Rhone-Poulenc, France's largest chemical firm, has achieved a major position in the United States as the result of an ambitious series of acquisitions. As it expanded in the United States from 1986 to 1990, Rhone-Poulenc management sought to take a "hands-off" approach and allowed the local management to build a coherent and stable U.S. operation. By 1991, however, there is a perceived imperative for the global management of all product lines. A proposal is made to shift the major axis of the firm toward a worldwide product structure, with the effect of changing the role of the U.S. country management. Whether this move makes sense, what the best structure might be, and how any changes are to be implemented are all topics for discussion in this case.
Swot Analysis of "Rhone-Poulenc (B)" written by Philip M. Rosenzweig includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Poulenc Rhone facing as an external strategic factors. Some of the topics covered in Rhone-Poulenc (B) case study are - Strategic Management Strategies, Global strategy, Mergers & acquisitions, Operations management, Organizational structure and Global Business.
Some of the macro environment factors that can be used to understand the Rhone-Poulenc (B) casestudy better are - – central banks are concerned over increasing inflation, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, 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,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
Introduction to SWOT Analysis of Rhone-Poulenc (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rhone-Poulenc (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Poulenc Rhone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Poulenc Rhone 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 Rhone-Poulenc (B) can be done for the following purposes –
1. Strategic planning using facts provided in Rhone-Poulenc (B) case study
2. Improving business portfolio management of Poulenc Rhone
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 Poulenc Rhone
Strengths Rhone-Poulenc (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Poulenc Rhone in Rhone-Poulenc (B) Harvard Business Review case study are -
High brand equity
– Poulenc Rhone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Poulenc Rhone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Rhone-Poulenc (B) 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.
Low bargaining power of suppliers
– Suppliers of Poulenc Rhone in the sector have low bargaining power. Rhone-Poulenc (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Poulenc Rhone to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Poulenc Rhone 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.
Learning organization
- Poulenc Rhone 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 Poulenc Rhone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rhone-Poulenc (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Poulenc Rhone 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 Rhone-Poulenc (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Poulenc Rhone 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 Poulenc Rhone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Poulenc Rhone 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.
Sustainable margins compare to other players in Global Business industry
– Rhone-Poulenc (B) firm has clearly differentiated products in the market place. This has enabled Poulenc Rhone to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Poulenc Rhone to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Poulenc Rhone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Poulenc Rhone is present in almost all the verticals within the industry. This has provided firm in Rhone-Poulenc (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.
Successful track record of launching new products
– Poulenc Rhone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Poulenc Rhone 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.
Weaknesses Rhone-Poulenc (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rhone-Poulenc (B) are -
High cash cycle compare to competitors
Poulenc Rhone 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.
Increasing silos among functional specialists
– The organizational structure of Poulenc Rhone is dominated by functional specialists. It is not different from other players in the Global Business segment. Poulenc Rhone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Poulenc Rhone to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Rhone-Poulenc (B) HBR case study mentions - Poulenc Rhone 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Poulenc Rhone 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Rhone-Poulenc (B) 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 Poulenc Rhone 's lucrative customers.
Lack of clear differentiation of Poulenc Rhone products
– To increase the profitability and margins on the products, Poulenc Rhone needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Poulenc Rhone 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. Poulenc Rhone 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rhone-Poulenc (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 Poulenc Rhone has relatively successful track record of launching new products.
Need for greater diversity
– Poulenc Rhone 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rhone-Poulenc (B), it seems that the employees of Poulenc Rhone 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.
Aligning sales with marketing
– It come across in the case study Rhone-Poulenc (B) 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 Rhone-Poulenc (B) can leverage the sales team experience to cultivate customer relationships as Poulenc Rhone is planning to shift buying processes online.
Opportunities Rhone-Poulenc (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 Rhone-Poulenc (B) are -
Building a culture of innovation
– managers at Poulenc Rhone 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 Poulenc Rhone to increase its market reach. Poulenc Rhone 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.
Buying journey improvements
– Poulenc Rhone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rhone-Poulenc (B) 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.
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. Poulenc Rhone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Poulenc Rhone 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.
Loyalty marketing
– Poulenc Rhone 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.
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 Poulenc Rhone in the consumer business. Now Poulenc Rhone can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Poulenc Rhone 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.
Learning at scale
– Online learning technologies has now opened space for Poulenc Rhone 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Poulenc Rhone 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 Poulenc Rhone has opened avenues for new revenue streams for the organization in the industry. This can help Poulenc Rhone to build a more holistic ecosystem as suggested in the Rhone-Poulenc (B) case study. Poulenc Rhone can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Poulenc Rhone 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, Rhone-Poulenc (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Poulenc Rhone 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. Poulenc Rhone 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.
Threats Rhone-Poulenc (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rhone-Poulenc (B) are -
Technology acceleration in Forth Industrial Revolution
– Poulenc Rhone has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Poulenc Rhone 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.
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 Poulenc Rhone in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Poulenc Rhone is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Poulenc Rhone business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Poulenc Rhone 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.
High dependence on third party suppliers
– Poulenc Rhone 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.
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. Poulenc Rhone can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Poulenc Rhone 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. Poulenc Rhone can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Poulenc Rhone 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
– Poulenc Rhone 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.
Consumer confidence and its impact on Poulenc Rhone 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.
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 Poulenc Rhone.
Increasing wage structure of Poulenc Rhone
– 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 Poulenc Rhone.
Weighted SWOT Analysis of Rhone-Poulenc (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 Rhone-Poulenc (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 Rhone-Poulenc (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 Rhone-Poulenc (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 Rhone-Poulenc (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 Poulenc Rhone needs to make to build a sustainable competitive advantage.
