Case Study Description of Procter & Gamble: Children's Safe Drinking Water (B)
This is a Darden case study.In 1999, P&G purchased-through the acquisition of Recovery Engineering in a $265 million deal-PUR Water Filtration System, a point-of-use water filtration system. The PUR water filtration system used a combination of the flocculant iron sulfate, an agent that caused particles suspended in water to bind and form sediment, and calcium hypochlorite (chlorine), a disinfectant. After acquiring the product, P&G began to develop and expand it. With the success of PUR Water Filtration System, Procter & Gamble Health Sciences Institute (PGHSI) and its partners created the Children's Safe Drinking Water (CSDW) campaign, which targeted developing countries, in 2003. PUR was distributed, often at no cost, to poor countries where the drinking water was not safe, and elsewhere during emergencies: the Asian tsunami, flooding in Haiti, or cholera epidemics in Africa, among others. Through the CSDW program from 2003 to 2007, P&G had provided the sachets at no cost, made no profit on PUR sales, and donated programmatic funding to some of the CSDW projects. Between 2003 and 2007, 85 million sachets of PUR, treating 850 million liters of water, had been distributed globally in emergency response or sold through social marketing projects. With the help of its various partners, PGHSI had made the product available in 23 countries. Procter & Gamble had finally entered the water purification business but had chosen to augment its commercial and retail sales by helping bring clean drinking water to developing countries.
Authors :: Pat Werhane, Jenny Mead, Laura Pincus Hartman, Justin Sheehan
Swot Analysis of "Procter & Gamble: Children's Safe Drinking Water (B)" written by Pat Werhane, Jenny Mead, Laura Pincus Hartman, Justin Sheehan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pur Water facing as an external strategic factors. Some of the topics covered in Procter & Gamble: Children's Safe Drinking Water (B) case study are - Strategic Management Strategies, Business law, Crisis management, Emerging markets, Ethics, Financial management, Globalization, Innovation, Internet, Leadership, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Procter & Gamble: Children's Safe Drinking Water (B) casestudy better are - – supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, increasing energy prices, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
Introduction to SWOT Analysis of Procter & Gamble: Children's Safe Drinking Water (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Procter & Gamble: Children's Safe Drinking Water (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pur Water, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pur Water 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 Procter & Gamble: Children's Safe Drinking Water (B) can be done for the following purposes –
1. Strategic planning using facts provided in Procter & Gamble: Children's Safe Drinking Water (B) case study
2. Improving business portfolio management of Pur Water
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pur Water
Strengths Procter & Gamble: Children's Safe Drinking Water (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pur Water in Procter & Gamble: Children's Safe Drinking Water (B) Harvard Business Review case study are -
Highly skilled collaborators
– Pur Water 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 Procter & Gamble: Children's Safe Drinking Water (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Pur Water 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 Pat Werhane, Jenny Mead, Laura Pincus Hartman, Justin Sheehan 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.
Superior customer experience
– The customer experience strategy of Pur Water in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Pur Water has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pur Water 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.
Diverse revenue streams
– Pur Water is present in almost all the verticals within the industry. This has provided firm in Procter & Gamble: Children's Safe Drinking Water (B) 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.
Low bargaining power of suppliers
– Suppliers of Pur Water in the sector have low bargaining power. Procter & Gamble: Children's Safe Drinking Water (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pur Water to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Pur Water is one of the leading recruiters in the industry. Managers in the Procter & Gamble: Children's Safe Drinking Water (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Pur Water 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 switching costs
– The high switching costs that Pur Water has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Pur Water 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 Procter & Gamble: Children's Safe Drinking Water (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Pur Water is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Procter & Gamble: Children's Safe Drinking Water (B) firm has clearly differentiated products in the market place. This has enabled Pur Water to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Pur Water to invest into research and development (R&D) and innovation.
Weaknesses Procter & Gamble: Children's Safe Drinking Water (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Procter & Gamble: Children's Safe Drinking Water (B) are -
High cash cycle compare to competitors
Pur Water 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pur Water is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Procter & Gamble: Children's Safe Drinking Water (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Pur Water has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Pur Water even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Procter & Gamble: Children's Safe Drinking Water (B), in the dynamic environment Pur Water has struggled to respond to the nimble upstart competition. Pur Water has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Pur Water 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Pur Water 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.
Increasing silos among functional specialists
– The organizational structure of Pur Water is dominated by functional specialists. It is not different from other players in the Global Business segment. Pur Water needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pur Water to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Pat Werhane, Jenny Mead, Laura Pincus Hartman, Justin Sheehan suggests that, Pur Water 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.
Interest costs
– Compare to the competition, Pur Water 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Procter & Gamble: Children's Safe Drinking Water (B) 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 Pur Water has relatively successful track record of launching new products.
Need for greater diversity
– Pur Water 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.
Opportunities Procter & Gamble: Children's Safe Drinking Water (B) | 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 Procter & Gamble: Children's Safe Drinking Water (B) are -
Loyalty marketing
– Pur Water 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.
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. Pur Water can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Pur Water can develop new processes and procedures in Global Business 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 Pur Water 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 Global Business segment.
Better consumer reach
– The expansion of the 5G network will help Pur Water to increase its market reach. Pur Water 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pur Water 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 Pur Water to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pur Water in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Pur Water has opened avenues for new revenue streams for the organization in the industry. This can help Pur Water to build a more holistic ecosystem as suggested in the Procter & Gamble: Children's Safe Drinking Water (B) case study. Pur Water can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pur Water can use these opportunities to build new business models that can help the communities that Pur Water operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pur Water can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Pur Water 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 Procter & Gamble: Children's Safe Drinking Water (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pur Water to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pur Water 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. Pur Water 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 Pur Water in the consumer business. Now Pur Water can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Procter & Gamble: Children's Safe Drinking Water (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Procter & Gamble: Children's Safe Drinking Water (B) are -
Increasing wage structure of Pur Water
– 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 Pur Water.
Technology acceleration in Forth Industrial Revolution
– Pur Water has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Pur Water needs to keep up with the evolution of technology in the Global Business 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.
Consumer confidence and its impact on Pur Water 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Pur Water will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Pur Water needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Pur Water 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. Pur Water can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pur Water 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pur Water with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Pur Water 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 Pur Water.
High dependence on third party suppliers
– Pur Water 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.
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.
Weighted SWOT Analysis of Procter & Gamble: Children's Safe Drinking Water (B) 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 Procter & Gamble: Children's Safe Drinking Water (B) 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 Procter & Gamble: Children's Safe Drinking Water (B) 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 Procter & Gamble: Children's Safe Drinking Water (B) 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 Procter & Gamble: Children's Safe Drinking Water (B) 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 Pur Water needs to make to build a sustainable competitive advantage.
