Case Study Description of Procter & Gamble: Children's Safe Drinking Water (A)
This is a Darden case study.In 1995, Procter & Gamble (P&G) scientists began researching methods of water treatment for use in communities facing water crises. P&G, one of the world's largest consumer products companies, was interested in bringing industrial-quality water treatment to remote areas worldwide, because the lack of clean water, primarily in developing countries, was alarming. In the latter half of the 1990s, approximately 1.1 billion (out of a worldwide population of around 5.6 billion) people lacked access to clean drinking water or sanitation facilities. An estimated 6 million children died annually from diseases, including diarrhea, hookworm, and trachoma, brought about by contaminated water. Many of these deaths were preventable if a water sanitation product was paired with effective education and distribution. With a long history of scientific research and innovation in health, hygiene, and nutrition, P&G considered ways it could address the safe drinking-water crisis as the new millennium approached. Although the company had a vast array of successful products, P&G did not offer anything that involved water purification, either domestically or in developing countries where poverty, lack of infrastructure, and inaccessibility of remote communities made the prospect of cleaning up the water more difficult.
Authors :: Jenny Mead, Laura Pincus Hartman, Justin Sheehan
Swot Analysis of "Procter & Gamble: Children's Safe Drinking Water (A)" written by Jenny Mead, Laura Pincus Hartman, Justin Sheehan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Water Drinking facing as an external strategic factors. Some of the topics covered in Procter & Gamble: Children's Safe Drinking Water (A) case study are - Strategic Management Strategies, Crisis management, Emerging markets, Ethics, Leadership, Social responsibility, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Procter & Gamble: Children's Safe Drinking Water (A) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Procter & Gamble: Children's Safe Drinking Water (A)
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 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Water Drinking, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Water Drinking 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Procter & Gamble: Children's Safe Drinking Water (A) case study
2. Improving business portfolio management of Water Drinking
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 Water Drinking
Strengths Procter & Gamble: Children's Safe Drinking Water (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Water Drinking in Procter & Gamble: Children's Safe Drinking Water (A) Harvard Business Review case study are -
Innovation driven organization
– Water Drinking is one of the most innovative firm in sector. Manager in Procter & Gamble: Children's Safe Drinking Water (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Water Drinking 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 Global Business segment
- digital transformation varies from industry to industry. For Water Drinking digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Water Drinking 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.
Diverse revenue streams
– Water Drinking is present in almost all the verticals within the industry. This has provided firm in Procter & Gamble: Children's Safe Drinking Water (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.
Cross disciplinary teams
– Horizontal connected teams at the Water Drinking 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.
Superior customer experience
– The customer experience strategy of Water Drinking in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Water Drinking 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 (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.
Training and development
– Water Drinking has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Procter & Gamble: Children's Safe Drinking Water (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Global Business field
– Water Drinking 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 Water Drinking in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Water Drinking 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 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Procter & Gamble: Children's Safe Drinking Water (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.
Sustainable margins compare to other players in Global Business industry
– Procter & Gamble: Children's Safe Drinking Water (A) firm has clearly differentiated products in the market place. This has enabled Water Drinking to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Water Drinking to invest into research and development (R&D) and innovation.
Weaknesses Procter & Gamble: Children's Safe Drinking Water (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Procter & Gamble: Children's Safe Drinking Water (A) are -
Interest costs
– Compare to the competition, Water Drinking 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Water Drinking 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 (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.
High operating costs
– Compare to the competitors, firm in the HBR case study Procter & Gamble: Children's Safe Drinking Water (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 Water Drinking 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Procter & Gamble: Children's Safe Drinking Water (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 Procter & Gamble: Children's Safe Drinking Water (A) can leverage the sales team experience to cultivate customer relationships as Water Drinking is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Water Drinking 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 decision making process
– As mentioned earlier in the report, Water Drinking 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. Water Drinking 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.
No frontier risks strategy
– After analyzing the HBR case study Procter & Gamble: Children's Safe Drinking Water (A), it seems that company is thinking about the frontier risks that can impact Global Business 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.
Skills based hiring
– The stress on hiring functional specialists at Water Drinking 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.
High cash cycle compare to competitors
Water Drinking 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Water Drinking 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.
Lack of clear differentiation of Water Drinking products
– To increase the profitability and margins on the products, Water Drinking needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Procter & Gamble: Children's Safe Drinking Water (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 Procter & Gamble: Children's Safe Drinking Water (A) are -
Learning at scale
– Online learning technologies has now opened space for Water Drinking 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.
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. Water Drinking 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. Water Drinking 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Water Drinking 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 Water Drinking has opened avenues for new revenue streams for the organization in the industry. This can help Water Drinking to build a more holistic ecosystem as suggested in the Procter & Gamble: Children's Safe Drinking Water (A) case study. Water Drinking can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Water Drinking 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 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Water Drinking to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Water Drinking can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Procter & Gamble: Children's Safe Drinking Water (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Water Drinking 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.
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 Water Drinking in the consumer business. Now Water Drinking can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Water Drinking can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Procter & Gamble: Children's Safe Drinking Water (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.
Manufacturing automation
– Water Drinking can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Water Drinking 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.
Leveraging digital technologies
– Water Drinking 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Water Drinking can use these opportunities to build new business models that can help the communities that Water Drinking operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Procter & Gamble: Children's Safe Drinking Water (A) 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 (A) are -
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. Water Drinking 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 dependence on third party suppliers
– Water Drinking 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.
Environmental challenges
– Water Drinking 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. Water Drinking can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Water Drinking in the Global Business industry. The Global Business 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.
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 Water Drinking business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Water Drinking.
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. Water Drinking needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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. Water Drinking can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Water Drinking 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 Global Business industry regulations.
Stagnating economy with rate increase
– Water Drinking 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 wage structure of Water Drinking
– 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 Water Drinking.
Technology acceleration in Forth Industrial Revolution
– Water Drinking has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Water Drinking 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.
Weighted SWOT Analysis of Procter & Gamble: Children's Safe Drinking Water (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 Procter & Gamble: Children's Safe Drinking Water (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 Procter & Gamble: Children's Safe Drinking Water (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 Procter & Gamble: Children's Safe Drinking Water (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 Procter & Gamble: Children's Safe Drinking Water (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 Water Drinking needs to make to build a sustainable competitive advantage.