Case Study Description of Filene's Basement: Inside a Fired Customer's Relationship
How, in a business climate in which building relationships with customers has dominated both managerial thought and marketing budgets, could Filene's Basement have fired a loyal customer, one who was formally and informally recognized as a best customer? This case allows students to reverse-engineer a fired customer's relationship with discount retailer Filene's Basement, from her perspective, to uncover the critical incidents and behaviors of each party that shaped their relationship trajectory. The company's customer relationship management (CRM) programs are analyzed to show how they influenced and encouraged unprofitable customer behavior.
Swot Analysis of "Filene's Basement: Inside a Fired Customer's Relationship" written by Jill Avery, Susan Fournier includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Basement Filene's facing as an external strategic factors. Some of the topics covered in Filene's Basement: Inside a Fired Customer's Relationship case study are - Strategic Management Strategies, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Filene's Basement: Inside a Fired Customer's Relationship casestudy better are - – technology disruption, increasing transportation and logistics costs, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Filene's Basement: Inside a Fired Customer's Relationship
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Filene's Basement: Inside a Fired Customer's Relationship case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Basement Filene's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Basement Filene's 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 Filene's Basement: Inside a Fired Customer's Relationship can be done for the following purposes –
1. Strategic planning using facts provided in Filene's Basement: Inside a Fired Customer's Relationship case study
2. Improving business portfolio management of Basement Filene's
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 Basement Filene's
Strengths Filene's Basement: Inside a Fired Customer's Relationship | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Basement Filene's in Filene's Basement: Inside a Fired Customer's Relationship Harvard Business Review case study are -
High brand equity
– Basement Filene's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Basement Filene's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Basement Filene's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– Filene's Basement: Inside a Fired Customer's Relationship firm has clearly differentiated products in the market place. This has enabled Basement Filene's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Basement Filene's to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Basement Filene's in the sector have low bargaining power. Filene's Basement: Inside a Fired Customer's Relationship has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Basement Filene's to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Basement Filene's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Filene's Basement: Inside a Fired Customer's Relationship 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.
Highly skilled collaborators
– Basement Filene's 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 Filene's Basement: Inside a Fired Customer's Relationship HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Basement Filene's 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 Jill Avery, Susan Fournier 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
– Basement Filene's is one of the most innovative firm in sector. Manager in Filene's Basement: Inside a Fired Customer's Relationship Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Basement Filene's 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.
Ability to recruit top talent
– Basement Filene's is one of the leading recruiters in the industry. Managers in the Filene's Basement: Inside a Fired Customer's Relationship are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Basement Filene's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Basement Filene's 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.
Diverse revenue streams
– Basement Filene's is present in almost all the verticals within the industry. This has provided firm in Filene's Basement: Inside a Fired Customer's Relationship 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.
Weaknesses Filene's Basement: Inside a Fired Customer's Relationship | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Filene's Basement: Inside a Fired Customer's Relationship are -
No frontier risks strategy
– After analyzing the HBR case study Filene's Basement: Inside a Fired Customer's Relationship, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Filene's Basement: Inside a Fired Customer's Relationship, in the dynamic environment Basement Filene's has struggled to respond to the nimble upstart competition. Basement Filene's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Basement Filene's 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.
Lack of clear differentiation of Basement Filene's products
– To increase the profitability and margins on the products, Basement Filene's 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 Basement Filene's, firm in the HBR case study Filene's Basement: Inside a Fired Customer's Relationship needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Basement Filene's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Basement Filene's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Basement Filene's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Basement Filene's 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.
High cash cycle compare to competitors
Basement Filene's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Basement Filene's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Basement Filene's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Basement Filene's to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Filene's Basement: Inside a Fired Customer's Relationship 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 Basement Filene's 's lucrative customers.
Opportunities Filene's Basement: Inside a Fired Customer's Relationship | 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 Filene's Basement: Inside a Fired Customer's Relationship are -
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 Basement Filene's in the consumer business. Now Basement Filene's can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Basement Filene's 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.
Using analytics as competitive advantage
– Basement Filene's 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 Filene's Basement: Inside a Fired Customer's Relationship - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Basement Filene's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Basement Filene's 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.
Developing new processes and practices
– Basement Filene's 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.
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. Basement Filene's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Basement Filene's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Filene's Basement: Inside a Fired Customer's Relationship 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Basement Filene's is facing challenges because of the dominance of functional experts in the organization. Filene's Basement: Inside a Fired Customer's Relationship case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Basement Filene's 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.
Creating value in data economy
– The success of analytics program of Basement Filene's has opened avenues for new revenue streams for the organization in the industry. This can help Basement Filene's to build a more holistic ecosystem as suggested in the Filene's Basement: Inside a Fired Customer's Relationship case study. Basement Filene's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Basement Filene's 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.
Learning at scale
– Online learning technologies has now opened space for Basement Filene's 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.
Better consumer reach
– The expansion of the 5G network will help Basement Filene's to increase its market reach. Basement Filene's 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.
Threats Filene's Basement: Inside a Fired Customer's Relationship External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Filene's Basement: Inside a Fired Customer's Relationship are -
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. Basement Filene's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Basement Filene's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Basement Filene's 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.
High dependence on third party suppliers
– Basement Filene's 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.
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. Basement Filene's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Basement Filene's 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 Filene's Basement: Inside a Fired Customer's Relationship .
Stagnating economy with rate increase
– Basement Filene's 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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Basement Filene's in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Basement Filene's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Basement Filene's 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.
Consumer confidence and its impact on Basement Filene's 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.
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.
Shortening product life cycle
– it is one of the major threat that Basement Filene's is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Basement Filene's 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. Basement Filene's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Filene's Basement: Inside a Fired Customer's Relationship 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 Filene's Basement: Inside a Fired Customer's Relationship 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 Filene's Basement: Inside a Fired Customer's Relationship 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 Filene's Basement: Inside a Fired Customer's Relationship 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 Filene's Basement: Inside a Fired Customer's Relationship 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 Basement Filene's needs to make to build a sustainable competitive advantage.
