SWOT Analysis / TOWS Matrix for Reckitt Benckiser (United Kingdom)
Based on various researches at Oak Spring University , Reckitt Benckiser is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , wage bills are increasing, technology disruption, talent flight as more people leaving formal jobs,
there is backlash against globalization, increasing energy prices, etc
Introduction to SWOT Analysis of Reckitt Benckiser
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Reckitt Benckiser can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reckitt Benckiser, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reckitt Benckiser 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 Reckitt Benckiser can be done for the following purposes –
1. Strategic planning of Reckitt Benckiser
2. Improving business portfolio management of Reckitt Benckiser
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Reckitt Benckiser
Strengths of Reckitt Benckiser | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reckitt Benckiser are -
Successful track record of launching new products
– Reckitt Benckiser has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Reckitt Benckiser 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.
Cross disciplinary teams
– Horizontal connected teams at the Reckitt Benckiser 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.
Ability to recruit top talent
– Reckitt Benckiser is one of the leading players in the Personal & Household Prods. industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Reckitt Benckiser 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.
Effective Research and Development (R&D)
– Reckitt Benckiser has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Reckitt Benckiser staying ahead in the Personal & Household Prods. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Reckitt Benckiser has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reckitt Benckiser to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Personal & Household Prods. industry
– Reckitt Benckiser is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Reckitt Benckiser 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 Personal & Household Prods. industry. The technology infrastructure of United Kingdom is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Reckitt Benckiser 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 Reckitt Benckiser is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Reckitt Benckiser emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Reckitt Benckiser in the Consumer/Non-Cyclical sector have low bargaining power. Reckitt Benckiser has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Reckitt Benckiser to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Reckitt Benckiser in Personal & Household Prods. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Reckitt Benckiser digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Reckitt Benckiser 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.
Weaknesses of Reckitt Benckiser | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reckitt Benckiser are -
Skills based hiring in Personal & Household Prods. industry
– The stress on hiring functional specialists at Reckitt Benckiser 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.
Capital Spending Reduction
– Even during the low interest decade, Reckitt Benckiser 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.
Ability to respond to the competition
– As the decision making is very deliberative at Reckitt Benckiser, in the dynamic environment of Personal & Household Prods. industry it has struggled to respond to the nimble upstart competition. Reckitt Benckiser has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Reckitt Benckiser is dominated by functional specialists. It is not different from other players in the Personal & Household Prods. industry, but Reckitt Benckiser needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reckitt Benckiser to focus more on services in the Personal & Household Prods. industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Reckitt Benckiser needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal & Household Prods. industry have deep experience in developing customer relationships. Marketing department at Reckitt Benckiser can leverage the sales team experience to cultivate customer relationships as Reckitt Benckiser is planning to shift buying processes online.
High dependence on Reckitt Benckiser ‘s star products
– The top 2 products and services of Reckitt Benckiser 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 Reckitt Benckiser has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Reckitt Benckiser 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.
High cash cycle compare to competitors
Reckitt Benckiser has a high cash cycle compare to other players in the Personal & Household Prods. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Reckitt Benckiser supply chain. Even after few cautionary changes, Reckitt Benckiser is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Reckitt Benckiser vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Reckitt Benckiser has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners in Personal & Household Prods. industry
– because of the regulatory requirements in United Kingdom, Reckitt Benckiser 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 Personal & Household Prods. industry.
Reckitt Benckiser Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Reckitt Benckiser 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, Reckitt Benckiser can use these opportunities to build new business models that can help the communities that Reckitt Benckiser operates in. Secondly it can use opportunities from government spending in Personal & Household Prods. sector.
Buying journey improvements
– Reckitt Benckiser can improve the customer journey of consumers in the Personal & Household Prods. industry by using analytics and artificial intelligence. It 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.
Developing new processes and practices
– Reckitt Benckiser can develop new processes and procedures in Personal & Household Prods. 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.
Learning at scale
– Online learning technologies has now opened space for Reckitt Benckiser 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.
Loyalty marketing
– Reckitt Benckiser 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reckitt Benckiser can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Reckitt Benckiser 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Reckitt Benckiser 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 Reckitt Benckiser to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Reckitt Benckiser has opened avenues for new revenue streams for the organization in Personal & Household Prods. industry. This can help Reckitt Benckiser to build a more holistic ecosystem for Reckitt Benckiser 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 Reckitt Benckiser 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reckitt Benckiser 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Reckitt Benckiser 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.
Using analytics as competitive advantage
– Reckitt Benckiser has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal & Household Prods. sector. This continuous investment in analytics has enabled Reckitt Benckiser to build a competitive advantage using analytics. The analytics driven competitive advantage can help Reckitt Benckiser to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Reckitt Benckiser External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Reckitt Benckiser are -
Regulatory challenges
– Reckitt Benckiser 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.
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. Reckitt Benckiser can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Reckitt Benckiser 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.
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. Reckitt Benckiser 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal & Household Prods. industry are lowering. It can presents Reckitt Benckiser 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.
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. Reckitt Benckiser needs to understand the core reasons impacting the Personal & Household Prods. industry. This will help it in building a better workplace.
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.
Technology acceleration in Forth Industrial Revolution
– Reckitt Benckiser has witnessed rapid integration of technology during Covid-19 in the Personal & Household Prods. industry. As one of the leading players in the industry, Reckitt Benckiser 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.
High dependence on third party suppliers
– Reckitt Benckiser 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.
Increasing wage structure of Reckitt Benckiser
– 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 Reckitt Benckiser.
Shortening product life cycle
– it is one of the major threat that Reckitt Benckiser is facing in Personal & Household Prods. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reckitt Benckiser 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 Reckitt Benckiser prominent markets.
Environmental challenges
– Reckitt Benckiser 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. Reckitt Benckiser can take advantage of this fund but it will also bring new competitors in the Personal & Household Prods. industry.
Weighted SWOT Analysis of Reckitt Benckiser Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Reckitt Benckiser 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 Reckitt Benckiser 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 Reckitt Benckiser 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 Reckitt Benckiser 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 Reckitt Benckiser needs to make to build a sustainable competitive advantage.
