SWOT analysis is a strategic planning tool which is used in helping an organization to identify Strengths, Weaknesses, Opportunities, and Threats related to competition and in strategic planning. SWOT helps in situational assessment or situational analysis.

Like the 4 Ps of marketing (Product, Price, Place and Promotion) there are 5 Cs of marketing.   The 5 C’s stand for Company, Collaborators, Customers, Competitors, and Climate. These five elements help in performing situational analysis which is strategic process that helps in identifying opportunities and threats both internal and external to an organization. The 5 Cs also help product positioning which helps in reaching the target segment. 

Company

Strengths and weaknesses are internal factors. They are the areas on which organizations have some control over; they can be changed or modified little easily as they are internal. For examples weaker employees can be trained, can be mentored, if organization has patents and intellectual properties it enjoys an upper hand over competitors.  Location advantage is big strength of an organization.  However, opportunities and threats are external in nature. Companies can take advantage of opportunities and protect against threats, but they can’t change them. Examples include competitors’ pricing, prices of raw materials which depend largely on supplier cartel, and buyer behaviour trends.

Before analysing external factors, organizations need to look at internal factors. They need to look at areas in which they enjoy competitive edge over their competitors. If an organization maintains innovative company culture for example Apple whose success largely comes from their approach to innovation. The company continuously improve their existing products which eventually leads to ‘Creative Destruction’. The iPhone which is Apple’s most successful product came from mixing their existing products the iPod and iTunes and combining them with a phone and camera which resulted in a product unlike any other at the time. Apple’s iPhone created huge market disruption. Apple enjoys unique product knowledge, excellent efficiency and productivity among employees and it is too good in giving customer service that creates fantastic sales and happy customers.

Customer

Happy customers build the company brand. Positive brand reputation leads to higher growth. Reputation goes a long way in a business. It attracts customers, investors, partnerships, and employees. While seeking to improve reputation organizations must start with excellent customer service. Keeping current customers happy results in more stable revenue and more accurate predictions. Exceptional customer service is the unconditional commitment to giving the highest level of product or service to every person, regardless of the circumstances.

Today’s digital age is compelling organizations to relook at their customer-centricity promises. Companies struggle to get customer insights from other industries to match their offering. Organizations cannot rely on benchmarking from the industry they exist. For example, HDFC Bank mobile banking app was compared with the Ola app in terms of simplicity. Consumers are now accustomed to best-in-class user experiences both online and offline. A customer-centric organisational culture is no longer just a good thing rather it is a necessity for survival.

With Taj hotels is the best known for its customer service. Customer delight is present in every interaction with guests. The staff whether in housekeeping, at the restaurants, or room service all are very kind and at the service of their customers. Taj employees go out of their way to give the best hotel stay experience to their customers. So, rather than a customer service process, the customer service culture shines through.

Climate

The climate in the 5 Cs of marketing approach stands for external factors opportunities and threats of SWOT. It refers to the attitude of government and lending institutions towards business activity. It also includes the tax rate, inflation and attitude of labour unions towards the employers. Favourable business climates lower risks, reduce costs and connect companies to customers and quality workers. There is no one-size-fits-all approach to business climate change. Each company’s approach depends on its particular business model. Energy, Commodity, Financial, Technology sectors are most volatile industries.

Since past 2 years, sports utility vehicles (SUV) sector is performing well. India’s major automobile manufacturing companies includes Tata Motors, Ashok Leyland, Mahindra & Mahindra, Force Motors, Maruti, Toyota, Hyundai, Kia etc. The craze for SUVs is increasing day by day. At present that waiting periods for some of the most popular models are stretching to over two years, and fresh orders are still flowing in. Car buyers are now willing to spend more on their personal mode of travel and are preferring top-end cars. The SUV segment is enjoying a healthy business climate in India. The SUV segment’s contribution, which was around 19 per cent of the industry, has now gone up to 40 per cent in 2021-22.

Collaborators

In today’s business world, companies are usually deeply tangled, providing each other with services that are vital for day-to-day operations. Collaboration is when a group of people come together and contribute their expertise for the benefit of a shared objective, project, or mission. For example, if an organization needs to control its marketing efforts, it needs to map out entire supply chain, listing all of the third-party distributors, suppliers, partners and contractors. The reason collaborators must be a part of the 5 C analysis is that collaborations create synergy.

Last year Sabyasachi the famous women designer Indian clothing collaborated with H&M global brand. For Sabyasachi Mukherjee also it is a first with a high-street retailer. He has collaborated successfully before with French Shoe Designer Christian Louboutin and New York-based luxury department store, Bergdorf Goodman. Sabyasachi has dedicated a lot of attention to online interactions with consumers and is aware that online interaction with consumers can increase the position of the brand in the market. #SabyasachiSaree is a trend that never goes out of fashion in India. This, he has used to an advantage. It is for the first time that H&M have had a saree in their collection. Being the second largest clothing retailer in the world, it is present in 74 countries with over 5,000 stores under the various company brands, and the saree has never before featured as fast fashion. Imagine, if the trend takes off, this would be what saree enthusiasts only dream of. Sabyasachi’s collaboration with H&M has deepened Sabyasachi’s global market share.

Collaboration leads to more innovation, efficient processes, increased success, and improved communication. Collaboration helps in increasing strengths of a company.

Competitors

No business operates in a vacuum. Whether its sole proprietor shop or a or a large company, a product is always being judged in comparison that provides the same value. Healthy market competition is fundamental to a well-functioning economy. Basic economic theory says that when firms have to compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation. Competition is critical not only in product markets, but also in labour markets. When firms compete to attract good employees, they must increase compensation and improve working conditions.  Firms grow when they are grounded and they spend sufficiently on market intelligence. Competition is an important C in the 5 Cs model. 

The detergent market in India can be divided into premium (Surf, Ariel), mid-price (Rin, Henko, Tide) and popular segments (Ghadi, Wheel, Nirma, Mr. White). Regional and small unorganized players still account for the 40% market. Per-capita consumption of detergent in India at 2.7 kg is the lowest in the world.

In 1987, Ghadi was launched by RSPL (Rohit Surfactancts Pvt. Ltd.), the product was also less priced and targeted at the rural customers, middle class and lower-middle class customers. It also had more or less the same positioning strategy as Nirma. In 1988, HUL launched Wheel to take on Nirma. In early 2000’s Wheel beats Nirma and takes the No.1 spot. In late 2011 and early 2012, Ghari beats Wheel and takes the number one spot in Indian detergent industry. These detergent brands fought with each other on the basis of price.  Competition reduces prices which helps people from lower income strata to buy products.

World Has Become Volatile: Volatility is ever increasing.  Brexit is a good example of VUCA world. Britain’s exit from the European Union took the world by surprise. A consequence of this political factor has affected economics, commerce, regulatory system and emotional perception of people at large. The British leaves alone isolated from their major trading partners, i.e the Euro Zone. That is surely not a healthy thing for world trade. The real shocks are yet to be faced. After Brexit, political and security effects would be more important to the US. The potential economic gains and losses for the U.S in Brexit are small, apart from the TTIP-like arrangement which would result in substantial economic gains for the US. The US will miss the influence and global perspective that the UK brings to the EU decision-making process, particularly around foreign policy, security and defence. TTIP (T-Tip) is a planned agreement focused on lowering trade tariffs and removing costly regulations on business across the Atlantic. These barriers include labour rights, food safety rules and banking safeguards put into place following the recession.

Syria’s war shows no sign of stopping. Syria can be described as several interconnected wars. It’s not the government-versus-rebels narrative it started out as in 2011. In the last few weeks, the proxy conflicts between Israel and Iran and Turkey and the Kurds have heated up in particular.

US’s pressure on Turkey to deal with Isis will actually make Turkey more vulnerable to attack from the terrorist group.  Brazil is unable to address its growing fiscal deficit, the war between North Korea and South Korea, the political instability in many parts of world has increased the volatility in world.  The geographical, political, ecological, economical changes are too much of burden on the business organizations.

Uncertainty everywhere: Uncertainty is linked to volatility. Business organizations are reworking on their decision making frameworks in which decisions can be executed. Management techniques were always based on assumptions about the future and the use of planning is a major tool of management control. Change is constant, products are living a shorter life span, to top it all, political and economical events are spinning the decision making of business managers like never before. Planning, budgeting and control methods lead to never-ending discussions in company board rooms; it just doesn’t reach any logical conclusion. Once again, just look at Brexit again. Everyone knew that the “leave” decision of voters had a 50% chance of occurrence but a few hours later the consequences of it were nevertheless still hard to predict.

Mergers, acquisitions and takeovers have reached a peak globally because firms are seeking to reposition themselves and protect profitability in the face of shifting customer demands, rising regulation and the need to embrace technology.

Complexities are only mounting: Globalisation has pushed the boundaries of doing business, which has only created a wide gap between developed and underdeveloped markets, increasing the competition from new entrants. Globalization has put pressure on businesses of all sizes to tap international customer base. From a technology point of view, s businesses need to review all processes and see how their legacy and systems can cope with training of staff, multi-lingual customers, foreign compliance and a whole host of other intricate and very time-consuming changes. The biggest fact today is the start-ups are giving competition to established businesses in many sectors, the bigger and established players are dumbfound due to ac of creativity and innovation. Organizations today need 24X7 innovative pool of employees, those who can just keep innovation pumping at all levels of business. And, another fact is however innovative people get information technology takes its own time to change. This means that businesses have become too reliant on their expensive legacy systems, restricting innovation as a result.

Ambiguity cannot be wiped out: Too much of information keeps pouring in from everywhere, and the media keeps people on their heels. Customers are having large information, they are confused about what to buy, how to buy, from where to buy, at what price to buy….  Everything has become complex: pricing, operations, R&D, firm’s infrastructure, supply chains, customers’ behaviors, big data systems, economic models, finances everything is challenging. Due to random organizational structures, the authority and responsibility lines grow blurred, which creates a big leadership challenge. Due to blurring responsibilities of managers, internal complexities keep growing in organization. Employees get busy playing the blame game and politicising the work atmosphere. The same is with Governments, blurring responsibilities gives way to non transparency in systems. Globalization has paved way for a growing number of multi-channels with customers, each with their own set of priorities and responsibilities. At the Government level, organizational level, channels level and customer level haziness exists.

Conclusion: One of the main challenges of today’s business scenario is to accommodate inconsistencies in (PESTLE) Political, Economical, Social, Technological, Legal and Environmental constituents. The complexity of today, demands managers to act by taking into account the complete picture, they should understand that pure statistical data cannot suffice for decision making. They should get ready for implications when wrong decisions are made, volatility and ambiguity in markets can lead in making wrong decisions. They should learn to accommodate the extremes; the dichotomy of good, bad, right, wrong desirable and undesirable does not exist any longer.

On a personal level employees must be tolerant to ambiguity and volatility by taking care of their mental and physical health, they must practice critical thinking and risk acceptance. VUCA World is here to stay.