StepSmart Fitness, a manufacturer of exercise equipment, is undergoing a sweeping reorganization. The new CEO has terminated the District Sales Director and Regional VP and promoted 30-year-old Benjamin Cooper to manage the underperforming New England district. A first-time manager with no one to train him or explain the causes of the district's underperformance, Cooper has 10 weeks to diagnose the problems and make recommendations that will ensure a turnaround in the territory in less than 16 months. Left to his own devices, Cooper must review the sales data, the incomplete notes left by his predecessor, and his own thoughts after spending a day in the field with each sales person. Then he must make decisions about termination or probation for current employees, the hiring of additional salespeople, ways to increase productivity, and potential new methods of evaluating salesperson performance. He is set to present his conclusions to his also-newly-appointed manager, the Regional VP for the Northeast, in a few days.
Authors :: Robert J. Dolan, Benson P. Shapiro, Alisa Zalosh
Swot Analysis of "StepSmart Fitness" written by Robert J. Dolan, Benson P. Shapiro, Alisa Zalosh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cooper Stepsmart facing as an external strategic factors. Some of the topics covered in StepSmart Fitness case study are - Strategic Management Strategies, Developing employees, Marketing, Reorganization, Sales, Succession planning and Sales & Marketing.
Some of the macro environment factors that can be used to understand the StepSmart Fitness casestudy better are - – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of StepSmart Fitness
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in StepSmart Fitness case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cooper Stepsmart, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cooper Stepsmart 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 StepSmart Fitness can be done for the following purposes –
1. Strategic planning using facts provided in StepSmart Fitness case study
2. Improving business portfolio management of Cooper Stepsmart
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 Cooper Stepsmart
Strengths StepSmart Fitness | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cooper Stepsmart in StepSmart Fitness Harvard Business Review case study are -
Effective Research and Development (R&D)
– Cooper Stepsmart 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 StepSmart Fitness - 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
– Cooper Stepsmart is one of the leading recruiters in the industry. Managers in the StepSmart Fitness are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Cooper Stepsmart in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Cooper Stepsmart is present in almost all the verticals within the industry. This has provided firm in StepSmart Fitness case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Strong track record of project management
– Cooper Stepsmart is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Cooper Stepsmart 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
– Cooper Stepsmart has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cooper Stepsmart to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Cooper Stepsmart has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cooper Stepsmart 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.
Learning organization
- Cooper Stepsmart 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 Cooper Stepsmart is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in StepSmart Fitness Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Cooper Stepsmart
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cooper Stepsmart does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Cooper Stepsmart 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 J. Dolan, Benson P. Shapiro, Alisa Zalosh 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
– Cooper Stepsmart is one of the most innovative firm in sector. Manager in StepSmart Fitness Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses StepSmart Fitness | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of StepSmart Fitness are -
Lack of clear differentiation of Cooper Stepsmart products
– To increase the profitability and margins on the products, Cooper Stepsmart needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the StepSmart Fitness 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 Cooper Stepsmart has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study StepSmart Fitness, it seems that the employees of Cooper Stepsmart 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study StepSmart Fitness, is just above the industry average. Cooper Stepsmart 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.
Slow to strategic competitive environment developments
– As StepSmart Fitness HBR case study mentions - Cooper Stepsmart takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study StepSmart Fitness, in the dynamic environment Cooper Stepsmart has struggled to respond to the nimble upstart competition. Cooper Stepsmart has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Cooper Stepsmart has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study StepSmart Fitness 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 Cooper Stepsmart 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Cooper Stepsmart is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cooper Stepsmart needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cooper Stepsmart to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cooper Stepsmart is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study StepSmart Fitness can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Cooper Stepsmart has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities StepSmart Fitness | 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 StepSmart Fitness are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cooper Stepsmart 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, StepSmart Fitness, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Cooper Stepsmart 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. Cooper Stepsmart 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.
Building a culture of innovation
– managers at Cooper Stepsmart 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.
Learning at scale
– Online learning technologies has now opened space for Cooper Stepsmart 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.
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 Cooper Stepsmart in the consumer business. Now Cooper Stepsmart can target international markets with far fewer capital restrictions requirements than the existing system.
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 Cooper Stepsmart 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.
Using analytics as competitive advantage
– Cooper Stepsmart 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 StepSmart Fitness - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cooper Stepsmart to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cooper Stepsmart 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.
Better consumer reach
– The expansion of the 5G network will help Cooper Stepsmart to increase its market reach. Cooper Stepsmart 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.
Leveraging digital technologies
– Cooper Stepsmart 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cooper Stepsmart can use these opportunities to build new business models that can help the communities that Cooper Stepsmart operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cooper Stepsmart 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cooper Stepsmart can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats StepSmart Fitness External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study StepSmart Fitness are -
Increasing wage structure of Cooper Stepsmart
– 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 Cooper Stepsmart.
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 Cooper Stepsmart.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cooper Stepsmart with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Cooper Stepsmart 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cooper Stepsmart 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 StepSmart Fitness .
High dependence on third party suppliers
– Cooper Stepsmart 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 Cooper Stepsmart is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Cooper Stepsmart demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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. Cooper Stepsmart needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cooper Stepsmart can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Cooper Stepsmart business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study StepSmart Fitness, Cooper Stepsmart 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 .
Stagnating economy with rate increase
– Cooper Stepsmart 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.
Weighted SWOT Analysis of StepSmart Fitness 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 StepSmart Fitness 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 StepSmart Fitness 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 StepSmart Fitness 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 StepSmart Fitness 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 Cooper Stepsmart needs to make to build a sustainable competitive advantage.
