Case Study Description of Agero: Enhancing Capabilities for Customers
This case illustrates the importance of choosing a primary customer as the basis for organization design. Cross Country Group managers adjusted resource allocation, organization design and performance measures over time to transform Cross Country Group from an opportunistic family business into a sophisticated industry leader.Cross Country (renamed Agero in 2011) operated call centers that coordinated with thousands of small, independent towing companies-Cross Country's "service provider network"-to deliver roadside assistance services, such as vehicle towing and tire changes, to motorists covered by automakers' warranties and insurers' policies. The case describes Cross Country's evolution from 1972 to 2012 in three phases. This allows students to, at various stages, grapple with defining Cross Country's business (what business is it, and should it be, in?) and its primary customer (vehicle makers and insurers? motorists? service providers?). The answers to these questions have important implications for organization design. During the first phase, from 1972 to 1998, founder Sidney Wolk built the business through personal relationships with clients. A passionate entrepreneur, his approach to growth-secure customers first, figure out how to make money later-was remarkably successful, if sometimes chaotic. Facing an increasingly commoditized marketplace, in 1998 Wolk hired professional managers who implemented formal performance management systems and invested in sophisticated data analytics. From 1998 to 2007 (phase two), these investments allowed Cross Country to quantify service providers' impact on motorist satisfaction, monitor service providers' performance, and introduce programs to strengthen top-performing service providers' loyalty to Cross Country. Concurrently, the company undertook a two-step organization redesign to focus more resources on service providers (the new primary customer?), improve market-focused innovation and increase client satisfaction. In phase three, from 2008 to 2012, Cross Country entered the high-tech telematics/connected-vehicle business, invested in additional innovations to strengthen its service provider network, and rebranded itself as "Agero." Wolk and his team believed Cross Country had "more driver information than any other company." The case ends with key decisions for the future.
Swot Analysis of "Agero: Enhancing Capabilities for Customers" written by Robert L. Simons, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cross Agero facing as an external strategic factors. Some of the topics covered in Agero: Enhancing Capabilities for Customers case study are - Strategic Management Strategies, Customers, Design, Entrepreneurship, Financial analysis, Growth strategy, Organizational structure, Social responsibility, Strategy execution, Supply chain and Organizational Development.
Some of the macro environment factors that can be used to understand the Agero: Enhancing Capabilities for Customers casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Agero: Enhancing Capabilities for Customers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Agero: Enhancing Capabilities for Customers case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cross Agero, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cross Agero 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 Agero: Enhancing Capabilities for Customers can be done for the following purposes –
1. Strategic planning using facts provided in Agero: Enhancing Capabilities for Customers case study
2. Improving business portfolio management of Cross Agero
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cross Agero
Strengths Agero: Enhancing Capabilities for Customers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cross Agero in Agero: Enhancing Capabilities for Customers Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Cross Agero 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.
High brand equity
– Cross Agero has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cross Agero to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Cross Agero 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 industry. The technology infrastructure suggested by Robert L. Simons, Natalie Kindred can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Cross Agero is one of the most innovative firm in sector. Manager in Agero: Enhancing Capabilities for Customers Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Cross Agero has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Agero: Enhancing Capabilities for Customers Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Organizational Development field
– Cross Agero is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cross Agero in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Cross Agero is one of the leading recruiters in the industry. Managers in the Agero: Enhancing Capabilities for Customers are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Cross Agero has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Agero: Enhancing Capabilities for Customers - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Cross Agero in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Cross Agero digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cross Agero 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.
Learning organization
- Cross Agero 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 Cross Agero is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Agero: Enhancing Capabilities for Customers Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Cross Agero has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cross Agero 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.
Weaknesses Agero: Enhancing Capabilities for Customers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Agero: Enhancing Capabilities for Customers are -
Products dominated business model
– Even though Cross Agero has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Agero: Enhancing Capabilities for Customers should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Agero: Enhancing Capabilities for Customers, is just above the industry average. Cross Agero needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert L. Simons, Natalie Kindred suggests that, Cross Agero 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 industry.
Lack of clear differentiation of Cross Agero products
– To increase the profitability and margins on the products, Cross Agero needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Cross Agero, firm in the HBR case study Agero: Enhancing Capabilities for Customers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Agero: Enhancing Capabilities for Customers, in the dynamic environment Cross Agero has struggled to respond to the nimble upstart competition. Cross Agero 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, firm in the HBR case study Agero: Enhancing Capabilities for Customers has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cross Agero 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cross Agero is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Agero: Enhancing Capabilities for Customers can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Cross Agero 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.
Aligning sales with marketing
– It come across in the case study Agero: Enhancing Capabilities for Customers that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Agero: Enhancing Capabilities for Customers can leverage the sales team experience to cultivate customer relationships as Cross Agero is planning to shift buying processes online.
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 Cross Agero supply chain. Even after few cautionary changes mentioned in the HBR case study - Agero: Enhancing Capabilities for Customers, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cross Agero vulnerable to further global disruptions in South East Asia.
Opportunities Agero: Enhancing Capabilities for Customers | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Agero: Enhancing Capabilities for Customers are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cross Agero 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 Cross Agero to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Cross Agero can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Agero: Enhancing Capabilities for Customers suggest that firm 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cross Agero to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Cross Agero can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Cross Agero has opened avenues for new revenue streams for the organization in the industry. This can help Cross Agero to build a more holistic ecosystem as suggested in the Agero: Enhancing Capabilities for Customers case study. Cross Agero can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cross Agero in the consumer business. Now Cross Agero can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Cross Agero can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cross Agero can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Cross Agero 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.
Developing new processes and practices
– Cross Agero can develop new processes and procedures in Organizational Development 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cross Agero 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. Cross Agero 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.
Learning at scale
– Online learning technologies has now opened space for Cross Agero 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.
Using analytics as competitive advantage
– Cross Agero has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Agero: Enhancing Capabilities for Customers - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cross Agero to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Agero: Enhancing Capabilities for Customers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Agero: Enhancing Capabilities for Customers are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cross Agero can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cross Agero.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cross Agero with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Cross Agero
– 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 Cross Agero.
Regulatory challenges
– Cross Agero 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 Organizational Development industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Agero: Enhancing Capabilities for Customers, Cross Agero may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
High dependence on third party suppliers
– Cross Agero 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cross Agero business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cross Agero in the Organizational Development industry. The Organizational Development 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.
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. Cross Agero needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cross Agero 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 prominent markets illustrated in HBR case study Agero: Enhancing Capabilities for Customers .
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.
Weighted SWOT Analysis of Agero: Enhancing Capabilities for Customers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Agero: Enhancing Capabilities for Customers 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 the case study Agero: Enhancing Capabilities for Customers 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 the Harvard case study Agero: Enhancing Capabilities for Customers 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 Agero: Enhancing Capabilities for Customers is 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 Cross Agero needs to make to build a sustainable competitive advantage.