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 - – increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing transportation and logistics costs, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
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.
Analytics focus
– Water Drinking 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 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.
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.
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.
High switching costs
– The high switching costs that Water Drinking 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.
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.
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.
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.
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.
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.
Products dominated business model
– Even though Water Drinking 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 - Procter & Gamble: Children's Safe Drinking Water (A) should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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.
Need for greater diversity
– Water Drinking has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Water Drinking is dominated by functional specialists. It is not different from other players in the Global Business segment. Water Drinking needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Water Drinking 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 Procter & Gamble: Children's Safe Drinking Water (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 Water Drinking has relatively successful track record of launching new products.
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 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 Water Drinking supply chain. Even after few cautionary changes mentioned in the HBR case study - Procter & Gamble: Children's Safe Drinking Water (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Water Drinking vulnerable to further global disruptions in South East Asia.
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 -
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 Water Drinking 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.
Developing new processes and practices
– Water Drinking 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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Water Drinking can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Loyalty marketing
– Water Drinking 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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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 Water Drinking in the Global Business sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Procter & Gamble: Children's Safe Drinking Water (A), Water Drinking may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Consumer confidence and its impact on Water Drinking 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.
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
– 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Water Drinking with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
