TNK-BP Tread with Caution Case Solution

1. Introduction

This case study presents a detailed strategic analysis of TNK-BP Tread with Caution. The case analysis covers key managerial and strategic issues that TNK-BP Tread with Caution is currently facing due to challenging internal and external environments. The case solution first conducts the strategic analysis by applying the relevant strategic management tools and frameworks, and then presents strategic recommendations based on overall analysis (Hamilton and Webster, 2018).

The case offers a holistic view of TNK-BP Tread with Caution business environment. Case findings are relevant for all key stakeholders of TNK-BP Tread with Caution. Reader should first read the case on TNK-BP Tread with Caution, and then read the analysis.

2. External environmental analysis of TNK-BP Tread with Caution

The external business environment comprises political, economic, social, technological, legal and environmental factors that influence the strategic positioning of TNK-BP Tread with Caution (Khalid and Rahman, 2019).

Here are key external environment characteristics:

External environmental forces are dynamic and uncontrollable

External environment can directly influence the TNK-BP Tread with Caution strategic positioning

External environment requires continuous monitoring to timely identify the potential threats and opportunities (Shtal et al. 2018).

2.1. PESTLE analysis of TNK-BP Tread with Caution

2.1.1. Political

The TNK-BP Tread with Caution must carefully examine the potential impact of global political unrest on its business operations

The TNK-BP Tread with Caution should actively monitor, and respond to the changes to legislation

The TNK-BP Tread with Caution should analyze how taxation policies can influence its profitability in different countries where the company is currently present (Khalid and Rahman, 2019).

2.1.2. Economic

Rising GDP and growing consumer spending can help TNK-BP Tread with Caution in business expansion

Increasing interest rates can increase the debt cost for TNK-BP Tread with Caution.

Reducing inflation can decrease the production cost of TNK-BP Tread with Caution and increase profitability by driving up the sales revenue (Begley et al. 2005).

2.1.3. Social

The aging population can affect the TNK-BP Tread with Caution brand positioning, as TNK-BP Tread with Caution currently targets young people.

Growing preferences for luxury items, and improving lifestyles can create more demand for TNK-BP Tread with Caution premium-priced products (Perera, 2017).

2.1.4. Technological

Government is granting more technology incentives to fuel the innovation. It can help TNK-BP Tread with Caution achieve its innovation objectives.

Emerging automation trends require TNK-BP Tread with Caution to revisit its business model, and enhance process efficiency.

Improving technological infrastructure can enable TNK-BP Tread with Caution to resolve its supply chain inefficiencies (Shtal et al. 2018).

2.1.5. Environmental

The stringent environmental regulations require TNK-BP Tread with Caution to ensure strict compliance with environmental standards.

Consumers’ growing environmental consciousness provides an opportunity to TNK-BP Tread with Caution to launch more green, environment-friendly products.

TNK-BP Tread with Caution should incorporate environmental thinking in its strategic decision-making process to position itself as a socially responsible organization (Moser, 2015).

2.1.6. Legal

The TNK-BP Tread with Caution should take strict measures to avoid discrimination at the workplace.

The TNK-BP Tread with Caution must abide by the consumer data privacy laws to avoid reputation-damaging lawsuits

The TNK-BP Tread with Caution must also ensure strict implementation of workplace safety standards to comply with the health and safety regulations (Khalid and Rahman, 2019).

2.2. Porter five forces of TNK-BP Tread with Caution

2.2.1. Bargaining power of suppliers

The growing number of suppliers is weakening their bargaining power against TNK-BP Tread with Caution (Dobbs, 2014).

TNK-BP Tread with Caution has a wide supplier network, which strengthens its negotiation ability.

Low product differentiation further reduces the supplier bargaining power, as TNK-BP Tread with Caution can easily switch to suppliers that offer better terms and conditions (Dobbs, 2014).

Overall, the bargaining power of suppliers for TNK-BP Tread with Caution is low.

2.2.2. Bargaining power of buyers

There are a small number of buyers that buy in large quantities. It enhances their bargaining power against TNK-BP Tread with Caution (Cho et al. 2019).

Buyers are price insensitive, and cannot easily switch to other companies due to economic and psychological switching costs. It reduces their bargaining power against TNK-BP Tread with Caution.

High product differentiation further discourages the buyers from switching to competitors (Dobbs, 2014).

Overall, the bargaining power of buyers is moderate-to-low for TNK-BP Tread with Caution.

2.2.3. Threat of new entrants

High entry barriers make it difficult for new entrants to enter in the market

The high initial capital expenditure also erects an entry barrier for new firms

TNK-BP Tread with Caution has a loyal customer base, which further reduces the risk of customers switching to new entrants (Grundy, 2006).

Overall, threat of new entrants for TNK-BP Tread with Caution is low.

2.2.4. Threat of substitutes

The emerging innovative technologies are increasing the threat of substitutes for TNK-BP Tread with Caution

Growing threat of substitutes is compelling TNK-BP Tread with Caution to continuously improve product quality (Bruijl and Gerard, 2018).

Changing consumer demographics and their growing tech-savvy nature is further increasing the substitute threat for TNK-BP Tread with Caution

However, the brand loyalty increases the psychological switching costs, which somehow reduces the substitute threat (Dobbs, 2014).

Overall, the substitute threat for TNK-BP Tread with Caution is moderate to high.

2.2.5. Industry rivalry

The competition among existing market players is intense

The market is mature, and is approaching saturation point, which further intensifies the industry rivalry

However, high-quality differences and brand loyalty deters the customers from switching to competitors (Dobbs, 2014).

Overall, the industry rivalry is moderate to high, which makes the business environment challenging for TNK-BP Tread with Caution.

3. Company level analysis of TNK-BP Tread with Caution

Up till now, the case study presented a holistic environmental and industry-level analysis. This section now presents the TNK-BP Tread with Caution level analysis by applying relevant tools and frameworks.

3.1. SWOT of TNK-BP Tread with Caution

SWOT is a strategic management framework that helps TNK-BP Tread with Caution in understanding its core strengths and weaknesses. Framework also identifies opportunities and threats that reside in TNK-BP Tread with Caution’s external business environment (Helms and Nixon, 2010).

3.1.1. Strengths

The TNK-BP Tread with Caution holds a market leadership position, and has highest market share.

The TNK-BP Tread with Caution has high customer loyalty, which makes it difficult for competitors to attract its customers.

The TNK-BP Tread with Caution has strong financial health, which allows the company to spend heavily on R&D, and fuel the innovation (Sarsby, 2016).

The TNK-BP Tread with Caution has successfully positioned itself as a responsible corporate citizen.

The TNK-BP Tread with Caution has a wide supplier and distribution network, which helps in the business expansion (Valentin, 2001).

3.1.2. Weaknesses

The TNK-BP Tread with Caution currently has a high employee turnover rate.

The TNK-BP Tread with Caution is facing supply chain inefficiencies, which are lowering the organizational productivity (Madsen, 2016).

The TNK-BP Tread with Caution is unable to quickly resolve the customer complaints, which causes customer dissatisfaction (Helms and Nixon, 2010).

The hierarchal structure of TNK-BP Tread with Caution causes resistance to change.

3.1.3. Opportunities

TNK-BP Tread with Caution can invest on emerging automation and artificial intelligence technologies to improve the process efficiency

TNK-BP Tread with Caution can accelerate the green product development, and invest on green marketing efforts to capture the attention of environment-conscious customers (Solaiman et al. 2015).

TNK-BP Tread with Caution can invest on an online influence marketing strategy to expand the reach to a young population

TNK-BP Tread with Caution can find strategic partners around the globe to achieve its expansion objectives (Sarsby, 2016).

3.1.4. Threats

The growing industry competition among existing players and thinning profit margins has become a major threat for TNK-BP Tread with Caution

Global political unrest can negatively affect the TNK-BP Tread with Caution performance at the international stage

The expanding grey market and the influx of replica goods can negatively affect the TNK-BP Tread with Caution revenue (Davidson et al. 2019).

Aging population can threaten the TNK-BP Tread with Caution survival that, primarily focuses on young customers

After presenting the SWOT analysis, the next framework analyzing the TNK-BP Tread with Caution’s marketing mix strategies.

3.2. Marketing mix of TNK-BP Tread with Caution

3.2.1. Product

TNK-BP Tread with Caution offers a wide product variety that meets the needs of diverse customers

TNK-BP Tread with Caution has consistently maintained high product quality to justify premium prices

TNK-BP Tread with Caution invests heavily on the quality improvement and management to meet the customers’ product quality expectations (Singh, 2012).

TNK-BP Tread with Caution invests on innovative marketing and communication strategies to set a clear product positioning, and communicate how its products are different from competitors.

TNK-BP Tread with Caution offers warranties and after-sale services that enhances the overall customer experience (Ferrell et al. 2021).

3.2.2. Price

TNK-BP Tread with Caution adopts a premium pricing strategy, which is aligned with the company’s premium brand image.

TNK-BP Tread with Caution avoids offering price discounts to maintain brand exclusivity (Baines et al. 2017).

TNK-BP Tread with Caution does not charge any hidden prices, and has integrated transparency in its pricing model

TNK-BP Tread with Caution also offers value-added elements, and adopts a bundle pricing strategy to boost the sales (Giri et al. 2020).

TNK-BP Tread with Caution offers credit payment options for the customer convenience.

Key factors that TNK-BP Tread with Caution considers while setting the prices include- brand image, customers’ expectations and purchase capacity, and on-going competition.

3.2.3. Place

TNK-BP Tread with Caution adopts a selective distribution strategy to reach the target market

The TNK-BP Tread with Caution chooses distributors who are located in urban areas, and can preserve the premium brand image

Currently, TNK-BP Tread with Caution has a distribution network that is spread in more than 50 countries

TNK-BP Tread with Caution has adopted Omni-channel strategy, and sells its products through multiple online and offline channels, including- official outlets, authorized distributors, the company website and mobile application (Palmatier et al. 2016).

Well-integrated Omni-channel strategy offers a seamless experience to the TNK-BP Tread with Caution customers.

3.2.4. Promotion

TNK-BP Tread with Caution avoids offering promotional discounts to preserve the brand exclusivity.

TNK-BP Tread with Caution invests heavily on the celebrity endorsement strategies to promote the brand among the target market.

TNK-BP Tread with Caution also have a strong social media presence, and specifically focuses on the online influencer marketing strategy to create brand awareness (Varadarajan et al. 2010).

TNK-BP Tread with Caution uses both- online and offline marketing and communication channels to promote the brand.

TNK-BP Tread with Caution’s promotional strategy is well-aligned with other marketing mix components to develop a clear brand positioning (Palmatier et al. 2016).

3.3. VRIO of TNK-BP Tread with Caution

3.3.1. Valuable

The TNK-BP Tread with Caution has a wide distribution network that is spread across the globe.

The TNK-BP Tread with Caution has extensive research and development capabilities that fuel the innovation process.

The TNK-BP Tread with Caution offers a seamless customer experience through a well-integrated marketing mix.

The TNK-BP Tread with Caution has strong financial health, and free cash flow that it can invest on innovative projects.

The TNK-BP Tread with Caution has a strong presence over social media that drives the customer engagement, and increases the company’s reach to the target market.

The TNK-BP Tread with Caution has successfully attracted and retained highly skilled staff that drives the overall organizational productivity, and helps the company in achieving its innovation objectives (Cardeal and Antonio, 2012).

3.3.2. Rare

TNK-BP Tread with Caution has built strong relationships with suppliers that enable the company to achieve production objectives even when there is a material shortage in the market

TNK-BP Tread with Caution has access to the rare and hard-to-reach raw material that is used to produce top-quality products (Cardeal and Antonio, 2012).

TNK-BP Tread with Caution has successfully developed a strong brand reputation that keeps customers hooked with the brand

TNK-BP Tread with Caution shares a strong emotional connection with its customers, which increases the psychological switching costs for them (Hernández and Garcia, 2018).

TNK-BP Tread with Caution has developed its image as an environment-friendly, sustainable, and responsible brand that takes care of all stakeholders.

3.3.3. Inimitable

TNK-BP Tread with Caution has developed an in-depth knowledge of customers’ intrinsic motivational needs, and has developed its brand image in a way that shares close relatedness with customers’ desired self-image (Liu et al. 2012).

TNK-BP Tread with Caution has secured exclusive agreements with the suppliers to get access to unique raw materials. The exclusive agreement makes this resource inimitable for TNK-BP Tread with Caution

TNK-BP Tread with Caution has strong transformational and charismatic top leadership that has always successfully led the organization through a crisis (Nusari et al. 2018).

TNK-BP Tread with Caution has developed a robust organizational culture that promotes cohesion, and strengthens the employees’ affective commitment with the organization.

3.3.4. Organized

TNK-BP Tread with Caution has secured the access to human capital (skills and expertise) that is needed to exploit the above-mentioned resources.

TNK-BP Tread with Caution has a well-developed technical infrastructure that supports the business operations, and fuels the innovation process.

TNK-BP Tread with Caution has built extensive expertise, and gained years of experience that helps the company in leveraging its core strengths to exploit the available opportunities.

TNK-BP Tread with Caution has built strategic partnerships that help the company in pooling the resources together to gain a strong competitive edge over rivals (Cardeal and Antonio, 2012).

3.4. BCG of TNK-BP Tread with Caution

3.4.1. Stars

The core products of the TNK-BP Tread with Caution fall in the star category. TNK-BP Tread with Caution has secured market leadership in these categories

TNK-BP Tread with Caution’s market share in these product categories is growing due to high market growth potential

TNK-BP Tread with Caution should pay specific attention to these product categories, and should try to preserve the market share

The intensifying competition imposes a threat to the TNK-BP Tread with Caution’s market leadership in the ‘Star’ category

Overall, TNK-BP Tread with Caution should increase investment on the star category to maintain leadership in the growing market (Mohajan, 2017).

3.4.2. Cash cows

TNK-BP Tread with Caution has several product categories in which the firm has attained the market leadership position.

However, the market growth in these product categories has become slowed with time, as the market has become mature.

TNK-BP Tread with Caution should ‘milk’ these product categories as they are an important source of cash flow.

However, TNK-BP Tread with Caution should avoid increasing investment due to slowed market growth, and should bring innovation to keep adding new features.

Overall, TNK-BP Tread with Caution should aim to maintain the current market position, but avoid increasing the investment due to slow market growth (Kader and Hossain, 2020).

3.4.3. Question marks

TNK-BP Tread with Caution has some product categories that are in a growing market segment. Despite high market growth, TNK-BP Tread with Caution is unable to increase the market share in these segments.

The products under this category have the potential to become stars, as they operate in a high-growth market.

But, extensive investment is needed to understand the reasons behind the low market share, and it can affect the cash flow of TNK-BP Tread with Caution.

Therefore, TNK-BP Tread with Caution needs to evaluate if it is feasible to increase the investment to drive the market share, or it is wise to divest from this market segment (Mohajan, 2017).

3.4.4. Dogs

TNK-BP Tread with Caution has one product that operates in a market with low growth potential

TNK-BP Tread with Caution has only a marginal share in this market.

As growth in this market is stagnant, and market share is also marginal, TNK-BP Tread with Caution may consider divesting from this market segment.

It will be unwise to invest in this segment, as this product has turned into ‘dog’, which means the product is aged and waning.

Here, two options are available to TNK-BP Tread with Caution:

o First, TNK-BP Tread with Caution may entirely refresh the dying product.

o Alternatively, TNK-BP Tread with Caution may divest this product from the portfolio.

Considering the current business environment, and competitive dynamics, TNK-BP Tread with Caution is recommended to get rid of this product by taking divestment decisions (Torquati et al. 2018).

3.5. Ansoff matrix of TNK-BP Tread with Caution

TNK-BP Tread with Caution aims to expand its business operations to strengthen the competitive positioning in the market. Ansoff matrix here can help TNK-BP Tread with Caution in taking the right business expansion decision.

Four business expansion strategies available to TNK-BP Tread with Caution are- market penetration, market expansion, product development, and diversification (Loredana, 2016).

Choosing the right expansion strategy is important for TNK-BP Tread with Caution to achieve its expansion objectives.

3.5.1. Market penetration

TNK-BP Tread with Caution can penetrate into existing markets by expanding the market reach. This strategy is recommended when the market has high growth potential.

TNK-BP Tread with Caution can expand the market reach by increasing the customer loyalty, and encouraging them to increase the spending.

TNK-BP Tread with Caution can use the influencer marketing strategy as a tool to create e-WOM. It will create brand awareness, spread the brand message, and enable TNK-BP Tread with Caution to penetrate deeper into the market.

Some other ways through which TNK-BP Tread with Caution can penetrate into the market is- to increase the marketing and promotional budget, making price adjustments, and improving the product quality to gain a larger share from the existing market (Shaw, 2012).

3.5.2. Market development

TNK-BP Tread with Caution can find new geographic markets to launch its existing products

Another way to pursue this expansion strategy is through celebrity endorsements. Celebrities can help TNK-BP Tread with Caution in finding new customers for existing products

TNK-BP Tread with Caution can also consider adding new product dimensions, or revising the packaging to reach new consumer markets.

Another way to pursue this expansion strategy is by exploring new distribution channels. TNK-BP Tread with Caution can strengthen its presence on e-commerce, and open multiple online sales channels to reach new customer markets (Hussain et al. 2013).

TNK-BP Tread with Caution can also charge two different prices to expand the reach from high-end to middle-class customers.

3.5.3. Product development

TNK-BP Tread with Caution can expand its business operations by pursuing a product development strategy.

Instead of adopting a reactive attitude by coping with the competitors, TNK-BP Tread with Caution must proactively behave while launching new products. Some possible proactive product development strategies are discussed below.

To pursue a proactive product development strategy, TNK-BP Tread with Caution may increase investment on research and development activities to bring the product innovation.

TNK-BP Tread with Caution may also invest on the market research to identify and respond to the unmet customer needs (Katsikeas et al. 2016).

TNK-BP Tread with Caution may consider strategic alliance and partnership options to launch new products. It will enable the company to pool the resources and capabilities together, and share risks while launching new products.

Acquisition of smaller firms can also enable TNK-BP Tread with Caution to successfully launch new products in the comparatively shorter time span.

3.5.4. Diversification

TNK-BP Tread with Caution can adopt the diversification strategy to reach new markets through new products.

TNK-BP Tread with Caution can pursue either a related or unrelated diversification strategy.

The related diversification strategy requires TNK-BP Tread with Caution to enter in similar markets. But, unrelated diversification requires TNK-BP Tread with Caution to find entirely new markets (Dhir and Dhir, 2015).

Unrelated diversification is riskier, and can affect the brand image. So, TNK-BP Tread with Caution should pursue a related diversification strategy.

By pursuing related diversification, TNK-BP Tread with Caution can horizontally and vertically add new product lines

Through successful diversification, TNK-BP Tread with Caution can increase its profitability, and generate more revenue from the new products and new market segments (Loredana, 2016).

4. Conclusion

The in-depth strategic analysis of TNK-BP Tread with Caution reveals some interesting insights. TNK-BP Tread with Caution currently holds strong competitive positioning. However, the challenging business environment and intensifying competition require TNK-BP Tread with Caution to adopt a proactive behavior. TNK-BP Tread with Caution needs to continuously assess its external and internal business environment to timely identify the potential threats and opportunities. Here, the application of relevant strategic management tools and frameworks can help TNK-BP Tread with Caution in making wise business decisions. The key to success in a such challenging and complex business environment is- to proactively respond to the external environment by leveraging core strengths, and overcoming the weaknesses.