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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, geopolitical disruptions, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
High switching costs
– The high switching costs that Olympic Competitor's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
Diverse revenue streams
– Olympic Competitor's is present in almost all the verticals within the industry. This has provided firm in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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.
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.
Innovation driven organization
– Olympic Competitor's is one of the most innovative firm in sector. Manager in Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Olympic Competitor's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Olympic Competitor's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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 -
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Olympic Competitor'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.
Need for greater diversity
– Olympic Competitor's 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Olympic Competitor's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version, is just above the industry average. Olympic Competitor's 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version, in the dynamic environment Olympic Competitor's has struggled to respond to the nimble upstart competition. Olympic Competitor's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version 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 Olympic Competitor's has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Olympic Competitor's supply chain. Even after few cautionary changes mentioned in the HBR case study - Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Olympic Competitor's vulnerable to further global disruptions in South East Asia.
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 -
Learning at scale
– Online learning technologies has now opened space for Olympic Competitor'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.
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. Olympic Competitor's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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 Olympic Competitor'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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Olympic Competitor'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.
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. Olympic Competitor's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 -
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 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.
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. Olympic Competitor's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
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 .
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.
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.
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.
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. Olympic Competitor's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Olympic Competitor's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Olympic Competitor'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 Olympic Rent-A-Car U.S.: Customer Loyalty Battles, Spanish Version .
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.
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.
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.