Colgate-Palmolive SWOT and PESTLE Analysis

Strength

1. Strong Engagement: Engaging customers is the key ingredient in the growth strategy for Colgate-Palmolive. The company is strengthening its engagement through digital media and it accounts for 20%-25% of the working media expenditure. The company knows it well through its research that emotional connection with the consumers has a strong impact on them. One of the examples of a social media video campaign is the Tom’s of Maine brands in the U.S. In this campaign, women shared a video of why and when they decided to switch to Tom’s natural deodorant. This led to increase in the sales of Tom’s of Marine brand by 12% in 2016.

2. Strong Popular Brands: The Company has internationally recognized brands and did worldwide net sales of 47%, 20%, 18% and 15% in oral care, personal care, home care and pet nutrition respectively by the end of 2016.Colgate is a market leader in many product categories of personal care. It is a global leader in liquid hand soap which it sells under the Softsoap, Palmolive and Protex brands.

3. Innovation for Growth: The Company invests in innovations to identify how well they can serve the needs of the customers from different geographies and culture. They launched Colgate Naturals toothpaste with twin lotus flower in China and Colgate CibacaVedshakti toothpaste in India, knowing that a section of consumers value the natural ingredients.

4. Strong Research and development: Colgate-Palmolive has a state-of-the-art research and development centre in New Jersey. The company spent $289million in 2016, higher than the previous two years. The Colgate Technology centre with a team of more than 200 scientists, engineers and clinicians is committed to improve oral health with advance-edge technologies. It also has laboratories, on-site consumer testing site where visitors from the areas of different geographies and dentistry meet the scientists. They discuss products, experience, needs and technologies to improve the oral health and quality of life of the patients.

Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

1. Engagement using new technologies: With the use of technology, the company can address the changing needs of consumers. The company conducted its first virtual dental conference in 2016. This included virtual networking, live chats and sessions branded as #ColgateTalks. This event lasted for duration of 4 months where over 1600 dental professionals attended the event and more than 16,000 professionals visited the virtual conference website. Building the customer-connect in this fashion incurs low cost and is an effective tool for engaging them.

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Legal

1. Regulatory and Legal requirements: The legal challenges related to price control, profit control, labour laws, trade restrictions etc. have a significant impact on the business. The regulators like U.S. Food and Drug Administration, the Environment Protection Agency, the Consumer Product Safety Commission, the Federal Trade Commission monitor different facets of the business. The use of “Triclosan” an ingredient used in Colgate Total Toothpaste is not permitted in U.S, as of September 2017, considering the environmental and human risks.

2. Non-compliance of the laws: If the company is found violating the laws then they will be subjected to civil remedies, which include fines, criminal sanctions and damages. The company will come in negative publicity and this will affect the brand image and reputation of the company adversely, ultimately affecting its business profitability. The company may incur huge losses and pending cases in the courts which is not feasible for its growth and sustainability.

Environmental

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