MBA students Tim Joyce and Brandon Cornuke had what they believed was a great product concept: a body powder that could be delivered in an aerosol spray. Current market-leading powders such as Gold Bond and Johnson's Baby Powder involved messy application, as they were only available in "dump-on" form. Worse, because powders deposited on top of the skin didn't adhere to it, they tended not to last long. Joyce and Cornuke believed an aerosol powder spray would solve these problems. They called their product concept Dry Goods. However, taking Dry Goods from idea to reality presented some serious challenges. How would two students without access to a lab be able to research and develop a complex chemical/physical process like aerosol delivery, let alone manufacture it once they had a proven prototype? To address these problems, the two entrepreneurs sought out a contract manufacturing partner. After identifying a number of options, Joyce and Cornuke had to decide which partner offered them the best chances of success, given their goals and financial constraints.
Authors :: James Shein, Tim Joyce, Brandon Cornuke
Swot Analysis of "Dry Goods" written by James Shein, Tim Joyce, Brandon Cornuke includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cornuke Aerosol facing as an external strategic factors. Some of the topics covered in Dry Goods case study are - Strategic Management Strategies, Manufacturing, Negotiations, Organizational culture and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Dry Goods casestudy better are - – technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dry Goods case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cornuke Aerosol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cornuke Aerosol 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 Dry Goods can be done for the following purposes –
1. Strategic planning using facts provided in Dry Goods case study
2. Improving business portfolio management of Cornuke Aerosol
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cornuke Aerosol
Strengths Dry Goods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cornuke Aerosol in Dry Goods Harvard Business Review case study are -
High brand equity
– Cornuke Aerosol has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cornuke Aerosol to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Cornuke Aerosol is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Cornuke Aerosol is one of the most innovative firm in sector. Manager in Dry Goods Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Cornuke Aerosol is one of the leading recruiters in the industry. Managers in the Dry Goods are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Cornuke Aerosol has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cornuke Aerosol 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.
Analytics focus
– Cornuke Aerosol 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 James Shein, Tim Joyce, Brandon Cornuke 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.
Superior customer experience
– The customer experience strategy of Cornuke Aerosol in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Cornuke Aerosol 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 Dry Goods - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Cornuke Aerosol is present in almost all the verticals within the industry. This has provided firm in Dry Goods 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Cornuke Aerosol digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cornuke Aerosol has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Dry Goods firm has clearly differentiated products in the market place. This has enabled Cornuke Aerosol to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Cornuke Aerosol to invest into research and development (R&D) and innovation.
Learning organization
- Cornuke Aerosol 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 Cornuke Aerosol is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dry Goods Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Dry Goods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dry Goods are -
Aligning sales with marketing
– It come across in the case study Dry Goods 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 Dry Goods can leverage the sales team experience to cultivate customer relationships as Cornuke Aerosol is planning to shift buying processes online.
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 Cornuke Aerosol supply chain. Even after few cautionary changes mentioned in the HBR case study - Dry Goods, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cornuke Aerosol vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Cornuke Aerosol 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.
Capital Spending Reduction
– Even during the low interest decade, Cornuke Aerosol 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dry Goods 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 Cornuke Aerosol has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Cornuke Aerosol, firm in the HBR case study Dry Goods needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Dry Goods HBR case study mentions - Cornuke Aerosol 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cornuke Aerosol is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dry Goods 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, James Shein, Tim Joyce, Brandon Cornuke suggests that, Cornuke Aerosol 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.
Increasing silos among functional specialists
– The organizational structure of Cornuke Aerosol is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Cornuke Aerosol needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cornuke Aerosol to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Cornuke Aerosol 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.
Opportunities Dry Goods | 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 Dry Goods are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Cornuke Aerosol can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cornuke Aerosol can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cornuke Aerosol is facing challenges because of the dominance of functional experts in the organization. Dry Goods 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cornuke Aerosol in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Cornuke Aerosol 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 Dry Goods - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cornuke Aerosol to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Cornuke Aerosol to increase its market reach. Cornuke Aerosol 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cornuke Aerosol 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cornuke Aerosol 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, Dry Goods, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Cornuke Aerosol 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.
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 Cornuke Aerosol 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
– Cornuke Aerosol can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dry Goods 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
– Cornuke Aerosol 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cornuke Aerosol can use these opportunities to build new business models that can help the communities that Cornuke Aerosol operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats Dry Goods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dry Goods are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cornuke Aerosol 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 Dry Goods .
High dependence on third party suppliers
– Cornuke Aerosol 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.
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 Cornuke Aerosol
– 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 Cornuke Aerosol.
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. Cornuke Aerosol needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Consumer confidence and its impact on Cornuke Aerosol demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cornuke Aerosol.
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 Cornuke Aerosol in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Cornuke Aerosol is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Dry Goods, Cornuke Aerosol may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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. Cornuke Aerosol 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.
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.
Stagnating economy with rate increase
– Cornuke Aerosol 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.
Weighted SWOT Analysis of Dry Goods 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 Dry Goods 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 Dry Goods 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 Dry Goods 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 Dry Goods 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 Cornuke Aerosol needs to make to build a sustainable competitive advantage.