Snus: No Smoke Without Fire? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Snus: No Smoke Without Fire?
In almost every county in the world, more than 20% of the population smoke. The health hazards of cigarettes are many and severe. Recently, most developed countries have introduced laws to restrict where smokers can light up. These laws might encourage smokers to consume less or to quit entirely. Sweden stands out among peer countries as its smoking population is only 18% of all adults. Consequently, it has low rates of smoking-related illness and death. The Swedes consume as much nicotine as elsewhere, however, because many of them use a traditional smokeless tobacco product called snus. Since the tobacco in snus is pasteurized, not fermented as in cigarettes and other smokeless tobaccos, it contains far fewer cancer-causing substances. Smokers may reduce the harm they cause themselves by consuming more snus, and fewer cigarettes. The dilemma for tobacco companies is whether they should introduce snus in markets where they sell cigarettes. And, if so, should they market it as a compliment to cigarettes, to be consumed where smoking is banned, or as a substitute to cigarettes, with the aim of smokers quitting cigarettes altogether? The sale of snus is banned in the EU (except in Sweden) but legal in other countries like the US and Japan. The dilemma for policy makers is whether to legalize snus and how to regulate it where it may be legally sold. The case explores the co-dependence of marketing in the private sector and public policy, and how each side must take the incentives, actions and reactions of the other into account.
Swot Analysis of "Snus: No Smoke Without Fire?" written by John Walsh, Mope Ogunsulire includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Snus Cigarettes facing as an external strategic factors. Some of the topics covered in Snus: No Smoke Without Fire? case study are - Strategic Management Strategies, International business and Global Business.
Some of the macro environment factors that can be used to understand the Snus: No Smoke Without Fire? casestudy better are - – increasing transportation and logistics costs, technology disruption, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Snus: No Smoke Without Fire?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Snus: No Smoke Without Fire? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Snus Cigarettes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Snus Cigarettes 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 Snus: No Smoke Without Fire? can be done for the following purposes –
1. Strategic planning using facts provided in Snus: No Smoke Without Fire? case study
2. Improving business portfolio management of Snus Cigarettes
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 Snus Cigarettes
Strengths Snus: No Smoke Without Fire? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Snus Cigarettes in Snus: No Smoke Without Fire? Harvard Business Review case study are -
Successful track record of launching new products
– Snus Cigarettes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Snus Cigarettes 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.
Effective Research and Development (R&D)
– Snus Cigarettes 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 Snus: No Smoke Without Fire? - 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
– Snus Cigarettes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Snus: No Smoke Without Fire? 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.
High switching costs
– The high switching costs that Snus Cigarettes 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.
Ability to lead change in Global Business field
– Snus Cigarettes 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 Snus Cigarettes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Snus Cigarettes is one of the most innovative firm in sector. Manager in Snus: No Smoke Without Fire? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– Snus: No Smoke Without Fire? firm has clearly differentiated products in the market place. This has enabled Snus Cigarettes to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Snus Cigarettes to invest into research and development (R&D) and innovation.
High brand equity
– Snus Cigarettes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Snus Cigarettes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Snus Cigarettes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Snus Cigarettes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Snus Cigarettes 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 Snus: No Smoke Without Fire? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Snus Cigarettes is present in almost all the verticals within the industry. This has provided firm in Snus: No Smoke Without Fire? 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
– Snus Cigarettes 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 John Walsh, Mope Ogunsulire 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.
Weaknesses Snus: No Smoke Without Fire? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Snus: No Smoke Without Fire? are -
Products dominated business model
– Even though Snus Cigarettes 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 - Snus: No Smoke Without Fire? should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, John Walsh, Mope Ogunsulire suggests that, Snus Cigarettes 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.
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 Snus Cigarettes supply chain. Even after few cautionary changes mentioned in the HBR case study - Snus: No Smoke Without Fire?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Snus Cigarettes vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Snus Cigarettes, firm in the HBR case study Snus: No Smoke Without Fire? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Snus: No Smoke Without Fire? HBR case study mentions - Snus Cigarettes 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Snus: No Smoke Without Fire?, in the dynamic environment Snus Cigarettes has struggled to respond to the nimble upstart competition. Snus Cigarettes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Snus: No Smoke Without Fire?, it seems that the employees of Snus Cigarettes 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 Snus: No Smoke Without Fire? 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 Snus: No Smoke Without Fire? can leverage the sales team experience to cultivate customer relationships as Snus Cigarettes is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Snus: No Smoke Without Fire?, is just above the industry average. Snus Cigarettes needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Snus Cigarettes 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.
Skills based hiring
– The stress on hiring functional specialists at Snus Cigarettes 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.
Opportunities Snus: No Smoke Without Fire? | 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 Snus: No Smoke Without Fire? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Snus Cigarettes 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.
Loyalty marketing
– Snus Cigarettes 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Snus Cigarettes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Snus Cigarettes to increase its market reach. Snus Cigarettes 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.
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. Snus Cigarettes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Snus Cigarettes to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Snus Cigarettes to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Snus Cigarettes 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.
Building a culture of innovation
– managers at Snus Cigarettes 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Snus Cigarettes 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, Snus: No Smoke Without Fire?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Snus Cigarettes 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.
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 Snus Cigarettes 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Snus Cigarettes can use these opportunities to build new business models that can help the communities that Snus Cigarettes operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Snus Cigarettes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Snus: No Smoke Without Fire? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Snus: No Smoke Without Fire? are -
Increasing wage structure of Snus Cigarettes
– 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 Snus Cigarettes.
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 Snus Cigarettes business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Snus Cigarettes 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.
Shortening product life cycle
– it is one of the major threat that Snus Cigarettes is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Snus Cigarettes 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
– Snus Cigarettes has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Snus Cigarettes 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.
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.
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 Snus Cigarettes in the Global Business sector and impact the bottomline of the organization.
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. Snus Cigarettes needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Snus Cigarettes.
Environmental challenges
– Snus Cigarettes 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. Snus Cigarettes can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Snus Cigarettes 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Snus: No Smoke Without Fire? 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 Snus: No Smoke Without Fire? 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 Snus: No Smoke Without Fire? 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 Snus: No Smoke Without Fire? 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 Snus: No Smoke Without Fire? 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 Snus Cigarettes needs to make to build a sustainable competitive advantage.
