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 - – technology disruption, increasing transportation and logistics costs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, geopolitical disruptions, 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 -
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Snus Cigarettes 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.
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.
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.
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.
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.
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.
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.
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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Snus Cigarettes 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Snus Cigarettes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Snus: No Smoke Without Fire? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High 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 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.
Interest costs
– Compare to the competition, Snus Cigarettes has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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 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.
Capital Spending Reduction
– Even during the low interest decade, Snus Cigarettes 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.
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.
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.
Lack of clear differentiation of Snus Cigarettes products
– To increase the profitability and margins on the products, Snus Cigarettes needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Snus Cigarettes is facing challenges because of the dominance of functional experts in the organization. Snus: No Smoke Without Fire? 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.
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.
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.
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.
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.
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.
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.
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.
Buying journey improvements
– Snus Cigarettes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Snus: No Smoke Without Fire? 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.
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.
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 -
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.
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? .
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.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Snus Cigarettes 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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Snus: No Smoke Without Fire?, Snus Cigarettes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
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.