Case Study Description of Colgate-Palmolive in Mexico (Abridged)
Describes the Mexican subsidiary of Colgate-Palmolive as it sets its strategy for coping with hyperinflation and the November 1987 devaluation of the peso.
Swot Analysis of "Colgate-Palmolive in Mexico (Abridged)" written by Michael G. Rukstad, Julia Horn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Colgate Palmolive facing as an external strategic factors. Some of the topics covered in Colgate-Palmolive in Mexico (Abridged) case study are - Strategic Management Strategies, Government, Recession and Global Business.
Some of the macro environment factors that can be used to understand the Colgate-Palmolive in Mexico (Abridged) casestudy better are - – technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Colgate-Palmolive in Mexico (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Colgate-Palmolive in Mexico (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Colgate Palmolive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Colgate Palmolive 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 Colgate-Palmolive in Mexico (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Colgate-Palmolive in Mexico (Abridged) case study
2. Improving business portfolio management of Colgate Palmolive
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 Colgate Palmolive
Strengths Colgate-Palmolive in Mexico (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Colgate Palmolive in Colgate-Palmolive in Mexico (Abridged) Harvard Business Review case study are -
Highly skilled collaborators
– Colgate Palmolive 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 Colgate-Palmolive in Mexico (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Colgate Palmolive has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Colgate-Palmolive in Mexico (Abridged) 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 recruit top talent
– Colgate Palmolive is one of the leading recruiters in the industry. Managers in the Colgate-Palmolive in Mexico (Abridged) 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 Colgate Palmolive 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.
Sustainable margins compare to other players in Global Business industry
– Colgate-Palmolive in Mexico (Abridged) firm has clearly differentiated products in the market place. This has enabled Colgate Palmolive to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Colgate Palmolive to invest into research and development (R&D) and innovation.
Strong track record of project management
– Colgate Palmolive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Colgate Palmolive has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Colgate Palmolive 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
– Colgate Palmolive is present in almost all the verticals within the industry. This has provided firm in Colgate-Palmolive in Mexico (Abridged) 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.
Analytics focus
– Colgate Palmolive 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 Michael G. Rukstad, Julia Horn can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Global Business field
– Colgate Palmolive 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 Colgate Palmolive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Colgate Palmolive 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 Colgate Palmolive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Colgate-Palmolive in Mexico (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Colgate Palmolive in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Colgate-Palmolive in Mexico (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colgate-Palmolive in Mexico (Abridged) are -
Capital Spending Reduction
– Even during the low interest decade, Colgate Palmolive 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 Colgate Palmolive 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.
Low market penetration in new markets
– Outside its home market of Colgate Palmolive, firm in the HBR case study Colgate-Palmolive in Mexico (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Colgate-Palmolive in Mexico (Abridged) 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 Colgate-Palmolive in Mexico (Abridged) can leverage the sales team experience to cultivate customer relationships as Colgate Palmolive is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Colgate Palmolive is dominated by functional specialists. It is not different from other players in the Global Business segment. Colgate Palmolive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Colgate Palmolive to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael G. Rukstad, Julia Horn suggests that, Colgate Palmolive 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.
Products dominated business model
– Even though Colgate Palmolive 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 - Colgate-Palmolive in Mexico (Abridged) should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Colgate Palmolive 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 cash cycle compare to competitors
Colgate Palmolive has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Colgate-Palmolive in Mexico (Abridged) 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 Colgate Palmolive 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Colgate-Palmolive in Mexico (Abridged), it seems that the employees of Colgate Palmolive 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.
Opportunities Colgate-Palmolive in Mexico (Abridged) | 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 Colgate-Palmolive in Mexico (Abridged) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Colgate Palmolive is facing challenges because of the dominance of functional experts in the organization. Colgate-Palmolive in Mexico (Abridged) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Colgate Palmolive 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.
Buying journey improvements
– Colgate Palmolive can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Colgate-Palmolive in Mexico (Abridged) 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.
Leveraging digital technologies
– Colgate Palmolive 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.
Learning at scale
– Online learning technologies has now opened space for Colgate Palmolive 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Colgate Palmolive 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.
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 Colgate Palmolive 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.
Creating value in data economy
– The success of analytics program of Colgate Palmolive has opened avenues for new revenue streams for the organization in the industry. This can help Colgate Palmolive to build a more holistic ecosystem as suggested in the Colgate-Palmolive in Mexico (Abridged) case study. Colgate Palmolive can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Colgate Palmolive 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. Colgate Palmolive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Colgate Palmolive can use these opportunities to build new business models that can help the communities that Colgate Palmolive 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 Colgate Palmolive 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
– Colgate Palmolive 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 Colgate-Palmolive in Mexico (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Colgate Palmolive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Colgate-Palmolive in Mexico (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Colgate-Palmolive in Mexico (Abridged) are -
High dependence on third party suppliers
– Colgate Palmolive 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.
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. Colgate Palmolive needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Regulatory challenges
– Colgate Palmolive 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.
Shortening product life cycle
– it is one of the major threat that Colgate Palmolive is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Colgate Palmolive
– 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 Colgate Palmolive.
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. Colgate Palmolive 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.
Stagnating economy with rate increase
– Colgate Palmolive 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.
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.
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 Colgate Palmolive.
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. Colgate Palmolive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Colgate Palmolive 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 Colgate Palmolive business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Colgate-Palmolive in Mexico (Abridged) 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 Colgate-Palmolive in Mexico (Abridged) 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 Colgate-Palmolive in Mexico (Abridged) 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 Colgate-Palmolive in Mexico (Abridged) 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 Colgate-Palmolive in Mexico (Abridged) 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 Colgate Palmolive needs to make to build a sustainable competitive advantage.
