Making stickK Stick: The Business of Behavioral Economics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Making stickK Stick: The Business of Behavioral Economics
stickK.com, a website that uses behavioral economics to help users achieve their goals, must choose between a direct-to-consumer or business-to-business model. The case includes a discussion of how principles of behavioral economics can be used to influence behavior, and how an understanding of behavioral economics can inform managerial decisions about product adoption and diffusion.
Authors :: Leslie K. John, Michael I. Norton, Michael Norris
Swot Analysis of "Making stickK Stick: The Business of Behavioral Economics" written by Leslie K. John, Michael I. Norton, Michael Norris includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Behavioral Economics facing as an external strategic factors. Some of the topics covered in Making stickK Stick: The Business of Behavioral Economics case study are - Strategic Management Strategies, Customers, Entrepreneurship, Health, Internet, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Making stickK Stick: The Business of Behavioral Economics casestudy better are - – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
Introduction to SWOT Analysis of Making stickK Stick: The Business of Behavioral Economics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Making stickK Stick: The Business of Behavioral Economics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Behavioral Economics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics can be done for the following purposes –
1. Strategic planning using facts provided in Making stickK Stick: The Business of Behavioral Economics case study
2. Improving business portfolio management of Behavioral Economics
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Behavioral Economics
Strengths Making stickK Stick: The Business of Behavioral Economics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Behavioral Economics in Making stickK Stick: The Business of Behavioral Economics Harvard Business Review case study are -
Strong track record of project management
– Behavioral Economics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Behavioral Economics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Behavioral Economics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Sales & Marketing industry
– Making stickK Stick: The Business of Behavioral Economics firm has clearly differentiated products in the market place. This has enabled Behavioral Economics to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Behavioral Economics to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Behavioral Economics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Behavioral Economics 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.
Training and development
– Behavioral Economics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Making stickK Stick: The Business of Behavioral Economics 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 Sales & Marketing field
– Behavioral Economics 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 Behavioral Economics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Behavioral Economics is one of the most innovative firm in sector. Manager in Making stickK Stick: The Business of Behavioral Economics Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Behavioral Economics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Making stickK Stick: The Business of Behavioral Economics HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Behavioral Economics is one of the leading recruiters in the industry. Managers in the Making stickK Stick: The Business of Behavioral Economics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Behavioral Economics in the sector have low bargaining power. Making stickK Stick: The Business of Behavioral Economics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Behavioral Economics to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Behavioral Economics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Making stickK Stick: The Business of Behavioral Economics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Making stickK Stick: The Business of Behavioral Economics are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Making stickK Stick: The Business of Behavioral Economics, is just above the industry average. Behavioral Economics 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 operating costs
– Compare to the competitors, firm in the HBR case study Making stickK Stick: The Business of Behavioral Economics 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 Behavioral Economics 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Making stickK Stick: The Business of Behavioral Economics, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Behavioral Economics, firm in the HBR case study Making stickK Stick: The Business of Behavioral Economics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Making stickK Stick: The Business of Behavioral Economics, it seems that the employees of Behavioral Economics don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Behavioral Economics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Making stickK Stick: The Business of Behavioral Economics can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Behavioral Economics products
– To increase the profitability and margins on the products, Behavioral Economics needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Behavioral Economics 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.
Need for greater diversity
– Behavioral Economics 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Making stickK Stick: The Business of Behavioral Economics HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Behavioral Economics has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Behavioral Economics is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Behavioral Economics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Behavioral Economics to focus more on services rather than just following the product oriented approach.
Opportunities Making stickK Stick: The Business of Behavioral Economics | 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 Making stickK Stick: The Business of Behavioral Economics are -
Using analytics as competitive advantage
– Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Behavioral Economics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Behavioral Economics 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. Behavioral Economics 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.
Developing new processes and practices
– Behavioral Economics can develop new processes and procedures in Sales & Marketing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Behavioral Economics 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, as suggested in case study, Making stickK Stick: The Business of Behavioral Economics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Behavioral Economics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Behavioral Economics 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 Behavioral Economics to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Behavioral Economics to increase its market reach. Behavioral Economics will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Behavioral Economics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Manufacturing automation
– Behavioral Economics can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. 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.
Learning at scale
– Online learning technologies has now opened space for Behavioral Economics 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
– Behavioral Economics 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.
Building a culture of innovation
– managers at Behavioral Economics 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 Sales & Marketing segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Behavioral Economics 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.
Threats Making stickK Stick: The Business of Behavioral Economics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Making stickK Stick: The Business of Behavioral Economics are -
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.
Regulatory challenges
– Behavioral Economics 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 Sales & Marketing industry regulations.
Technology acceleration in Forth Industrial Revolution
– Behavioral Economics has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Behavioral Economics needs to keep up with the evolution of technology in the Sales & Marketing 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Behavioral Economics in the Sales & Marketing industry. The Sales & Marketing 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.
Stagnating economy with rate increase
– Behavioral Economics 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 field.
Environmental challenges
– Behavioral Economics 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. Behavioral Economics can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Making stickK Stick: The Business of Behavioral Economics, Behavioral Economics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Behavioral Economics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Behavioral Economics 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics .
High dependence on third party suppliers
– Behavioral Economics 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.
Shortening product life cycle
– it is one of the major threat that Behavioral Economics is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Making stickK Stick: The Business of Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics 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 Making stickK Stick: The Business of Behavioral Economics 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 Behavioral Economics needs to make to build a sustainable competitive advantage.
