Colgate-Palmolive (COLG) SWOT Analysis / TOWS Matrix / MBA Resources
Personal & Household Prods.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Colgate-Palmolive (India)
Based on various researches at Oak Spring University , Colgate-Palmolive is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
supply chains are disrupted by pandemic , wage bills are increasing, etc
Introduction to SWOT Analysis of Colgate-Palmolive
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Colgate-Palmolive can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Colgate-Palmolive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Colgate-Palmolive 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 Colgate-Palmolive can be done for the following purposes –
1. Strategic planning of Colgate-Palmolive
2. Improving business portfolio management of Colgate-Palmolive
3. Assessing feasibility of the new initiative in India
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Colgate-Palmolive
Strengths of Colgate-Palmolive | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Colgate-Palmolive are -
Operational resilience
– The operational resilience strategy of Colgate-Palmolive comprises – understanding the underlying the factors in the Personal & Household Prods. 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.
Ability to lead change in Personal & Household Prods.
– Colgate-Palmolive is one of the leading players in the Personal & Household Prods. industry in India. Over the years it has not only transformed the business landscape in the Personal & Household Prods. industry in India but also across the existing markets. The ability to lead change has enabled Colgate-Palmolive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Colgate-Palmolive in the Consumer/Non-Cyclical sector have low bargaining power. Colgate-Palmolive has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Colgate-Palmolive to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Colgate-Palmolive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Colgate-Palmolive 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 Personal & Household Prods. industry
– Colgate-Palmolive has clearly differentiated products in the market place. This has enabled Colgate-Palmolive to fetch slight price premium compare to the competitors in the Personal & Household Prods. industry. The sustainable margins have also helped Colgate-Palmolive to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Colgate-Palmolive is present in almost all the verticals within the Personal & Household Prods. industry. This has provided Colgate-Palmolive 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.
Highly skilled collaborators
– Colgate-Palmolive has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal & Household Prods. industry. Secondly the value chain collaborators of Colgate-Palmolive have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Colgate-Palmolive has one of the best training and development program in Consumer/Non-Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Colgate-Palmolive 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 Colgate-Palmolive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Colgate-Palmolive emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Colgate-Palmolive is one of the most innovative firm in Personal & Household Prods. sector.
Organizational Resilience of Colgate-Palmolive
– The covid-19 pandemic has put organizational resilience at the centre of everthing Colgate-Palmolive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Colgate-Palmolive is one of the leading players in the Personal & Household Prods. industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses of Colgate-Palmolive | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Colgate-Palmolive are -
Low market penetration in new markets
– Outside its home market of India, Colgate-Palmolive needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Personal & Household Prods. industry, Colgate-Palmolive 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.
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 Colgate-Palmolive supply chain. Even after few cautionary changes, Colgate-Palmolive is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Colgate-Palmolive vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Colgate-Palmolive 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 Personal & Household Prods. industry using digital technology.
High dependence on Colgate-Palmolive ‘s star products
– The top 2 products and services of Colgate-Palmolive still accounts for major business revenue. This dependence on star products in Personal & Household Prods. industry has resulted into insufficient focus on developing new products, even though Colgate-Palmolive has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Colgate-Palmolive is dominated by functional specialists. It is not different from other players in the Personal & Household Prods. industry, but Colgate-Palmolive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Colgate-Palmolive to focus more on services in the Personal & Household Prods. industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Colgate-Palmolive has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal & Household Prods. industry over the last five years. Colgate-Palmolive 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.
Skills based hiring in Personal & Household Prods. industry
– The stress on hiring functional specialists at Colgate-Palmolive has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Colgate-Palmolive has some of the most successful models in the Personal & Household Prods. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Colgate-Palmolive should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Colgate-Palmolive, in the dynamic environment of Personal & Household Prods. industry it has struggled to respond to the nimble upstart competition. Colgate-Palmolive has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Colgate-Palmolive has high operating costs in the Personal & Household Prods. industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Colgate-Palmolive lucrative customers.
Colgate-Palmolive Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Colgate-Palmolive are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Colgate-Palmolive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Colgate-Palmolive to increase its market reach. Colgate-Palmolive 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal & Household Prods. industry, but it has also influenced the consumer preferences. Colgate-Palmolive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Personal & Household Prods. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Colgate-Palmolive 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. Colgate-Palmolive 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Colgate-Palmolive is facing challenges because of the dominance of functional experts in the organization. Colgate-Palmolive can utilize new technology in the field of Personal & Household Prods. industry 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 Colgate-Palmolive in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal & Household Prods. industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Colgate-Palmolive can use these opportunities to build new business models that can help the communities that Colgate-Palmolive operates in. Secondly it can use opportunities from government spending in Personal & Household Prods. sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Colgate-Palmolive 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 Colgate-Palmolive to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Colgate-Palmolive can use the latest technology developments to improve its manufacturing and designing process in Personal & Household Prods. sector. 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.
Creating value in data economy
– The success of analytics program of Colgate-Palmolive has opened avenues for new revenue streams for the organization in Personal & Household Prods. industry. This can help Colgate-Palmolive to build a more holistic ecosystem for Colgate-Palmolive products in the Personal & Household Prods. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Colgate-Palmolive 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 Personal & Household Prods. industry.
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. Colgate-Palmolive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Colgate-Palmolive 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.
Threats Colgate-Palmolive External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Colgate-Palmolive are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Colgate-Palmolive in Personal & Household Prods. industry. The Personal & Household Prods. 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Colgate-Palmolive 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 Colgate-Palmolive prominent markets.
Stagnating economy with rate increase
– Colgate-Palmolive 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 Personal & Household Prods. industry.
Consumer confidence and its impact on Colgate-Palmolive 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 Personal & Household Prods. industry and other sectors.
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.
Easy access to finance
– Easy access to finance in Personal & Household Prods. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Colgate-Palmolive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Colgate-Palmolive 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 acceleration in Forth Industrial Revolution
– Colgate-Palmolive has witnessed rapid integration of technology during Covid-19 in the Personal & Household Prods. industry. As one of the leading players in the industry, Colgate-Palmolive needs to keep up with the evolution of technology in the Personal & Household Prods. sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Colgate-Palmolive needs to understand the core reasons impacting the Personal & Household Prods. industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal & Household Prods. industry are lowering. It can presents Colgate-Palmolive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal & Household Prods. sector.
Regulatory challenges
– Colgate-Palmolive 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 Personal & Household Prods. industry regulations.
Shortening product life cycle
– it is one of the major threat that Colgate-Palmolive is facing in Personal & Household Prods. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Colgate-Palmolive Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Colgate-Palmolive 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 Colgate-Palmolive 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 Colgate-Palmolive 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 Colgate-Palmolive 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 Colgate-Palmolive needs to make to build a sustainable competitive advantage.
