Case Study Description of Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version
The marketing and operations managers for Olympic Rent-A-Car meet to decide how to respond to changes in the loyalty rewards program at the market-leading competitor. The competitor's program gives awards based on dollars spent instead of days rented and eliminates blackout dates. Olympic expects the program to capture more of the valuable business traveler segment, which rents cars more frequently and generally pays higher premiums than the leisure traveler segment. At the meeting, the team reviews the financial performance of the firm and the firm's reward program, called Olympic Medalist. They consider whether they can afford to match the competitor's loyalty program terms as they have done in the past and also consider how the competitor's actions will affect the entire car rental industry. Ultimately, they must respond with a truly distinctive strategy. Students must perform a quantitative analysis of each possible response and consider the value of customers in loyalty programs.
Swot Analysis of "Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version" written by John Deighton, James Kindley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Olympic Competitor's facing as an external strategic factors. Some of the topics covered in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version case study are - Strategic Management Strategies, Competitive strategy, Customers, Operations management and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, wage bills are increasing, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Olympic Competitor's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Olympic Competitor'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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version case study
2. Improving business portfolio management of Olympic Competitor'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 Olympic Competitor's
Strengths Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Olympic Competitor's in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version firm has clearly differentiated products in the market place. This has enabled Olympic Competitor's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Olympic Competitor's to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Olympic Competitor's 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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Olympic Competitor'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 John Deighton, James Kindley 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.
Cross disciplinary teams
– Horizontal connected teams at the Olympic Competitor'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.
Strong track record of project management
– Olympic Competitor'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.
Ability to recruit top talent
– Olympic Competitor's is one of the leading recruiters in the industry. Managers in the Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Olympic Competitor's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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.
Organizational Resilience of Olympic Competitor's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Olympic Competitor's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Olympic Competitor's 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 Olympic Competitor's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Olympic Competitor's in the sector have low bargaining power. Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Olympic Competitor's to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Olympic Competitor'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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version are -
High bargaining power of channel partners
– Because of the regulatory requirements, John Deighton, James Kindley suggests that, Olympic Competitor's 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.
Slow to strategic competitive environment developments
– As Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version HBR case study mentions - Olympic Competitor's 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.
Increasing silos among functional specialists
– The organizational structure of Olympic Competitor's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Olympic Competitor's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Olympic Competitor's to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Olympic Competitor'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.
Capital Spending Reduction
– Even during the low interest decade, Olympic Competitor's 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.
Low market penetration in new markets
– Outside its home market of Olympic Competitor's, firm in the HBR case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Olympic Competitor's 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 - Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Olympic Competitor'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. Olympic Competitor'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.
High cash cycle compare to competitors
Olympic Competitor'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.
High operating costs
– Compare to the competitors, firm in the HBR case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Competitor's 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version, 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.
Opportunities Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version | 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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Competitor's in the consumer business. Now Olympic Competitor's can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Olympic Competitor's 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.
Using analytics as competitive advantage
– Olympic Competitor'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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Olympic Competitor's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Olympic Competitor's 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 Olympic Competitor's to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Olympic Competitor's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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.
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. Olympic Competitor's 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. Olympic Competitor's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Olympic Competitor's is facing challenges because of the dominance of functional experts in the organization. Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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.
Loyalty marketing
– Olympic Competitor'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.
Leveraging digital technologies
– Olympic Competitor'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
– Olympic Competitor'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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Olympic Competitor's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Olympic Competitor's 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.
Creating value in data economy
– The success of analytics program of Olympic Competitor's has opened avenues for new revenue streams for the organization in the industry. This can help Olympic Competitor's to build a more holistic ecosystem as suggested in the Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version case study. Olympic Competitor's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Olympic Competitor'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.
Regulatory challenges
– Olympic Competitor'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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version, Olympic Competitor's 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 .
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 Olympic Competitor's in the Sales & Marketing sector and impact the bottomline of the organization.
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.
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.
Stagnating economy with rate increase
– Olympic Competitor'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.
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 Olympic Competitor's.
High dependence on third party suppliers
– Olympic Competitor'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.
Shortening product life cycle
– it is one of the major threat that Olympic Competitor'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
– Olympic Competitor'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. Olympic Competitor's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Olympic Competitor's
– 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 Olympic Competitor's.
Consumer confidence and its impact on Olympic Competitor'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.
Weighted SWOT Analysis of Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Competitor's needs to make to build a sustainable competitive advantage.