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 - – increasing household debt because of falling income levels, technology disruption, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing commodity prices, increasing energy prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, 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 -
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Cornuke Aerosol 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.
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.
Training and development
– Cornuke Aerosol has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Dry Goods 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.
Organizational Resilience of Cornuke Aerosol
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cornuke Aerosol does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Highly skilled collaborators
– Cornuke Aerosol 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 Dry Goods HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Cornuke Aerosol in the sector have low bargaining power. Dry Goods has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cornuke Aerosol to manage not only supply disruptions but also source products at highly competitive prices.
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.
Weaknesses Dry Goods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dry Goods are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dry Goods, in the dynamic environment Cornuke Aerosol has struggled to respond to the nimble upstart competition. Cornuke Aerosol has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Dry Goods, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Lack of clear differentiation of Cornuke Aerosol products
– To increase the profitability and margins on the products, Cornuke Aerosol needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Dry Goods, is just above the industry average. Cornuke Aerosol 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.
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.
Interest costs
– Compare to the competition, Cornuke Aerosol 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.
Products dominated business model
– Even though Cornuke Aerosol 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 - Dry Goods should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Dry Goods 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 Cornuke Aerosol 's lucrative customers.
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.
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.
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 -
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.
Loyalty marketing
– Cornuke Aerosol 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.
Creating value in data economy
– The success of analytics program of Cornuke Aerosol has opened avenues for new revenue streams for the organization in the industry. This can help Cornuke Aerosol to build a more holistic ecosystem as suggested in the Dry Goods case study. Cornuke Aerosol can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Developing new processes and practices
– Cornuke Aerosol can develop new processes and procedures in Innovation & Entrepreneurship 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.
Building a culture of innovation
– managers at Cornuke Aerosol 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 Innovation & Entrepreneurship segment.
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 Cornuke Aerosol in the consumer business. Now Cornuke Aerosol can target international markets with far fewer capital restrictions requirements than the existing system.
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. Cornuke Aerosol can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cornuke Aerosol 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. Cornuke Aerosol 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.
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 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.
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.
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 .
Environmental challenges
– Cornuke Aerosol 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. Cornuke Aerosol can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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.
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.
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 Cornuke Aerosol business can come under increasing regulations regarding data privacy, data security, etc.
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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cornuke Aerosol 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. Cornuke Aerosol needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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.