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 - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing transportation and logistics costs, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, 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 -
Operational resilience
– The operational resilience strategy in the Snus: No Smoke Without Fire? 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.
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.
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.
Superior customer experience
– The customer experience strategy of Snus Cigarettes in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Ability to recruit top talent
– Snus Cigarettes is one of the leading recruiters in the industry. Managers in the Snus: No Smoke Without Fire? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Strong track record of project management
– Snus Cigarettes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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 -
Slow decision making process
– As mentioned earlier in the report, Snus Cigarettes 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. Snus Cigarettes 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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Snus: No Smoke Without Fire? 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 Snus Cigarettes 's lucrative customers.
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.
Need for greater diversity
– Snus Cigarettes 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.
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.
Increasing silos among functional specialists
– The organizational structure of Snus Cigarettes is dominated by functional specialists. It is not different from other players in the Global Business segment. Snus Cigarettes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Snus Cigarettes to focus more on services rather than just following the product oriented approach.
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.
No frontier risks strategy
– After analyzing the HBR case study Snus: No Smoke Without Fire?, 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Snus: No Smoke Without Fire? 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 Snus Cigarettes has relatively successful track record of launching new products.
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 -
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.
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.
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 Snus Cigarettes in the consumer business. Now Snus Cigarettes can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Snus Cigarettes 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.
Using analytics as competitive advantage
– Snus Cigarettes 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 Snus: No Smoke Without Fire? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Snus Cigarettes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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. Snus Cigarettes 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. Snus Cigarettes 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.
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.
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.
Developing new processes and practices
– Snus Cigarettes 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.
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 -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Snus Cigarettes can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Snus: No Smoke Without Fire? .
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.
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.
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. Snus Cigarettes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Snus Cigarettes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
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. Snus Cigarettes 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.
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.