Case Study Description of Purchase Precedes Trust in Retailer
Restoring consumer trust remains an uphill battle for retailers, as for many others. The rise of private label (PL) products can, in fact, create a new reputation and identity for the retailer. Before, it was believed that consumers purchased these cheap knockoffs because they trusted in the store. But, as PL products have grown in quality to rival that of leading brands, a surprising about-face has emerged: customer satisfaction with PL products is by far the most important driver of trust in the retailer. The author suggests some strategies that retail managers should keep in mind to develop trust and long-term loyalty using private labels. At the same time, large retailers can boost trust levels among consumer groups by tapping opportunities with local store brands - as higher consumption is often associated with wide-ranging PL brands that are values based and community linked.
Swot Analysis of "Purchase Precedes Trust in Retailer" written by Sandro Castaldo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pl Trust facing as an external strategic factors. Some of the topics covered in Purchase Precedes Trust in Retailer case study are - Strategic Management Strategies, Leadership, Organizational culture, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Purchase Precedes Trust in Retailer casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing commodity prices, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Purchase Precedes Trust in Retailer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Purchase Precedes Trust in Retailer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pl Trust, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pl Trust 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 Purchase Precedes Trust in Retailer can be done for the following purposes –
1. Strategic planning using facts provided in Purchase Precedes Trust in Retailer case study
2. Improving business portfolio management of Pl Trust
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 Pl Trust
Strengths Purchase Precedes Trust in Retailer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pl Trust in Purchase Precedes Trust in Retailer Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Pl Trust 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.
Learning organization
- Pl Trust 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 Pl Trust is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Purchase Precedes Trust in Retailer Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Pl Trust in the sector have low bargaining power. Purchase Precedes Trust in Retailer has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pl Trust 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 Pl Trust digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pl Trust 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
– Pl Trust has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pl Trust to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Pl Trust 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 Sandro Castaldo 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.
Superior customer experience
– The customer experience strategy of Pl Trust in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Pl Trust 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 Purchase Precedes Trust in Retailer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Pl Trust has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pl Trust 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.
Operational resilience
– The operational resilience strategy in the Purchase Precedes Trust in Retailer 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.
High switching costs
– The high switching costs that Pl Trust 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.
Ability to lead change in Sales & Marketing field
– Pl Trust 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 Pl Trust in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Purchase Precedes Trust in Retailer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Purchase Precedes Trust in Retailer are -
High cash cycle compare to competitors
Pl Trust 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.
Products dominated business model
– Even though Pl Trust 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 - Purchase Precedes Trust in Retailer should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Purchase Precedes Trust in Retailer, it seems that the employees of Pl Trust don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pl Trust is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Purchase Precedes Trust in Retailer can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Pl Trust products
– To increase the profitability and margins on the products, Pl Trust needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Pl Trust 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Purchase Precedes Trust in Retailer, is just above the industry average. Pl Trust 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Purchase Precedes Trust in Retailer 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 Pl Trust has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Pl Trust, firm in the HBR case study Purchase Precedes Trust in Retailer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Pl Trust supply chain. Even after few cautionary changes mentioned in the HBR case study - Purchase Precedes Trust in Retailer, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pl Trust vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Sandro Castaldo suggests that, Pl Trust 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.
Opportunities Purchase Precedes Trust in Retailer | 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 Purchase Precedes Trust in Retailer are -
Learning at scale
– Online learning technologies has now opened space for Pl Trust 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pl Trust can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Pl Trust 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pl Trust can use these opportunities to build new business models that can help the communities that Pl Trust operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pl Trust 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, Purchase Precedes Trust in Retailer, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Pl Trust can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Pl Trust has opened avenues for new revenue streams for the organization in the industry. This can help Pl Trust to build a more holistic ecosystem as suggested in the Purchase Precedes Trust in Retailer case study. Pl Trust 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 Pl Trust 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.
Loyalty marketing
– Pl Trust 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.
Better consumer reach
– The expansion of the 5G network will help Pl Trust to increase its market reach. Pl Trust 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pl Trust 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pl Trust 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 Pl Trust to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Pl Trust can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Purchase Precedes Trust in Retailer 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.
Threats Purchase Precedes Trust in Retailer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Purchase Precedes Trust in Retailer are -
High dependence on third party suppliers
– Pl Trust 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. Pl Trust needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Purchase Precedes Trust in Retailer, Pl Trust 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pl Trust 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 Purchase Precedes Trust in Retailer .
Increasing wage structure of Pl Trust
– 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 Pl Trust.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pl Trust with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Pl Trust 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.
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 Pl Trust business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Pl Trust 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.
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.
Shortening product life cycle
– it is one of the major threat that Pl Trust is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pl Trust 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.
Weighted SWOT Analysis of Purchase Precedes Trust in Retailer 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 Purchase Precedes Trust in Retailer 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 Purchase Precedes Trust in Retailer 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 Purchase Precedes Trust in Retailer 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 Purchase Precedes Trust in Retailer 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 Pl Trust needs to make to build a sustainable competitive advantage.
