CDK Digital Marketing: Addressing Channel Conflict with Data Analytics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CDK Digital Marketing: Addressing Channel Conflict with Data Analytics
Four years into a five-year contract with General Motors to be the exclusive website vendor to its U.S. network of more than 4,000 dealers, CDK Digital faced a crucial contract renewal at the end of 2012. The case follows Melissa McCann, director of strategic marketing, and Chris Reed, CMO, as they prepared for a critical meeting in July 2011: a presentation to the customer relationship management (CRM) subcommittee of the Chevrolet dealer council. Although GM dealers, like all auto dealers in the United States, were independent franchisees, GM saw the renewal of CDK Digital's exclusive contract as a collaborative decision between dealers and GM. According to Ed Vogt, GM's executive in charge of the renewal, if the dealer councils said no, the contract would not be renewed. This case challenges students to use CDK's big data and analytics capabilities to address the inherent conflict between dealers and manufacturers: when marketing to potential customers, manufacturers wanted consistency across dealer websites to maximize sales of their targeted brands, while dealers wanted flexibility to sell what they had in inventory.
Swot Analysis of "CDK Digital Marketing: Addressing Channel Conflict with Data Analytics" written by Florian Zettelmeyer, Greg Merkley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dealers Cdk facing as an external strategic factors. Some of the topics covered in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics case study are - Strategic Management Strategies, Data, IT, Market research, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the CDK Digital Marketing: Addressing Channel Conflict with Data Analytics casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing energy prices, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing transportation and logistics costs,
wage bills are increasing, technology disruption, etc
Introduction to SWOT Analysis of CDK Digital Marketing: Addressing Channel Conflict with Data Analytics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dealers Cdk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dealers Cdk 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics can be done for the following purposes –
1. Strategic planning using facts provided in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics case study
2. Improving business portfolio management of Dealers Cdk
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 Dealers Cdk
Strengths CDK Digital Marketing: Addressing Channel Conflict with Data Analytics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dealers Cdk in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics Harvard Business Review case study are -
Diverse revenue streams
– Dealers Cdk is present in almost all the verticals within the industry. This has provided firm in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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.
Ability to lead change in Sales & Marketing field
– Dealers Cdk is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Dealers Cdk in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Dealers Cdk in the sector have low bargaining power. CDK Digital Marketing: Addressing Channel Conflict with Data Analytics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dealers Cdk to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Dealers Cdk 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 Dealers Cdk is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Dealers Cdk has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Dealers Cdk is one of the leading recruiters in the industry. Managers in the CDK Digital Marketing: Addressing Channel Conflict with Data Analytics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– CDK Digital Marketing: Addressing Channel Conflict with Data Analytics firm has clearly differentiated products in the market place. This has enabled Dealers Cdk to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Dealers Cdk to invest into research and development (R&D) and innovation.
Innovation driven organization
– Dealers Cdk is one of the most innovative firm in sector. Manager in CDK Digital Marketing: Addressing Channel Conflict with Data Analytics Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Dealers Cdk
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dealers Cdk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Dealers Cdk 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Dealers Cdk digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dealers Cdk 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.
High brand equity
– Dealers Cdk has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dealers Cdk to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses CDK Digital Marketing: Addressing Channel Conflict with Data Analytics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CDK Digital Marketing: Addressing Channel Conflict with Data Analytics are -
High bargaining power of channel partners
– Because of the regulatory requirements, Florian Zettelmeyer, Greg Merkley suggests that, Dealers Cdk 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics HBR case study mentions - Dealers Cdk 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.
Low market penetration in new markets
– Outside its home market of Dealers Cdk, firm in the HBR case study CDK Digital Marketing: Addressing Channel Conflict with Data Analytics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Dealers Cdk 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study CDK Digital Marketing: Addressing Channel Conflict with Data Analytics, in the dynamic environment Dealers Cdk has struggled to respond to the nimble upstart competition. Dealers Cdk has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Dealers Cdk products
– To increase the profitability and margins on the products, Dealers Cdk needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CDK Digital Marketing: Addressing Channel Conflict with Data Analytics, is just above the industry average. Dealers Cdk 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.
Skills based hiring
– The stress on hiring functional specialists at Dealers Cdk 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.
High operating costs
– Compare to the competitors, firm in the HBR case study CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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 Dealers Cdk 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Dealers Cdk 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.
Interest costs
– Compare to the competition, Dealers Cdk 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.
Opportunities CDK Digital Marketing: Addressing Channel Conflict with Data Analytics | 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dealers Cdk 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 Dealers Cdk to hire the very best people irrespective of their geographical location.
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. Dealers Cdk can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Dealers Cdk 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. Dealers Cdk 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.
Learning at scale
– Online learning technologies has now opened space for Dealers Cdk 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dealers Cdk 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.
Building a culture of innovation
– managers at Dealers Cdk 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.
Buying journey improvements
– Dealers Cdk can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dealers Cdk 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, CDK Digital Marketing: Addressing Channel Conflict with Data Analytics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dealers Cdk 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.
Developing new processes and practices
– Dealers Cdk 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.
Loyalty marketing
– Dealers Cdk 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.
Manufacturing automation
– Dealers Cdk 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.
Better consumer reach
– The expansion of the 5G network will help Dealers Cdk to increase its market reach. Dealers Cdk 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CDK Digital Marketing: Addressing Channel Conflict with Data Analytics are -
High dependence on third party suppliers
– Dealers Cdk 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dealers Cdk 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.
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 Dealers Cdk is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Dealers Cdk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Dealers Cdk will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Dealers Cdk.
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 Dealers Cdk 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics, Dealers Cdk 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.
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 Dealers Cdk in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dealers Cdk 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics .
Environmental challenges
– Dealers Cdk 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. Dealers Cdk can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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 CDK Digital Marketing: Addressing Channel Conflict with Data Analytics 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 Dealers Cdk needs to make to build a sustainable competitive advantage.