing structure rather than retail consumer demand. Former policies to encourage overstock created huge swings in production and inventory levels. Campbell's introduced continuous product replenishment (CPR) under which they would manage inventory for their customers, enabled by electronic data interchange to link supply to actual demand. Implementing this channel shift required a restructuring of relationships with its customers and a radical restructuring of its promotional policies.
Swot Analysis of "Campbell Soup Company: Selling Channel Innovation to Customers" written by Zeynep Ton, James L. McKenney includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Campbell's Soup facing as an external strategic factors. Some of the topics covered in Campbell Soup Company: Selling Channel Innovation to Customers case study are - Strategic Management Strategies, Customers, Data, IT, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Campbell Soup Company: Selling Channel Innovation to Customers casestudy better are - – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
Introduction to SWOT Analysis of Campbell Soup Company: Selling Channel Innovation to Customers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Campbell Soup Company: Selling Channel Innovation to Customers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Campbell's Soup, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Campbell's Soup 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 Campbell Soup Company: Selling Channel Innovation to Customers can be done for the following purposes –
1. Strategic planning using facts provided in Campbell Soup Company: Selling Channel Innovation to Customers case study
2. Improving business portfolio management of Campbell's Soup
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Campbell's Soup
Strengths Campbell Soup Company: Selling Channel Innovation to Customers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Campbell's Soup in Campbell Soup Company: Selling Channel Innovation to Customers Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Campbell Soup Company: Selling Channel Innovation to Customers 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.
Strong track record of project management
– Campbell's Soup is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Campbell's Soup 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 Zeynep Ton, James L. McKenney 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.
Ability to lead change in Technology & Operations field
– Campbell's Soup 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 Campbell's Soup in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Campbell's Soup is one of the leading recruiters in the industry. Managers in the Campbell Soup Company: Selling Channel Innovation to Customers are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Campbell's Soup 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 Campbell's Soup is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Campbell Soup Company: Selling Channel Innovation to Customers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Campbell's Soup 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.
Highly skilled collaborators
– Campbell's Soup 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 Campbell Soup Company: Selling Channel Innovation to Customers HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Campbell's Soup in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– Campbell Soup Company: Selling Channel Innovation to Customers firm has clearly differentiated products in the market place. This has enabled Campbell's Soup to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Campbell's Soup to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Campbell's Soup 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.
Organizational Resilience of Campbell's Soup
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Campbell's Soup does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Campbell Soup Company: Selling Channel Innovation to Customers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Campbell Soup Company: Selling Channel Innovation to Customers are -
Slow to strategic competitive environment developments
– As Campbell Soup Company: Selling Channel Innovation to Customers HBR case study mentions - Campbell's Soup 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Campbell Soup Company: Selling Channel Innovation to Customers, in the dynamic environment Campbell's Soup has struggled to respond to the nimble upstart competition. Campbell's Soup has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Campbell Soup Company: Selling Channel Innovation to Customers 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 Campbell's Soup 's lucrative customers.
High cash cycle compare to competitors
Campbell's Soup 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Zeynep Ton, James L. McKenney suggests that, Campbell's Soup 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Campbell's Soup is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Campbell Soup Company: Selling Channel Innovation to Customers can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Campbell Soup Company: Selling Channel Innovation to Customers, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Campbell's Soup, firm in the HBR case study Campbell Soup Company: Selling Channel Innovation to Customers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Campbell's Soup 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Campbell Soup Company: Selling Channel Innovation to Customers, it seems that the employees of Campbell's Soup 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 Campbell Soup Company: Selling Channel Innovation to Customers, is just above the industry average. Campbell's Soup 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.
Opportunities Campbell Soup Company: Selling Channel Innovation to Customers | 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 Campbell Soup Company: Selling Channel Innovation to Customers are -
Developing new processes and practices
– Campbell's Soup can develop new processes and procedures in Technology & Operations 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.
Building a culture of innovation
– managers at Campbell's Soup 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 Technology & Operations segment.
Leveraging digital technologies
– Campbell's Soup 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Campbell's Soup is facing challenges because of the dominance of functional experts in the organization. Campbell Soup Company: Selling Channel Innovation to Customers 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.
Learning at scale
– Online learning technologies has now opened space for Campbell's Soup 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.
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 Campbell's Soup 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Campbell's Soup can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Campbell's Soup can use these opportunities to build new business models that can help the communities that Campbell's Soup operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Creating value in data economy
– The success of analytics program of Campbell's Soup has opened avenues for new revenue streams for the organization in the industry. This can help Campbell's Soup to build a more holistic ecosystem as suggested in the Campbell Soup Company: Selling Channel Innovation to Customers case study. Campbell's Soup can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Campbell's Soup 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Campbell's Soup 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. Campbell's Soup 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.
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 Campbell's Soup in the consumer business. Now Campbell's Soup can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Campbell's Soup to increase its market reach. Campbell's Soup 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.
Threats Campbell Soup Company: Selling Channel Innovation to Customers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Campbell Soup Company: Selling Channel Innovation to Customers are -
Consumer confidence and its impact on Campbell's Soup 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 wage structure of Campbell's Soup
– 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 Campbell's Soup.
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.
High dependence on third party suppliers
– Campbell's Soup 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Campbell Soup Company: Selling Channel Innovation to Customers, Campbell's Soup may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Campbell's Soup.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Campbell's Soup with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Campbell's Soup 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. Campbell's Soup can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Campbell's Soup in the Technology & Operations sector and impact the bottomline of the organization.
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. Campbell's Soup needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Campbell's Soup business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Campbell's Soup 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Campbell's Soup 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 Campbell Soup Company: Selling Channel Innovation to Customers .
Weighted SWOT Analysis of Campbell Soup Company: Selling Channel Innovation to Customers 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 Campbell Soup Company: Selling Channel Innovation to Customers 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 Campbell Soup Company: Selling Channel Innovation to Customers 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 Campbell Soup Company: Selling Channel Innovation to Customers 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 Campbell Soup Company: Selling Channel Innovation to Customers 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 Campbell's Soup needs to make to build a sustainable competitive advantage.
