Clust.com: Dream More and Pay Less SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Clust.com: Dream More and Pay Less
Clust is a French group-buying Web site. Instead of marketing products to consumers, Clust is marketing aggregated consumer demands to manufacturers. Consequently, beyond the usual act of choosing among predefined alternatives, consumers are expected to bring up their demands and create new product ideas, to discuss and support the ideas of others, to call on their friends to join the Clust community, and to monitor the efforts of the Clust purchasing team. In fact, Clust holds no inventory beyond a warehouse to organize deliveries. No product is put on sale before enough supporters endorse it and 5%-40% discount on retail price can be secured. After a very interesting launch strategy, the Web site comes short of breath. Two pathways are outlined (focus on group-buying and good deals vs. focus on consumer creation and exclusives) with enough details to support decision making and evaluate both profitability and concept consistency.
Swot Analysis of "Clust.com: Dream More and Pay Less" written by Luc Wathieu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Clust Clust.com facing as an external strategic factors. Some of the topics covered in Clust.com: Dream More and Pay Less case study are - Strategic Management Strategies, Customers, Internet and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Clust.com: Dream More and Pay Less casestudy better are - – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, there is backlash against globalization, increasing transportation and logistics costs, increasing energy prices,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of Clust.com: Dream More and Pay Less
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Clust.com: Dream More and Pay Less case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clust Clust.com, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clust Clust.com 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 Clust.com: Dream More and Pay Less can be done for the following purposes –
1. Strategic planning using facts provided in Clust.com: Dream More and Pay Less case study
2. Improving business portfolio management of Clust Clust.com
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 Clust Clust.com
Strengths Clust.com: Dream More and Pay Less | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clust Clust.com in Clust.com: Dream More and Pay Less Harvard Business Review case study are -
Diverse revenue streams
– Clust Clust.com is present in almost all the verticals within the industry. This has provided firm in Clust.com: Dream More and Pay Less 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.
High switching costs
– The high switching costs that Clust Clust.com 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.
Innovation driven organization
– Clust Clust.com is one of the most innovative firm in sector. Manager in Clust.com: Dream More and Pay Less Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Clust Clust.com 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 Clust.com: Dream More and Pay Less HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Clust Clust.com is one of the leading recruiters in the industry. Managers in the Clust.com: Dream More and Pay Less are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Clust Clust.com 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 Clust.com: Dream More and Pay Less - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Clust.com: Dream More and Pay Less firm has clearly differentiated products in the market place. This has enabled Clust Clust.com to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Clust Clust.com to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Clust.com: Dream More and Pay Less 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.
Cross disciplinary teams
– Horizontal connected teams at the Clust Clust.com 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.
Low bargaining power of suppliers
– Suppliers of Clust Clust.com in the sector have low bargaining power. Clust.com: Dream More and Pay Less has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Clust Clust.com 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 Clust Clust.com digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Clust Clust.com 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.
Ability to lead change in Sales & Marketing field
– Clust Clust.com 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 Clust Clust.com in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Clust.com: Dream More and Pay Less | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Clust.com: Dream More and Pay Less are -
Low market penetration in new markets
– Outside its home market of Clust Clust.com, firm in the HBR case study Clust.com: Dream More and Pay Less needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Clust Clust.com 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.
Aligning sales with marketing
– It come across in the case study Clust.com: Dream More and Pay Less 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 Clust.com: Dream More and Pay Less can leverage the sales team experience to cultivate customer relationships as Clust Clust.com is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Clust.com: Dream More and Pay Less HBR case study mentions - Clust Clust.com 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Clust.com: Dream More and Pay Less 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 Clust Clust.com 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Clust Clust.com has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Clust Clust.com even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Clust.com: Dream More and Pay Less, is just above the industry average. Clust Clust.com 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 cash cycle compare to competitors
Clust Clust.com has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Clust.com: Dream More and Pay Less 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 Clust Clust.com 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 Clust Clust.com supply chain. Even after few cautionary changes mentioned in the HBR case study - Clust.com: Dream More and Pay Less, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Clust Clust.com vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Clust Clust.com 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 Clust.com: Dream More and Pay Less | 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 Clust.com: Dream More and Pay Less are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Clust Clust.com 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 Clust Clust.com has opened avenues for new revenue streams for the organization in the industry. This can help Clust Clust.com to build a more holistic ecosystem as suggested in the Clust.com: Dream More and Pay Less case study. Clust Clust.com 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. Clust Clust.com 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. Clust Clust.com 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Clust Clust.com can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Clust Clust.com 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Clust Clust.com 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, Clust.com: Dream More and Pay Less, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Clust Clust.com 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.
Using analytics as competitive advantage
– Clust Clust.com 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 Clust.com: Dream More and Pay Less - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Clust Clust.com to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Clust Clust.com 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
– Clust Clust.com has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Clust Clust.com 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.
Building a culture of innovation
– managers at Clust Clust.com 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.
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. Clust Clust.com can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Clust.com: Dream More and Pay Less External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Clust.com: Dream More and Pay Less are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Clust.com: Dream More and Pay Less, Clust Clust.com 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clust Clust.com 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.
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 Clust Clust.com in the Sales & Marketing sector and impact the bottomline of the organization.
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 Clust Clust.com business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Clust Clust.com with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Clust Clust.com can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Clust Clust.com has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Clust Clust.com 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.
Regulatory challenges
– Clust Clust.com 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.
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 Clust Clust.com.
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. Clust Clust.com 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.
Stagnating economy with rate increase
– Clust Clust.com 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.
Increasing wage structure of Clust Clust.com
– 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 Clust Clust.com.
Environmental challenges
– Clust Clust.com 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. Clust Clust.com can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Clust.com: Dream More and Pay Less 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 Clust.com: Dream More and Pay Less 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 Clust.com: Dream More and Pay Less 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 Clust.com: Dream More and Pay Less 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 Clust.com: Dream More and Pay Less 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 Clust Clust.com needs to make to build a sustainable competitive advantage.
