Case Study Description of Angie's List: Ratings Pioneer Turns 20
In 1995, before people "googled" or "yelped," Angela Hicks (HBS, 2000) was establishing her Angie's List as a pioneer in the accumulation and dissemination of consumer rating information. Hicks focused on the home repair and maintenance market, and, as she put it, "particularly on high cost of failure situations where good information on potential service providers is correspondingly of high value." Angie's List had a paid subscription model as it charged "members" for access to the information they collectively provided on service providers. More recently, companies such as Yelp, TripAdvisor, and Google have started offering free access to their reviews while relying totally on site advertising and service provider fees for their revenues. In 2015, Angie's List collected close to $68 million in membership fees. In January 2016, with recent declines in the growth rate of member numbers, Angie's List has to decide if it was time to drop the "paid subscription for all" model and introduce a free version of its service to its product line.
Swot Analysis of "Angie's List: Ratings Pioneer Turns 20" written by Robert J. Dolan, Ayelet Israeli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Angie's List facing as an external strategic factors. Some of the topics covered in Angie's List: Ratings Pioneer Turns 20 case study are - Strategic Management Strategies, Growth strategy, Internet, Market research, Pricing, Product development, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Angie's List: Ratings Pioneer Turns 20 casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of Angie's List: Ratings Pioneer Turns 20
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Angie's List: Ratings Pioneer Turns 20 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Angie's List, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Angie's List 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 Angie's List: Ratings Pioneer Turns 20 can be done for the following purposes –
1. Strategic planning using facts provided in Angie's List: Ratings Pioneer Turns 20 case study
2. Improving business portfolio management of Angie's List
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 Angie's List
Strengths Angie's List: Ratings Pioneer Turns 20 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Angie's List in Angie's List: Ratings Pioneer Turns 20 Harvard Business Review case study are -
Innovation driven organization
– Angie's List is one of the most innovative firm in sector. Manager in Angie's List: Ratings Pioneer Turns 20 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Angie's List has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Angie's List 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.
Ability to lead change in Sales & Marketing field
– Angie's List 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 Angie's List in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Angie's List
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Angie's List does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Angie's List: Ratings Pioneer Turns 20 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Angie's List: Ratings Pioneer Turns 20 firm has clearly differentiated products in the market place. This has enabled Angie's List to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Angie's List to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Angie's List 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 Angie's List: Ratings Pioneer Turns 20 - 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 Angie's List digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Angie's List 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 switching costs
– The high switching costs that Angie's List 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.
Low bargaining power of suppliers
– Suppliers of Angie's List in the sector have low bargaining power. Angie's List: Ratings Pioneer Turns 20 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Angie's List to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Angie's List 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.
Superior customer experience
– The customer experience strategy of Angie's List in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Angie's List: Ratings Pioneer Turns 20 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Angie's List: Ratings Pioneer Turns 20 are -
Need for greater diversity
– Angie's List 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.
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 Angie's List supply chain. Even after few cautionary changes mentioned in the HBR case study - Angie's List: Ratings Pioneer Turns 20, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Angie's List vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Angie's List is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Angie's List needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Angie's List to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Angie's List: Ratings Pioneer Turns 20 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 Angie's List: Ratings Pioneer Turns 20 can leverage the sales team experience to cultivate customer relationships as Angie's List is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Angie's List: Ratings Pioneer Turns 20 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 Angie's List 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Angie's List: Ratings Pioneer Turns 20 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 Angie's List has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Angie's List, firm in the HBR case study Angie's List: Ratings Pioneer Turns 20 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Angie's List: Ratings Pioneer Turns 20, is just above the industry average. Angie's List 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 Angie's List 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.
Products dominated business model
– Even though Angie's List 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 - Angie's List: Ratings Pioneer Turns 20 should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Angie's List 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.
Opportunities Angie's List: Ratings Pioneer Turns 20 | 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 Angie's List: Ratings Pioneer Turns 20 are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Angie's List can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Angie's List 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.
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. Angie's List 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. Angie's List 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.
Buying journey improvements
– Angie's List can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Angie's List: Ratings Pioneer Turns 20 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, Angie's List 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, Angie's List: Ratings Pioneer Turns 20, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Angie's List 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.
Creating value in data economy
– The success of analytics program of Angie's List has opened avenues for new revenue streams for the organization in the industry. This can help Angie's List to build a more holistic ecosystem as suggested in the Angie's List: Ratings Pioneer Turns 20 case study. Angie's List can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Angie's List in the consumer business. Now Angie's List can target international markets with far fewer capital restrictions requirements than the existing system.
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 Angie's List 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.
Learning at scale
– Online learning technologies has now opened space for Angie's List 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, Angie's List 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Angie's List is facing challenges because of the dominance of functional experts in the organization. Angie's List: Ratings Pioneer Turns 20 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Angie's List 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.
Threats Angie's List: Ratings Pioneer Turns 20 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Angie's List: Ratings Pioneer Turns 20 are -
Increasing wage structure of Angie's List
– 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 Angie's List.
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 Angie's List in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Angie's List 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.
Environmental challenges
– Angie's List 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. Angie's List can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
Stagnating economy with rate increase
– Angie's List 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.
High dependence on third party suppliers
– Angie's List 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 Angie's List.
Technology acceleration in Forth Industrial Revolution
– Angie's List has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Angie's List 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.
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. Angie's List 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Angie's List with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Angie's List: Ratings Pioneer Turns 20, Angie's List 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 Angie's List 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 Angie's List: Ratings Pioneer Turns 20 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 Angie's List: Ratings Pioneer Turns 20 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 Angie's List: Ratings Pioneer Turns 20 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 Angie's List: Ratings Pioneer Turns 20 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 Angie's List: Ratings Pioneer Turns 20 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 Angie's List needs to make to build a sustainable competitive advantage.
