Case Study Description of Cabo San Viejo: Rewarding Loyalty
In 2005, Cabo San Viejo, a premier health and fitness spa resort located in Palm Springs, California, is debating whether to introduce a Customer Rewards Program. Describes the customer management challenges the firm is facing and outlines the various ways in which a rewards program might be structured to help address those challenges.
Swot Analysis of "Cabo San Viejo: Rewarding Loyalty" written by Youngme Moon, Seth Schulman, Gail McGovern includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Viejo Cabo facing as an external strategic factors. Some of the topics covered in Cabo San Viejo: Rewarding Loyalty case study are - Strategic Management Strategies, Risk management and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cabo San Viejo: Rewarding Loyalty casestudy better are - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, geopolitical disruptions, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, technology disruption, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Cabo San Viejo: Rewarding Loyalty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cabo San Viejo: Rewarding Loyalty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Viejo Cabo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Viejo Cabo 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 Cabo San Viejo: Rewarding Loyalty can be done for the following purposes –
1. Strategic planning using facts provided in Cabo San Viejo: Rewarding Loyalty case study
2. Improving business portfolio management of Viejo Cabo
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 Viejo Cabo
Strengths Cabo San Viejo: Rewarding Loyalty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Viejo Cabo in Cabo San Viejo: Rewarding Loyalty Harvard Business Review case study are -
Highly skilled collaborators
– Viejo Cabo 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 Cabo San Viejo: Rewarding Loyalty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Viejo Cabo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Viejo Cabo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Viejo Cabo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cabo San Viejo: Rewarding Loyalty 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.
Operational resilience
– The operational resilience strategy in the Cabo San Viejo: Rewarding Loyalty 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.
Strong track record of project management
– Viejo Cabo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Viejo Cabo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Viejo Cabo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Viejo Cabo in the sector have low bargaining power. Cabo San Viejo: Rewarding Loyalty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Viejo Cabo to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Viejo Cabo 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 Youngme Moon, Seth Schulman, Gail McGovern 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.
Effective Research and Development (R&D)
– Viejo Cabo 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 Cabo San Viejo: Rewarding Loyalty - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Viejo Cabo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Viejo Cabo has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Viejo Cabo is present in almost all the verticals within the industry. This has provided firm in Cabo San Viejo: Rewarding Loyalty 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 recruit top talent
– Viejo Cabo is one of the leading recruiters in the industry. Managers in the Cabo San Viejo: Rewarding Loyalty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Cabo San Viejo: Rewarding Loyalty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cabo San Viejo: Rewarding Loyalty are -
High cash cycle compare to competitors
Viejo Cabo 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.
Slow to strategic competitive environment developments
– As Cabo San Viejo: Rewarding Loyalty HBR case study mentions - Viejo Cabo 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cabo San Viejo: Rewarding Loyalty, it seems that the employees of Viejo Cabo 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Cabo San Viejo: Rewarding Loyalty 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 Viejo Cabo 's lucrative customers.
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 Viejo Cabo supply chain. Even after few cautionary changes mentioned in the HBR case study - Cabo San Viejo: Rewarding Loyalty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Viejo Cabo vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Viejo Cabo 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, Viejo Cabo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cabo San Viejo: Rewarding Loyalty can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Cabo San Viejo: Rewarding Loyalty that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cabo San Viejo: Rewarding Loyalty can leverage the sales team experience to cultivate customer relationships as Viejo Cabo is planning to shift buying processes online.
Need for greater diversity
– Viejo Cabo 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.
Increasing silos among functional specialists
– The organizational structure of Viejo Cabo is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Viejo Cabo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Viejo Cabo to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cabo San Viejo: Rewarding Loyalty 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 Viejo Cabo has relatively successful track record of launching new products.
Opportunities Cabo San Viejo: Rewarding Loyalty | 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 Cabo San Viejo: Rewarding Loyalty are -
Leveraging digital technologies
– Viejo Cabo 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.
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. Viejo Cabo 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. Viejo Cabo 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.
Developing new processes and practices
– Viejo Cabo 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Viejo Cabo 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. Viejo Cabo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Viejo Cabo 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 Viejo Cabo to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Viejo Cabo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Viejo Cabo to increase its market reach. Viejo Cabo 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 Viejo Cabo 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.
Manufacturing automation
– Viejo Cabo 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.
Building a culture of innovation
– managers at Viejo Cabo 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.
Creating value in data economy
– The success of analytics program of Viejo Cabo has opened avenues for new revenue streams for the organization in the industry. This can help Viejo Cabo to build a more holistic ecosystem as suggested in the Cabo San Viejo: Rewarding Loyalty case study. Viejo Cabo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Viejo Cabo 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 Cabo San Viejo: Rewarding Loyalty - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Viejo Cabo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Cabo San Viejo: Rewarding Loyalty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cabo San Viejo: Rewarding Loyalty are -
Increasing wage structure of Viejo Cabo
– 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 Viejo Cabo.
Regulatory challenges
– Viejo Cabo 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 Cabo San Viejo: Rewarding Loyalty, Viejo Cabo 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 .
High dependence on third party suppliers
– Viejo Cabo 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.
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 Viejo Cabo.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Viejo Cabo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Viejo Cabo business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Viejo Cabo 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Viejo Cabo 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 Cabo San Viejo: Rewarding Loyalty .
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.
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. Viejo Cabo needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Viejo Cabo has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Viejo Cabo needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Cabo San Viejo: Rewarding Loyalty 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 Cabo San Viejo: Rewarding Loyalty 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 Cabo San Viejo: Rewarding Loyalty 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 Cabo San Viejo: Rewarding Loyalty 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 Cabo San Viejo: Rewarding Loyalty 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 Viejo Cabo needs to make to build a sustainable competitive advantage.